Layoff in your future? Plan now.

Updated

Can we ever really be 100% secure in our jobs? Of course not. Even the most stable companies are vulnerable to downturns in the economy or unanticipated problems like floods or fires. With the knowledge that you might someday be downsized or otherwise laid off, it makes sense to plan now for that possibility.

If you or your spouse lost a job, do you have enough in an emergency fund to carry you through? Sadly, most Americans would probably say no. But it's not too late to start on an emergency fund, even if you're only able to put $50 or $100 a month into it. I have a savings account that automatically takes money from my checking account each week. The money in that savings account is untouchable, except in the case of a dire emergency.

What expenses could you cut out of your lifestyle if your income was reduced? It's important to know what bills absolutely must be paid each month, versus what you're spending on unnecessary things. I regularly update my budget to reflect the minimum amount of income I need each month to pay the bills, versus what I actually spend each month. It's easy to see that I've got quite a few expenses each month that could be cut out of my budget if my income dropped.

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