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How to Prepare for Unemployment While Employed

12 Tips to Help You Prepare for Unemployment

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Unemployed man with ready to work sign

Be Prepared Because You Can't Predict the Future

Sean Locke/Photodisc/Getty Images

If you’re reading this, congratulations. You’re probably still employed. That means that you have time to put your financial, social, and work affairs in order in case your employment status changes. You can prepare for unemployment while still employed. In fact, there is no better time to prepare for unemployment than while you're still employed.

While you can’t redo the decisions you’ve made over the past two to 10 years, you can make decisions now that will limit your exposure if your current employment ends.

And, end it might. In the current economic climate, with the threat and reality of increased governmental regulation; the threats of increased employer costs via prescribed health care and government interference in the employer-employee relationship in areas such as mandatory benefits; and general uncertainty about sales and profitability, employers are still shedding jobs.

Most importantly, if you are unemployed, or potentially unemployed, it is important for you to know that, in self-defense, employers are creating fewer jobs and some jobs have disappeared forever. This will impact the length of time you are unemployed and highlights the importance of the need to be prepared for unemployment.

How Do You Know to Get Ready for Unemployment

How will you know if the unemployment axe will fall? There are signs and symptoms for which you need to watch. Employees in some positions, such as finance or sales, usually have a better picture of their company's health.

Some companies aim for communication and results transparency and all employees know when they need to prepare for unemployment. Whichever the case in your organization, this is how to know when and if unemployment looms for you. Are you in danger of getting fired or layed off?

12 Tips To Prepare for Unemployment

Given this economic climate, your unemployment, whether expected, or hitting you out of the clear blue, may last awhile. With this possibility in mind, what can you do now to preserve and protect your family and your lifestyle should you find yourself suddenly unemployed?

Unemployment Tip: Save Money

Recognizing that this is easy to say, your best strategy to meet unemployment is to have money in the bank. By some figures I have seen, the average person who loses their job has less than a couple of weeks of savings in the bank.

According to the Washington Independent, a “Brandeis University study finds that four in 10 families don’t have enough savings or assets on hand to pay for essential expenses during a period of unemployment. The report also notes that the poor economy is hitting minority households particularly hard, erasing their economic gains of the past two decades and widening a racial wealth gap. Additionally, the lack of savings is affecting a family’s mobility, their ability to go where the jobs are."

Websites devoted to saving money abound and are worth your review. At About.com, we offer a variety that meet your life cycle needs, from frugal living to financial planning, as examples.

Unemployment Tip: Delay Major Purchases

If you have any inkling that you may lose your job, or even if you don’t, now is the time to delay major purchases which are unnecessary. An unemployed friend’s refrigerator bit the dust recently and she had to replace it but she economized by eliminating “nice to’s” such as the ice maker.

When stores start offering options such as payment plans and lay-away (remember lay-away?), run, don’t walk in the opposite direction. Recently, on television, for example, furniture stores are offering to delay interest payments for four years.

Resist these siren calls of “buy now.” Despite the fact that your purchases will aid the economy, you need to prepare for unemployment.

Unemployment Tip: Live on One Salary

For a family in which two or more members are employed, consider trying to live on one salary to build savings, eliminate debt, and prepare for the potential consequences of unemployment.

Unemployment Tip: Use Credit Cards for Emergencies Only

Unless the item is essential, and you’d be surprised how few items are actually essential, control the urge to purchase using a credit card. The purchase price always comes due and the interest adds up to more than you ever imagine.

Credit is the main factor in families living too close to the edge in the event of unexpected unemployment. In the unemployment stories featured on Alison Doyle's job searching site, the readers who shared their unemployment stories cite credit card debt as one of the deepest holes they had to climb out of when they became unemployed.

Unemployment Tip: Stay Prepared to Job Search

Your resume and references should always remain up-to-date. You never know when you’ll need them and you don’t want to spend the first potentially productive days of your unemployment updating application materials and contacting references.

Likewise, maintain your network of contacts while you are employed. Stay active in professional associations so you’ll be the first to know of job openings and receive leads via word-of-mouth.

Prior to unemployment is also the time to build your professional presence on social networking sites such as LinkedIn, Facebook, and Twitter. It can take time to build an effective brand online and to do the networking necessary to expand contacts.

Prepare for potential unemployment with current job search materials and online and offline networks of contacts. About.com’s Dawn Rosenberg-McKay offers additional ideas about staying marketable while you are employed – before the dreaded unemployment event occurs.

Unemployment Tip: Create Mobility Options

While many are tied down with homes, family, social commitments, a partner’s job, and more, in the event of unemployment, flexibility and mobility may make the difference between staying unemployed and finding a new position.

Prepare for unemployment by maintaining as much flexibility and mobility as possible, if only by charting out “what if” scenarios as opposed to “we can’t” scenarios when discussing your future with your family.

Related to Prepared for Unemployment

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  2. Money
  3. Human Resources
  4. Performance Management, Evaluation, Review, Improvement
  5. When Employment Ends
  6. How to Prepare for Unemployment While Employed

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