Unexpectedly Unemployed: The Importance of Being Prepared
It’d be nice to believe that if you’re a good employee and you do your job well, that you’ll always have a place to earn a living. Unfortunately, millions of Americans have found out the hard way, that job security isn’t what it once used to be. Though businesses have rebounded substantially from the economic crisis of 2008, there are still several reasons that otherwise great employees get fired every day. Though you’d like to hope this never happens to you, failing to prepare for unemployment could leave you in a financial jam – for who knows how long.
Top Reasons to You May Become Unexpectedly Unemployed
Though performance and efficiency play a major role in your ability to retain employment, there are common reasons that businesses let employees go that are, unfortunately, beyond your control. This could include:
· Loss of funding
· Bankruptcy
· Company goes in a different direction
· Downsizing
· Cost-cutting
· Legal troubles
Should the company you’re working for fall into financial or legal trouble of any kind, or decide to take the company in another direction, this can result in the firing of employees – regardless of skill.
Financial Solutions Should You Become Unexpectedly Unemployed
Though we’ll touch on solutions for preparing yourself for potential unemployment a bit later, let’s first discuss what you can do should you find yourself unexpectedly unemployed. You walk into work and your employer fires you. You’ve got a few bucks saved up and one more paycheck coming, but you’re otherwise strapped for cash. Here are some solutions:
· Short-Term Loan – Typically, you can apply for unemployment benefits to tide you over until you find a new job. However, this can take weeks to produce. Therefore, a quick solution for paying your bills would be using online installment loans. Short-term loans such as these are provided to applicants regardless of their credit and can be paid back over time. This gives you the cash you need upfront while you wait for other financial resources to come through.
· Unemployment benefits – As stated above, you may be entitled to unemployment benefits. This would be a predetermined amount provided to you on a weekly basis for six months to a year. You’ll need to check with your state labor department to determine your eligibility.
· Pension – If you have a pension or retirement account through your employer, you may be able to borrow from it. Keep in mind, however, there are several penalties for early withdraw. You’ll need to repay the loan in full to ensure you’re not penalized come tax time.
Should you decide to take out a loan of any kind, remember that although you don’t have a regular income, you will need to repay those funds. Borrowing responsibly will prevent you from falling further into financial debt and can also lead to increased borrowing limits in the future.
Steps You Should Take to Prepare
You can never be too certain these days what could happen with your job, therefore, to minimize the financial emergencies that can arise from having one income, it is ideal to prepare ahead of time. By taking certain financial precautions now, you’ll be better equipped to deal with not having regular income. Here are some effective solutions to consider:
· Build emergency savings – Though there are a lot of debates on how much you should have, you should begin to build an emergency savings account. Start with a goal of $1,000 and then work your way up to three to six months’ worth of income.
· Consider a side hustle – Do you have a passion or knowledge that you can make a living from? If so, a side hustle could be just what you need. Not only will it help you to boost that emergency savings faster, but it will also gives you something to fall back on should you become unexpectedly unemployed.
· Budget – Whether you live in a two-income home or one, you’ll need to learn to live on less income. Start now by living on one income or by living on the income you would have from unemployment. Try to adjust your lifestyle to fit that budget for a while, this way you know you can make it financially should something go wrong.
Even the top performers of the most popular corporations get let go for one reason or another. Although you may not want to think about it, job security isn’t foolproof and should be prepared for. Though financial resources like installment loans or unemployment are great for quick jams, it can take a while to find a new job. Using the above-mentioned tips will help you should you find yourself unexpectedly unemployed.