There’s a pretty decent probability that you’ll suffer through a layoff in your lifetime. That’s because each year, between 13% and 19% of the workforce is laid off.
While some layoffs are expected, many others come as complete surprises.
Just ask my husband and I, who have endured 4 layoffs (all surprises) between the two of us in the last decade.
Needless to say, between the filling out the exit paperwork, filing for unemployment, and finding that new job, we’ve definitely figured out how to survive unemployment.
That first layoff each of us endured was way worse than the succeeding layoffs. Why is that? Because after the first round, we realized there were things we could do that would prep us for future layoffs. And then we did them.
I’m going to share with you some of the best ways to prepare for a layoff ahead of time, given the fact that you might be facing one sooner rather than later.
Prep Tip #1: Prep Your Emergency Fund
Do you know the average time it takes for a newly laid off worker to rejoin the workforce? Right now, it’s 21.7 weeks, or around 5 months.
In our experience, this is pretty dead on – our shortest stint of unemployment was 3 months, and our longest was 5 months.
What you need to do right now, while you’re still getting those paychecks every other week or weekly, is to make sure your emergency savings fund can last for at least a 5-month period of unemployment (I’d go for 6 months, if I were you).
Tip: Can’t find any extra money right now to throw into your savings account? I dare you to walk away without ideas for squeezing money from your paychecks into savings with these 250 saving money tips.
Prep Tip #2 Get a Better Understanding of Your Rights
Did you know that you have rights as an employee, if a layoff occurs?
You see, the day you actually get laid off can be very emotional and shocking. So, you don’t have much time to really think things through.
That’s why it’s important to know what your rights are ahead of time.
The biggest one you need to know? You can negotiate your severance package: It’s totally true. So, don’t sign anything while you’re in the office and not thinking straight. Tell them that you will look over everything at home, and get back to them with a response by the deadline.
Prep Tip #3: Set Your Resume Update on Rotation
Don’t wait until you’ve been pulled into your boss’s office for a layoff and have had to turn over your computer, files, and everything else to your employer to update your resume.
Instead, resolve to update your resume on a consistent basis. This makes it much easier to do.
In fact, go ahead and set a reminder in your online calendar now, for every 3 months of this year, to sit down and update your resume to capture all the juicy details of what you’ve been working on, mini-promotions, new duties, etc.
Prep Tip #4: Pay Off Your Debts
Listen, I can tell you from experience that our debt load would have sunk us in unemployment. Getting ourselves debt-free (minus the mortgage) was KEY in us surviving each of these three layoffs, financially speaking.
To give you an idea, when we were in debt, we were sending $950/month to our debtors. Granted, we were sending more than the minimums, but the minimum payments still would have been around $500/month.
Do you know what the average unemployment insurance check looks like? If your total pay each month is $3,200, then an estimated amount – depending on your state – is around $123/week. That’s not much, and would not even have covered our debt payments, let alone groceries, the rent/mortgage, gas, etc.
Do yourself a favor, and pay off your debts before you find yourself laid off.
Sometimes a layoff is a blessing, and sometimes it’s a complete shock and you have to almost reinvent yourself. We’ve each been through both kinds, and have learned much from each. No matter what, it’s more likely now than ever that you’ll experience unemployment in your career. Because of this, I urge you to complete even a few of the steps above so that your next surprise layoff won’t be so bad. In fact, you might even get to enjoy part of it as a mini-retirement while in-between jobs.
Bio: Amanda L Grossman is the brain behind FrugalConfessions.com, where she helps Chief Family Officers (CFOs) learn how to control their money so that they can save a lot of it and live they life they want. You can also find her at MoneyProdigy.com, where she partners with Mamas to teach their kids all about how to manage money through money educational adventures, like the Mt. Everest Money Simulation.