No one enjoys thinking about the possibility of being laid off or undergoing company reorganization, but unfortunately, these can be everyday realities in today's job market. The uncertainty of what's to come can be overwhelming, especially when it comes to finances.
If you're in a position where your company may be undergoing a restructuring or you're worried about job security in the future, this article is for you. Below we'll go over some things to be aware of financially during this time and some steps you can take to prepare yourself for any potential ups and downs.
Assess Your Financial Situation
The first thing to do when you're worried about job security is to assess your current financial situation. Start by creating a budget to track your income and expenses each month. This will give you a better understanding of your spending habits and help you identify areas where you can cut back if needed.
Next, take a closer look at your savings. Make sure you have enough saved to cover at least six months of living expenses, including rent/mortgage payments, car payments, groceries, and utilities. If you don't have enough saved, consider cutting back on non-essential expenses or picking up a side hustle to increase your income.
Understand Your Benefits
If your company is going through a reorganization, make sure you fully understand any changes to your healthcare coverage, 401(k) plan, or other employee benefits. This may be a good time to consult with a financial planner or HR representative to ensure you're making the best decisions for your future.
Find a local financial planner who is familiar with your benefits package. Many planners have helped your colleagues to navigate downsizing, life events, and retirement decisions. Ask around and find local professionals.
Start Networking and Work on Career Development Skills
Even if you aren't currently job searching, it's never too early to start building your professional network. Reach out to former colleagues, attend industry networking events, or even join an online community or forum in your field. By building relationships now, you'll have a better chance of landing a new opportunity if you do find yourself laid off down the road. Upskilling or acquiring new skills will also make you more valuable to potential employers, giving you an edge in a competitive job market.
Consider Additional Income Streams
Another way to prepare yourself financially for job market uncertainty is to look for additional income streams. This could mean picking up a side hustle or working a part-time job on weekends. Consider monetizing a hobby, like freelance writing or photography, or selling products on Etsy or other online marketplaces. The goal is to have multiple streams of income that can help supplement your savings and provide an additional cushion should you lose your job.
Finally, it's important to stay positive during times of uncertainty. While it's natural to feel anxious about the future, remember that you have the power to control your financial situation. Take action where you can, like saving more and building your network, and work on maintaining a positive mindset. Focus on the things you can control and remind yourself that you're taking steps to prepare yourself for the future.
Also, remember that changing jobs could mean a salary increase. “According to research by Zippia, the average salary increase for those who switch jobs is 14.8%, and those who stay in a job for more than two years tend to make less.”
Remember that a career transition can be a starting point for exciting new opportunities if you remain flexible and resilient. As a financial planner, I am here to help guide you through this process and offer whatever assistance you may need in navigating these choppy waters.