Layoffs are hard, but not all layoffs are totally unexpected. Often you can see a layoff coming if you keep your eyes and ears open. Some warning signs: The company seems to be struggling and bills aren’t getting paid or customers aren’t getting their orders. Management shake ups are happening regularly as the company tries to find their miracle worker. Other departments are laying people off. Pay and benefits are getting cut in an effort to keep the company afloat. The suits are congregating in greater numbers or the suits from corporate are spending more time at your office. Rumors are flying (not all office gossip is made up; some of it is rooted in fact). And sometimes you just get that gut feeling that doom is coming. These are all signs that a layoff might be in your future.
Sometimes you may only see the warning signs for a few weeks. Other times you can see the end coming for several months. I once worked for a company that spent a year in a downward spiral. All of the things I listed above were happening. Everyone knew it was coming and many of us took that year to prepare for the inevitable. As a result, most of us weathered the eventual end much better than we otherwise might have. Here are some ways to prepare if you start to get the sense that the axe is about to fall.
When you think a layoff is coming, that is the time to start cutting your spending. Don’t wait until it’s already happened. Look for anything in your budget that is non-essential and cut it. Subscriptions, cable, large cell phone packages, activities for the kids, gym memberships, home phone (if you have cell phones you can use), eating out, and recreational shopping all need to go. Look at your spending, identify the things you don’t need and cut them. You need to focus on essentials. You also need to become more frugal in general. Trim your utility use, use coupons, drive less to conserve gas, mend clothing rather than buying new, think about starting a small garden, and shop yard sales or thrift stores for some of your needs. During this time of uncertainty don’t purchase anything that isn’t necessary and trim all of your daily expenses where possible.
All that money you’re saving from above? Plow it into a savings account. Don’t lock it up in CD’s or stocks, though. Keep it liquid and easy to get to. That way it will be there if you need to draw on it after you’re laid off.
Evaluate Retirement Savings
Think about stopping your retirement contributions. If you’re contributing to your 401K, you might want to think about stopping until the situation at work is resolved. Don’t liquidate any accounts you already have, but pause your contributions going forward. That will give you some extra money in each paycheck that you can save, use for maintenance that needs to be done, or pay down debt. If you have a fully funded emergency fund this might not apply to you, but if you need to generate extra cash, this can be one way.
Think about paying off debt. It’s tempting to save every penny that you can rather than using cash to pay off debt, but give careful thought to paying off debt while you still have an income. High interest rates can cripple you during a layoff so if you can get rid of them now, it’ll be one less worry if you lose your job. Do the math to figure out the best solution.
Prepare For Job Hunt
Get ready for the job hunt. Start networking and polishing up your resume. Set up accounts at sites like LinkedIn and the major job search sites such as Monster.com. Start reading the classifieds. (Yes, some jobs, particularly government work, still advertise exclusively in the paper.) Go ahead and start looking for a new job. Don’t wait until you have no choice.
Consider Other Work
Start looking for fill-in work. Now is the time to find a second job, or start freelancing. Don’t wait until the last paycheck is spent to start trying to find part-time work. Working two jobs is no fun, but not only can the income provide a lifeline if you are laid off, the extra money can be stashed in the months leading up to the layoff, giving you an even bigger cushion when the layoff happens. If you have a partner who currently stays at home, he or she may need to get out there and start looking, too.
Take care of medical needs while you still have insurance. Get everyone to the doctor for physicals and other routine screenings while you have insurance. If any conditions are discovered, start treatment right away. Get refills on all prescriptions, too.
Transfer benefits to your partner’s plan, if you can. If your partner is still employed, find out what you need to do to move your health and other benefits to their plan, if you can. Better to do it preemptively or during the open enrollment period than to be left out later.
Learn New Skills
If you have some time before the layoff, take the time to upgrade your skill set. Take a community college or extension class in a new software program. Get certified if your field requires/prefers certified workers. Learn a language if it will help you to be more competitive in the marketplace. Figure out what “sells” in your field and acquire those skills or improve the ones you have. You can learn a lot of things for free via books and webinars, too.
Take care of urgent maintenance. If your car is making weird noises or your roof is already leaking, get them fixed while you still have an income. Yes, it’s tempting to put it off and stash the cash, but little problems quickly turn into big problems that are even costlier to fix.
Search For Refunds
Get any money back that you can. If you have any vacations booked, cancel and get the deposit money back. If you have merchandise that you don’t really need and it still has the tags on it, return it to the store. If anyone owes you money, press them for it. If it’s tax time and you’re due for a refund, file as soon as you can. If you have any outstanding rebates, send them in. If there is any outstanding money that you can dig up, get it back and put it into your savings.
Bring In Extra Money
There are lots of ways to bring in extra cash. You can try “Get Paid To” sites which reward you for doing surveys or participating in offers, or you can try any of these ideas for bringing in fast money. There are many ways to get money without having to take on another job.
Stock The Pantry
If you have the time before the layoff, combine coupons and hitting the sales to stock up your pantry. You can buy many non-perishable foods, toiletries, cleaning items, pet foods, and other household items at deep discounts if you shop wisely. Many things can be frozen for longer life, as well. Don’t buy more than you can use before it goes bad, though. Done wisely, stockpiling can give you a cushion of food and supplies during a layoff.
And if you do all of these things and don’t get laid off? Well, it wasn’t a wasted effort. You’ve saved some money and prepared yourself to find another job. Who knows? Maybe you’ll even find a better job and be able to move on your own terms. It’s better to prepare and not have it happen than it is to wait until the bitter end and then say,”This is terrible! I’m not prepared to be laid off. I have no money and I don’t know where to start!”
(Photo courtesy of bpbailey)