How to Prevent Debt if You Lose Your Job

Job security is not what it once was; in fact, many people would consider that phrase an oxy moron. There was a time when an individual would begin a job after leaving school and stay there until retirement. Those days are long gone. In recent years we have witnessed the proficient use of buzz words such as, corporate re-engineering and downsizing. These words often translate into one thing, layoffs. The threat of losing your job, with little or no warning, has become a reality that must be prepared for. Preventing to do so can leave a person with no resources to meet their monthly expenses. This scenario often leads to an accelerated use of credit, increased levels of debt, and damaged credit. Don't let this happen to you. Begin your planning now so in the event a layoff occurs you will be ready.

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• Prepare your resume in advance. If you have knowledge (or suspicions) that layoffs are immanent then begin to work on your resume. This will save you valuable time once it becomes a reality. Beginning to search for a job would also be appropriate.
• Prepare an emergency savings fund. This step is crucial to many aspects of financial planning. It provides funds to pay the bills so that an individual will not have to go into debt while he is looking for another job. Many experts suggest a minimum level of savings should equal 3 to 6 months of living expenses.
• Network. It never hurts to network within the business community. You never know when someone you talked to a few months back will end up hearing of a job (or hiring for a job) that fits your qualifications.
• Learn new skills. If you know that additional skills will be required in your profession down the road then learn them now. This will make you a more valuable company resource and reduce the likelihood that you will be laid off. Even in the event that you are let go these new skills may assist you in finding a new job.

• Begin looking for a job immediately. Do not take a break to regroup. The quicker you begin looking the quicker you will find something. The less time you spend without a job the less likely you will begin to accumulate debts. Take advantage of resources such as newspapers, the internet, and professional head hunters.
• File for unemployment. Get this process started quickly just in case it takes a while to find a new position.
• Consider a move. If your financial situation is dire enough consider moving to more affordable housing.

Take a part time job. Don't let pride get in your way. Taking a job working morning or evening hours will leave plenty of time during the day to look for something permanent. Remember that you want to be able to pay the bills without relying heavily on credit

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About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.