Preparing For the Possibility of a Layoff

credit: AdrianDCWith the economy on a downturn and the dreaded “recession” word in the air, such economic indicators as home foreclosures and 63,000 layoffs in February are sure to have people worried. In fact, the floundering economy may require many more layoffs, so even if you’re confident in your job, you should know how to prepare for a layoff:

• Set up emergency reserves: Traditional wisdom advises having saved at least three to six months of living expenses.
• Don’t max out your credit: Paying off debt is the last thing you’ll want to do if you find yourself jobless.
• Cut down on the luxuries: With danger looming, you should try to cut down on superfluous spending, adding those would-be luxuries to your emergency fund.
• Have money conversations: Don’t put it off: talk you your partner about finances and personal finance goals now so you can avoid fighting later.
• Pay down current debt: Tackling your debts, especially high-interest ones, is much better when you have a job. Don’t take your chances.
• Network: The more contacts you have, the better your employability.
• Open a new line of credit: Consider it your just-in-case fund, but open up new credit, like a home equity loan, while you are still employed. Don’t use it until you have to.
• Apply for disability coverage: Applying while you still have your high-paying job is a great security measure.
• Pursue your degree: If your employer offers education incentives or reimbursement, take them up on the offer. It’ll make you a more desirable employee.
• Look into your health insurance policy: Make sure you know what’s covered, and look into the costs of extending the plan with COBRA.

Please see MSN’s article for more details, and make sure you’re covered in case of layoff.