For many workers, job security is top of mind amid mass layoffs from major companies. Last month was the worst October for layoff announcements in more than two decades, according to the global outplacement firm Challenger, Gray & christmas. Plus, the ongoing government shutdown – which is now the longest on record – has left thousands of federal employees furloughed or working without pay.There’s never a good time to lose your job – and you may not know whether a layoff is coming. However, there are a few steps you can take now to protect your financial security in the event of the worst-case scenario.
If you’re worried about a potential layoff, don’t wait until the bad news comes your way to take action. there are steps you can take to position yourself to ride out a period of unemployment.
1. Know your rights and benefits
Understanding your rights following a job loss – and knowing what benefits are available to you – can help ensure you get everything you’re entitled to.
Look over your employment contract to find out what happens to your insurance benefits upon termination, whether you’ll still have access to any employee benefits once your role comes to an end, and if you’re entitled to a severance package.
You should also visit your state’s unemployment website, as each state has its own eligibility and filing process.Learn more about waiting periods, required documentation, and benefit amounts (and how long they last).
Once you’re armed with this information, you can make a game plan in case you lose your job.
2. Revisit your budget and have a backup plan
Start by reviewing your current monthly spending and income. You can use a budgeting app or an Excel spreadsheet to categorize expenses into fixed and variable expenses. This will give you a clear picture of where your money goes right now and where you need to scale back.
Once you know your baseline,the next step is to create a lean version of your budget that you can switch to instantly if your income were to drop. This version should focus entirely on covering essentials such as housing, food, transportation, insurance, and minimum debt payments.
In this lean version of your budget, cut discretionary spending such as subscriptions, gym memberships, dining out, or streaming platforms. The goal is to identify the absolute minimum you need to live comfortably while job hunting.
While a job loss is never ideal, knowing your numbers and having an