Having a job is not guaranteed. Even if you work for yourself, clients come and go and there could be times when you struggle to keep consistent cash flow.
- The company could downsize and decide to let you go
- You could get sick and be forced to quit work
- There could be a government shutdown
- They could decide to terminate you for any number of reasons
- Your company could go out of business
The reasons for losing a job could be numerous but the point is, you need to build security for ‘just in case’.
Here are 6 ways to prepare for job loss:
- Save money – Everyone needs some amount of savings (doesn’t have to be in the bank) for everyday emergencies. We’ve had to dip into our savings several times because of unexpected emergencies. Many of us live paycheck-to-paycheck but even saving $5 a week or every other week, is better than nothing. If the company you work for uses direct deposit, setup an instant withdrawal from each paycheck for a certain amount of money ($5, $10, $20). That way, you never even see that money, it goes directly into a savings account. If you have to sacrifice something, like not buying your coffee at Starbucks and instead make it at home, then so be it. Use money that would have gone towards eating out and put that in your savings. Etc. Save wherever you can.
- Prep food and water – Keep at least 14-30 days worth of food in your home. By storing extra food, that’ll be one less thing you’ll need to worry about when you’re out of a job. You’ll be able to eat off your stored food supply and can spend whatever other available funds on other bills (like electricity, rent/mortgage, etc.). And don’t forget to store some extra water, as well. You can even start your own garden.
- Get out of debt – Debt is crippling for many of us. When we don’t have available cash but feel we need something, we use debt. Debt can spiral out of control extremely quickly. Do your best not to get into debt in the first place and if you do, pay it off as quickly as you can. If you’re already in debt, many credit card companies and even student loans, will offer deferments because of job loss. But before getting to that point, do your best to pay off your debt now before job loss. That’ll be one less bill to worry about.
- Store basic supplies – In addition to storing food and water, you should also store some other basic supplies so that you won’t have to worry about that stuff when you’re out of a job. Things like toilet paper, shampoo, soap, razors, etc. General household items that you won’t have to worry about when you have no cash flow.
- Learn to be frugal – Like mentioned in #1 about not buying coffee or not going out to eat, learning to be frugal now (when you have cash flow) will help a lot when you have little to no cash flow. Buy off brand food, use coupons, cook at home, reuse things, etc. It won’t be a big deal for you to not eat out or not go to the movies or out to the bar or whatever when you have no money, if you learn to be frugal now. I’m not saying you should never eat out or never go have fun, but maybe limit it to special occasions.
- Get a side hustle – Don’t just learn to save money, but bring in more money! Start bringing in extra money now through some sort of side hustle. Drive for Uber/Lyft, donate plasma, sell things on Etsy or eBay, sell your skills online, etc. Create a side hustle now, before job loss, so that you can have at least a little something to fall back on when you’re out of work. And who knows, maybe your side hustle could become your main hustle.
Don’t say ‘it’ll never happen to me’.
Nobody ever wants to be without cash flow. But unexpected things happen that are out of our control and we need to be prepared. With a little forethought, planning and action, we can make sure we’re properly planning for ‘what if’.
Get started TODAY and little by little, you’ll notice huge changes. You’ll be glad you don’t have to worry about basic items while also having a bit of money to fall back on if you ever happen to be out of work.
Conquer tomorrow, by preparing today!