Tuesday, February 23, 2010

What If This Happened to You?

By "this" I mean this guys situation. I was browsing through reddit just now and saw this guy's post. He is an independent contractor who just found out his client is bankrupt and he has about $12 in his bank account. And since he is a contractor, he probably isn't entitled to unemployment and all of those other neat little perks that employees get. Bummer.

This is a situation that anyone could find themselves in at some point in their life. There have been quite a few news articles of people going to work one morning only to find the doors padlocked and no more job. Like many things, we think that sort of thing only happens to 'other' people but the truth is, it could happen to you or me. Which means everyone should start today, immediately, to get themselves into a better position so that if such a scenario happens in your life, you will have something better to fall back on than the $12 in your checking account. Here's what to do:
  • Have an emergency fund of at least $1000 NOW. Sell things if you have to, even your blood if you have to, in order to accomplish this goal as quickly as possible.
  • Get out of debt. A crisis is much easier to handle if you don't have creditors calling your house twenty times a day because you are late on your debt payment.
  • Have multiple streams of income. Actually, the more sources of income you have coming into your life each month, the less the loss of one client will affect you both financially and psychologically. If your entire life is wrapped around one employer or one client, you literally have all of your eggs in one basket. Consider a part time job, a side business, selling products online, watching the neighbors kids after school if this fits in with your life style, taking random temporary jobs such as being a census worker, etc.
  • Have people in your life that you can rely on. The better your support network, the better you will be able to get through tough times (ie: a friend who would let you live on their couch for a while, a mom who will do your laundry, a friend who will bring you dinner, etc).
  • Never stop networking and developing connections in your field and in your social life. The fact is that rumors about businesses heading downhill often are heard around the water cooler prior to something major happening like the doors being locked. Another fact is that should you need another job, most of the best job referrals come through friends and business acquaintances who know you and know your work and will give you a lead on a great job AND put in a good word for you.

Should you do the above and still find yourself in the unenviable position as the guy in the reddit post, here are some things to do immediately:

  • Take advantage of resources that are available to you. This can be everything from an employee severance package or unemployment to the local food bank or community job re-training program.
  • Give yourself about five minutes of panic and a half hour pity party then move forward. Sometimes this sort of setback can lead people into a lengthy downward spiral. Don't let a temporary setback create an extended problem in your life. Look forward, move forward, and keep doing so until you get back on better footing.
  • Ratchet back your lifestyle immediately. Cut the cable and the home phone, stop eating out AT ALL, trade in the weekly movie night at the theater for a cozy movie night at home with a free movie from the library, etc.
  • Look for a great full time job but don't overlook some cool part time jobs that could provide you the flexibility to work while also having time to build job skills, develop a business, or go back to school.

An unexpected job loss is never a good thing, but if you are prepared, it won't be a catastrophe and may actually open the doors to bigger and better things.

1 comment:

  1. Of all your recommendations I like "start an emergency fund" the best. This is basic to financial survial.