5 Tips For Preparing a Household Budget Before a Layoff

23 Dec

Surviving job loss means more than just surviving financially. But, realistically, if your finances tank, then all the other areas of your life become that much more difficult. Layoffs devastate your finances and lifestyle. Your budget goes nuts. Your family panics and spends all the savings. Your retirement goes. Your house goes. Your life goes.

But what if your company told you that on a specific date, you were going to be laid off? Would not you get your finances in order? That would make the income stopping less hard. It would make the transition from no income to next income a little easier. The reality is: in this economy, the only thing you do not know is the specific date.

Here are 5 things you can do right now with your finances, anticipating job layoffs, to get your finances in order.

1. Streamline your cash outflow. Look at what you spend money on. Look at what you plan to spend money on. Pick the things that can be deferred, or cut out altogether.

2. Know your family debt and how to service it. Far too many families have no idea of ??how much money they owe and how much they spend each month on paying the debt. Even fewer families know how close they are to paying it off.

3. Use your vested savings last. You have put a lot of time and money into long-term investments, like your house and your retirement plan. Tapping into those things for everyday money is way too expensive. Develop a household budget that has not required you to access that money, ever.

4. Eliminate luxuries. Easy to say, hard to do. First thing is get the family together and have your family define what a luxury is. Or, if they want to keep the luxury, what they will cut out to save it.

5. Prioritize your spending. Look at the plan you developed in number 1 above, the budget in number 3, and the definition of luxuries in number 4. Use this to pay the most important things first. Use this to say no to demands on your family's money, even if the demand comes from your family.

This is an unpleaser subject. It is difficult to face the fact that you may get laid off. It is difficult to face the anxiety attack symptoms that hit when you think about it. But it is more difficult to watch your retirement money get spent for today's food, and to see the taxes and penalties you pay on that. It is difficult to see the FORECLOSURE notice on the house that you went to work everyday for.

Having a plan and strategy for dealing with job loss can help you with the stress management attendant to a layoff. It will not make it go away. It will not prevent a layoff, if the company is committed to laying you off. But planning for a layoff – even one you think is unikely – can have positive repercussions through your life.



Source by Rick H. Carter

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