Recently the job market has been a bit unsteady. This makes financial preparedness more important than ever, especially for women whose careers are more likely to be impacted by economic downturns. This was made crystal clear during the COVID-19 pandemic, where women’s jobs were 1.8 times more vulnerable to the crisis than men’s. With company layoffs becoming a frequent headline, let’s talk about building a solid plan to navigate potential job loss and maintain financial stability.
Assessing Your Financial Health Is Step One In Preparing for a Layoff
Before taking any specific steps, it’s essential to understand your current financial situation. Start by reviewing your savings and emergency funds to ensure you have a safety net. Ideally, an emergency fund should cover 3-6 months of living expenses.
Next, calculate your monthly expenses, including rent/mortgage, utilities, groceries, transportation, insurance, and discretionary spending etc. Separate what is essential from what isn’t so you can have this number in mind. This will help you identify areas where you can cut back if necessary.
Finally, assess your debts, including credit cards, student loans, and car loans, to prioritize payments and manage obligations more effectively. Effective debt management can reduce financial stress during a layoff. Prioritizing paying off high-interest debts, such as credit card balances, to reduce the overall financial burden is a great goal to focus on now, while income is consistent.
Understanding your financial health is the foundation for building a robust strategy to weather a layoff or any kind of financial change.
Building an Emergency Fund
We know you’ve heard it before, but this is your reminder that having a robust emergency fund is critical for financial resilience and preparing for a layoff. Aim to save at least 3-6 months’ worth of living expenses to cover essential costs such as housing, food, utilities, and insurance. If your emergency fund is lacking, consider ways you can reallocate spending – only for a time- to build this back up.
The best way to make this happen is to automate savings, ideally to a high-yield savings account. You can set it and forget it, knowing you’re building an important cushion for any potential job cuts in the future. We know it’s not a glamorous topic, but building an emergency fund is a proactive choice that provides financial security during uncertain times.
Diversifying Income Sources
Diversifying your income streams can provide additional financial security. We know you’re a busy executive, so side hustles aren’t going to be the ideal choice here. Instead, consider investments that provide passive income, like dividend-paying stocks or building a portfolio with rental properties. Diversifying income not only increases financial stability but also builds a safety net to cushion the impact of a layoff.
Updating Your Resume and LinkedIn
A not-often-considered way to build up financial preparedness is updating your resume and your LinkedIn.
Take a moment to update your resume with recent achievements. Don’t forget to include KPIs that you directly contributed to within your current position as these can be powerful on your resume.
Then, log-in to LinkedIn and ‘dust-off’ that profile. Staying relevant in your professional network – even while in high-powered positions – can be a great tool for finding a new job, should you need to. This is also a great time to reach out to colleagues from the past and request a recommendation for your LinkedIn profile.
Mental and Emotional Preparedness
We know a layoff can be emotionally challenging, and maintaining a positive mindset is essential. Seek support from friends, family, or a professional counselor to discuss your feelings and concerns. Stay positive by focusing on your strengths and accomplishments, and remember that a layoff does not define your worth or capabilities. Continue to make time to take care of yourself and reduce stress – maybe even try a new hobby. Don’t forget you can always join our community as a way to have support right in your inbox.
Proactive Financial Planning Is Key When Preparing for a Layoff
Proactive financial planning is the key to staying resilient in the face of potential layoffs. By assessing your financial health, building an emergency fund, diversifying income sources, updating your resume and skills, and maintaining emotional well-being, you can navigate job loss with confidence and stability. We want you to start preparing now, because it’s a choice that will only benefit you- whether or not a layoff happens for you. By taking the steps above, you can begin to build financial resilience and ensure you are ready to face any economic challenges that come your way.
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