How to Prepare for an Impending Layoff

Growing up I watched my dad get laid-off several times, and I seen first-hand the emotional and financial stress it can put on a family. This article will help you be better prepared in case a layoff ever occurs where you work. It is my hope you never need it, but you need to know how.

1) First, you need to realize that there's usually two areas a layoff will hit you--your finances and your emotions.

If it has just happened to you, there needs to be a time where you give yourself some time before making major decisions.

2) There are several things you can do to stabilize your finances in case of a layoff. One is to get out of much debt as possible.

How to do that can be a whole other article in itself, but I personally suggest reading books by financial advisor Dave Ramsey. There are other good authors out there as well, but his books are what helped my family.

By reducing or eliminating your debt, you reduce the amount of money in the form of payments that is leaving your household. In an emergency situation, you can survive on a small amount of money longer without any issues.

3) Another related thing you can do is increase your income through a small, part-time business.

Take inventory of your skills and see if there's something you can do on the side for extra income. The Internet has also opened up a lot of opportunity for normal people to work a day job and then run a business from their home in the evenings.

My philosophy is this: In investing, the conventional advice is "never put all your eggs in one basket." Yet many people are betting their financial futures on only one income source. Even good jobs and good companies have problems, and there's no reason not to have back-up income if you have the means to create it.

If possible, you also need to have a small cushion of money to serve as an emergency fund. Ideally this needs to be 3-6 months of your expenses, but realize this takes time to build. Usually you need to get out of debt first to be able to do this.

4) From an emotional standpoint, it often hurts to get laid-off, especially if you were great at your position and liked it.

People develop friendships on the job as well, and you miss people. Realize that this is not necessarily something you'll immediately bounce-back from, but you also don't need to cling to it either. The best thing you can do is make the best of the situation and try to use it as an opportunity to do something new in your life.

If you're a spouse or other family member of someone who has been laid-off, be supportive of them and encourage them. Men especially tend to take their self-worth from their jobs, and every working person needs someone to be there for them as they go through the process of getting something new.

More Tips:

• Make sure with children to explain on their level what has happened when if you are laid-off. They need to understand and it doesn't help them if you're stressed but try to pretend nothing is wrong around them. They pick up on that.

• You may find that your side-businesses eventually bring in more money than your job--there's nothing wrong with crossing over to being a business owner if you like it better. That's how a lot of business owners start out.

• Don't make the mistake in thinking your job is secure. Most companies do care and don't like laying people off, but it can happen anywhere. It can be an unexpected event for the company as well as you.