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Expert Has Ways To Be Prepared For A Layoff

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Mar 9, 2009 9:34 pm US/Mountain

Expert Has Ways To Be Prepared For A Layoff

Good Question: How can you prepare for a layoff?

Written by Alan Gionet
Reporting
Alan Gionet
DENVER (CBS4) ― Unemployed executive Katy Spritzer loves picking up her son at school. It's not necessarily what she wanted.

"But it's been a welcome change."

Before she was laid off from her job doing commercial real estate investment management, she was thinking ahead.

"So I'd say the biggest thing I did to prepare was just to start meeting with people again and networking with folks and having a lot of coffee meetings."

But she wasn't even sure if she would get promoted or laid off. She got the latter. One thing she didn't do a lot of was financial preparation.

Kim McGrigg of the non-profit Money Management International says the first thing you need to do, is assess the situation.

"How bad is it? You know how long can I expect to be unemployed?"

Then you need to create a financial savings cushion.

"Most experts want it to be three. I prefer that to be six months in an accessible account and I know that sounds daunting. So if that's not realistic, start to save what you can, it will matter if you need it."

You'll want to look at your bills and figure out what you really need.

"In a financial crisis we need to talk a lot about priorities. So we need to really say what is the priority right now? So for a lot of people it's keeping food on the table and keeping your home warm."

Don't forget the health care. While the new economic stimulus plan creates credits for the cost of carrying COBRA coverage after you lose your job, it will still cost you.

"Please don't be tempted to allow your insurance to lapse because lightning sometimes strikes twice."

Think about an equity line of credit. Don't draw from it, but it might be helpful if there's an emergency down the road.

It's also a good idea to finally do away with those high-interest credit cards. Go low and stay low. And don't simply look at your money, look around your house.

"The second step is to analyze your resources that you have today," said McGrigg. "Can you take part time work? Do you have assets that can be tapped? Are there even things in your home that you don't need that you could sell?"

Spritzer is busy setting up meetings and staying active to maintain contacts.

"Keeping involved in industry organizations that I've been a member of and staying involved in committees. There are probably six or seven organizations that I am probably involved in."

McGrigg says you can check with your creditors, but don't expect a lot of help until you're actually out of work.

Additional Resources

Check out Money Management International's informational pamphlet "When income decreases ... but the bills don't".


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