According to a survey recently done by Bankrate.com, only 18% of Americans (decreased from 29% the year before) have six months’ worth of expenses saved.
On a scale from 1 to 10, how prepared are you if you were to get laid off tomorrow?
The “experts” had been warning us about the economic recession for years and looks like it finally is here.
The unemployment rate was all-time low at 3% and is now expecting to rise to 20%. Many of my friends were sent home due to Covid-19 without pay and are worried they will not have a job to come back to.
As strong as our economy (was) is, it can also be very fragile. In 2008, the crash happened due to the housing market. In 2020, it’s due to a virus (Covid-19).
Preparing for a layoff is like buying insurance. You have it, but you don’t ever want to use it.
Take action now: Grab your FREE Monthly Budget Planner and start taking control of your finances.
How To Prepare For a Layoff or Recession
1. Create a Budget
You know that you need to have an emergency fund, but do you know exactly how much?
Start by keeping track and making a list of your monthly expenses. Go through the list and eliminate all the non-essential things such as cable, daily Starbucks coffee, eating out and entertainment, etc.
Put that extra money towards your savings account/emergency fund.
I recommend the budget app Mint. It is a great budget tracker app and is free to sign up. You can see where all of your money is going and coming.
I’ve always been good with my money, but I didn’t realize how much I was spending on eating out.
2. Start an Emergency Fund
We’ve all heard that a good rule of thumb is 6 months, but is it enough? I would aim for at least 9 months.
It doesn’t hurt to have that little extra cushion. Six months will fly by in a blink of an eye and sometimes it takes longer than that to find your next job. Determine the bare minimum cost to cover 9 months’ worth of expenses and begin contributing to it.
It’s easier said than done, especially if you’re living from paycheck to paycheck. There are a lot of ways you can earn extra money on the side such as taking paid online surveys, clean out your closet and sell them on Poshmark, OfferUp, Letgo.
3. Line Up Credit
I never would have thought of this method if I didn’t know someone who does this – and does it very successfully. My friend has extremely high monthly expenses and sometimes only needs a few months of borrowed money to stay afloat.
I don’t believe in living on a credit card, but sometimes it might be the only way. It is definitely a lot easier to get a credit card while you still have a job. Make sure to get one without the annual fee and all the hidden fees.
4. Maximize Your Benefits
I have a habit of waiting until the end of the year to use my health benefits. Go get your yearly check-up and/or dental work now. You want to maximize your benefits at the beginning of the year.
I didn’t know my vision plan has a 12-month rolling period. I waited until December of last year to use it and now I have to wait until December to be able to use it again. The insurance companies are getting smarter too.
5. Get Educated On Your Unemployment Benefits
Every state has its own requirements. You can go to their website and estimate how much you’d receive. Figure out how much you will receive and how much you need to save in order to cover your monthly expenses.
Most employers offer COBRA, a continuation of your healthcare benefits. Unfortunately, it is extremely expensive and you might be better off looking elsewhere.
6. Keep Resume Up-To-Date
Update your resume every couple of months. If you get a new certificate or do extra projects, update it right away.
It is a lot easier to update your resume as you go instead of doing it all at once while looking for a new job. It’s an added stress to an already stressful situation.
7. Side Hustle/ Extra Income
You won’t get rich taking paid online surveys, but you can make an extra $200-$500 a month. If you consistently make $500 per month extra taking surveys, you will have $3,000 in 6 months.
Related: 65 Ways To Make Extra Money in 2020
8. Start a Blog
You can definitely make a living being a full-time blogger. It’s not a get rich quick scheme. It takes work and time, so don’t wait to start.
It can take anywhere between 6 months to a couple of years to earn a decent income.
If you are interested in starting a blog, check out my step-by-step instructions on how you can have it up and running in 15 minutes.
I currently use SiteGround to host my blog and I cannot recommend it enough. They have the best customer service and you will need all the help you can get starting out. Get started today with SiteGround for only $3.95/month.
9. Invest Without Knowing
Acorns is an app that invests your spare change for you.
What does this have anything to do with preparing for a layoff?
Let’s say you buy a cup of coffee for $3.40. Acorns will round it up and invest $0.60 for you. The best part is you won’t even notice that you’re investing.
It is a great way to save money. These little amounts can add up really fast and before you know it…you will have thousands of dollars saved up for raining days.
Here is the best part…Acorns will give you $5 just to get started!
Register here: Get your $5 bonus today
10. Look For Work At Home Jobs
I have been working from home for the past 4 years and I cannot even begin to tell you how wonderful it is. Not having to deal with traffic daily and now I can hide out from Covid-19.
If you’re sitting at home not knowing what to do next, now is the time to pick up some new skills and learn how to work from home.
Here are a few jobs you can work from home:
- Virtual Assistant
- Teach English online
- Get paid to flirt online
- Sell on Etsy
- Start a Dog Sitting Business
Having multiple streams of income is one of the best ways to prepare for a layoff. It’s just like the old saying “don’t put all your eggs in one basket”. There is no better than now to prepare yourself, learn new skills, and explore other work at home options.
Let me know some of the things you’re doing to prepare for a layoff.