How to Prepare for Unexpected Job Loss

Some employers warn their workers of imminent layoffs. But others issue pink slips with no advance warning, and workers find themselves unexpectedly jobless. Losing a job can wreak havoc on your finances. And while no one wants to be without employment, if you plan ahead, you can soften the blow of an unexpected job loss.

Instructions

1

Eliminate outstanding balances on your credit cards. The fewer debts you have, the easier it is to cope with job loss. Start paying off credit cards and other loans to reduce monthly bills.

2

Stop frivolous spending. After all, your financial situation can change quickly and without warning. Assess your spending habits and make any necessary changes. Give yourself a reasonable budget for shopping and entertainment, and stay within that budget.

3

Pay yourself first, by beefing up your savings account. Begin depositing a percentage of your income into that savings account each pay period. Treat your savings account like any other bill that must be paid, and increase deposits as your disposable income increases.

4

Start a side business. Look for ways to make money outside of your full-time job. Start an office cleaning business, lawn care business or put your handyman skills to good use. A home based business helps increase your emergency fund, and provides income if you're unexpectedly out of work.