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How to Prepare for Losing Your Job

One of the most traumatic financial disasters you can face, and millions of Americans have in the last two years, is losing your job. The key to bouncing back on your feet is to prepare for it ahead of time. There are plenty of things you can do that will soften the blow of being fired, though nothing will completely dampen it, and as long as you put some things in place you can make your life a little easier for the next few months.

The general idea behind the tips in the “While You Have a Job” is to setup a scenario where you don’t feel like you’ve been thrown into the middle of the Pacific Ocean without a life preserver. You want to set things up so that if you are fired, you can bounce back as quickly as possible and those tips, hopefully, put you on that path. The tips in the “When You Are Fired” are a little less novel because the general strategy for finding a new job is pretty well laid out.

I hope this latest edition of the Financial Contingency Plan series [3] helps you out!

While You Have a Job

Build up a Network
With the exception of my first job, all of my subsequent careers started with a referral from an existing employee. If you’ve been working for quite some time, you’ve probably developed a network of friends and associates you can call on in the event you are let go. The economy isn’t in the best of shape at the moment so employers are not eager to hire on new employees before knowing their future business prospects. If they are, they will likely turn to their existing employees for help since a referral is better than a random person off the street (or screen).

It’s important to build up and cultivate your network so that you can feel comfortable asking them if they have any openings.

Refresh Your Resume
I recommend updating your resume every three months [4] (or six, depending on how busy you are). By refreshing your resume often, especially when you don’t need to, you don’t feel any pressure. You also get to do it on a clear mind with a good memory of what you’ve accomplished over the last three or six months. If you are forced to recall several years of work at a moment of crisis, you will probably forget something important or remember it imperfectly.

Build up an Emergency Fund
Since you currently have a job, make sure you are saving towards an emergency fund. If you are fired, you need confidence that a six or twelve month financial safety net will give you. You will get unemployment benefits, which will soften the blow and strength out that emergency fund a little more, but its your emergency fund that will supply the bulk of your spending until you find a new employer. Start saving now.

When You Are Fired

OK, it seems a little fatalistic to title this section like that but it’s the truth (and hopefully you’ll never have to use this advice!), this is what you need to do if you’re fired:

Losing a job can be very traumatic, but if you prepare for it and enter it in a good frame of mine, you’re much more likely to find success sooner. Don’t worry if you don’t “bounce back” quickly, no one expects you to, but regaining your confidence and your composure is absolutely crucial.

(Photo: theclevelandkid24 [8])