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Financially Prepare Yourself for a Job Loss

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Many individuals lost their jobs and livelihoods during the 2008 financial crisis.  As a result, hopes and dreams were dashed.  The world was on the brink of a financial disaster!  People with jobs attempted to hold onto what they had while others scrambled to become employed.  I remember the time when I lost my job.  My entire department had been let go due to lack of sales.  Despite losing my job, it was not the end of the world.  I ended up getting better opportunities and being better prepared in case this happens again.  You too can prepare yourself!

One of the best ways to prepare for a job loss is to expect one.  You should never fool yourself into thinking that your job is secure.  There is always competition and you may find yourself replaced.  Remember, everyone is replaceable.  By expecting a job loss, you are psychologically preparing yourself for the inevitable.  This allows you to take action and create a backup plan in case the job falls through.  By setting up your mind for low expectations, you will be much happier and will take appropriate action when the time comes.

Once you prepare your mind to expect a job loss, you must create a plan.  You should plan to save money for an emergency fund covering at least 6 months of your expenses.  Besides saving money for an emergency fund, make a plan to network with friends and colleagues even while you are working.  Go to networking events and talk to friends of co-workers.  Make sure to take contact details of those who have quit and moved on to other companies.  Keep in touch with former co-workers.  They could help you land your next job.  They could be aware of openings that are not publicly posted.  When I lost my job in 2008, my friend was able to forward my resume which lead to a job opportunity three months after I lost my job.

Besides networking, once you lose your job, you should also consider doing contract work.  Often times, companies are more willing to hire contractors because companies can quickly let go of them and don’t have to provide benefits.  This could be a great opportunity to provide much needed cash flow quickly, not lose experience, and cover gaps in your resume.  Most contracts end up extending beyond their initial length.  Some contracts convert to full-time jobs and is a way to get your foot in the door.

Another way of preparing is to setup a side income while working.  You can start out by selling used items or doing freelance work for clients.  Having a side gig can help you gain additional skills and contacts that may lead to your next job.  Plus, the extra money you earn will contribute to your savings and allow you to earn an income even after a job loss.

Losing your job does not have to be stressful.  By networking, saving money, working side jobs, and being mentally prepared you will be in a better position to weather the coming storm!

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