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You’re very good at your job and yet you’re about to be laid off.
That’s the unfortunate reality of job security – or the lack of it – in today’s up and down economy. Fortunately, a layoff doesn’t have to be total doom and gloom if you’re ready for it.
Here are five effective ways to prepare yourself emotionally and financially for a layoff.
Get your finances in order: Your layoff may be short or long but it’s prudent to plan for the long haul by determining the minimum amount of money you need each month to cover basic costs for food, housing, debt payments and so on. Identify and cut or, at least trimnonessential costs.
Find out how much you could receive in Employment Insurance (EI) benefits and other government programs such as those that provide funding for retraining programs.
Figure out how much you’ll need to withdraw from your savings or other sources to fund any remaining expenses. Then set a realistic budget and, when the time comes, stick to it.
Save in an emergency fund: Whether you’ve been working for a year or a decade, you should build an emergency fund that will cover at least six months of your essential expenses should you be laid off.
Stay the course with your investments: If you have a well-conceived financial plan that may include RRSPs, TFSAs, mutual funds and other investments, stay with it. Do not go chasing the latest investment craze by cashing in your investments and speculating on big returns from the latest “hot” stock. You’re much more likely to lose your money than to hit a wildly speculative jackpot.
Know your employee benefits: Find out about any company unemployment benefits you may be entitled to and if your employer-sponsored health/medical coverage and/or life insurance will end or continue for a period after your layoff. Consider converting these to individual coverage. Find out what your pension plan options are.
You may also be owed for unused vacation time, project completion bonuses, or other accrued financial benefits – so check.
If you are offered a severance package, don’t be shy about negotiating for a better one. If you aren’t offered a severance package, try for one — you may have an entitlement under provincial employment standards legislation.
Update your resume: You’re happy and fulfilled by your job but because you never know … keep your resume up to date and stay on the lookout for new opportunities. Networking is also important whether you’re employed or laid off — opportunities can come from anyone or anywhere.
Getting laid off is stressful but by taking the right steps you’ll ease your mind and your transition. In fact, being laid off may give you the time you need to take stock of your life and aim for something new and exciting.
You can ease your financial stress during a layoff (and afterward) by talking to your professional advisor about the best financial plan for your situation as it is today and as it will be tomorrow – no matter what tomorrow may bring.
Jeff Somers, BA, RRC, CFP works at Investors Group in Charlottetown. This column, written and published by Investors Group Financial Services Inc. and Investors Group Securities Inc. presents general information only and is not a solicitation to buy or sell any investments. Contact your own adviser for specific advice about your circumstances.