Now that you have started to get a game plan together to look for another position, it is time to deal with your finances. This is going to take a bunch of will-power and discipline. But . . . if you do find a position relatively quickly, you will be on your way to improving your financial position from now on!
The easy advice for going into “layoff mode” is to start aggressively saving so that you will have as much money as possible if the checks stop rolling in. Like I said, the advice is easy, the implementation is not. In order to start your preparation, you have to realize that there are two parts that need to be considered – current actions and future actions.
These are things that you can do right now. Actually, they would be good exercises even if you were not going into “layoff mode”.
First, you need to know how much you spend every week. For one week, track everything that you spend money on excluding bills like car and mortgage payments. Include everything from the Coke or coffee in the morning to the pack of gum that you bought on the way home. Keep a pen and small notebook with you so that it will be easier to keep track of. In order to cut your spending you have to know exactly what you spend. At the end of the week, I think that you will be surprised on how much you actually spent on small things that you do not think twice about buying.
Now that you know how much you spend in a week, try to find places that you can cut. Be very thoughtful and deliberate when you make purchases and think about the impact that purchase will have on your weekly spending. OK, OK, I will stop beating around the bush – the above is just a very nice way of saying “stop buying junk and start saving”. Now there, I said it. Just remember that it is the little things that add up over time.
As much as you hate it, you are going to have to make a budget. If you already have a budget – awesome! If you don’t no big deal. The hard part is not making it – the hard part is sticking to it once you make it.
To start a budget you need to list all of the expenses you will have for the month (mortgage payment or rent, car payment, utilities, credit card payments, food, etc.). Also list all of the income that you have each month. For variable expenses such as food and electricity, try to find an average month’s amount and plug that into your budget. As you track your spending your goal is not to go over the average amounts. There are many, many ways and schools of thought about the mechanics of budgeting, but it all boils down to knowing where you spend your money and staying within limits that you set for your variable expenses.
This where you really dig deep into the items that make up your budget. Go through the budget line by line and mark beside each what is an absolute need and what is a want. For example, you need your house or apartment, but you want the 250 cable channels. This exercise will give you some ideas of where in your budget you can cut if things really get tough.
In this stage, you will also need to try and find out if you can get better deals on the things that you do keep in your budget. For example, now is the time to shop around for car insurance or see if you can get a better deal on your cellular phones by switching providers. Or even see if it would make sense to refinance your mortgage. Just try and find better deals for the things that you want to keep in your budget
Layoffs are not fun, but being realistic and prepared will go a long way toward helping you make it through this difficult time. I have found that sometimes layoffs can be a blessing in disguise. It might take a while to find what that blessing is, but hang in there it will come.