Surviving A Job Layoff

Job layoffs are all too common in today’s economic climate, leaving many people in a financial bind when the family income drops. If economic misfortune strikes your family, there are steps you can take to survive a job layoff. Keep in mind that these are temporary measures.

The first step is to take control. Start by assessing your current financial situation. Estimate your family income with the loss of a paycheck. List your regular monthly and yearly bills. This usually includes mortgage or rent payment, utilities and possibly a car payment. List all your credit card debt as well. Estimate your monthly grocery, gas and miscellaneous expenses. Don’t forget to include expenses that come due once or twice a year such as car insurance.

After you have a list of monthly income and expenses, develop a budget. Most people find their expenses are greater than their income after a job layoff. This requires reducing expenses. A family financial meeting can help all family members understand the importance of reducing expenses and what they need to do to help the family survive the layoff. Family members may need to estimate past spending to realize where reductions can be made. For example, many family members eat lunch out or shop for recreation. These expenses add up at a time when every penny counts. Discuss how everyone can contribute by reducing expenses.

Review your budget on a regular basis. If your family continues to operate in the red month after month, expenses must be reduced or your income must rise.

Additional steps to secure your financial future:

• Make sure you understand severance packages and insurance coverage offered by your employer. If you’re not sure, ask.

• Ask your employer about help in finding another job or retraining opportunities.
  „ Notify all creditors of your financial situation and inform them of your ability and plans to make payments. Don’t make any promises that you can’t keep.

• Use new credit only for absolute necessities that cannot be delayed, forgone or paid in any other way. Keep records of the credit used.

• Take steps to regain employment and take advantage of available programs, benefits and insurance to supplement income.

• Make use of community resources to maintain health, vitality and a positive outlook. Take steps to make sure that you and your family continue to eat well, get enough rest and maintain social contacts.
  

For additional information on financial management, call your local Cooperative Extension Center and ask for the publication, “Making a Budget & Making It Work,” FCS 345.