While many of your peers and friends might be without a job in these challenging times, you are reading this article because you are employed. You realize, though, that feeling safely employed does not mean that you are safely employed. Many people will at least once in their lifetime lose employment involuntarily – independent of the level of hierarchy, tenure, or identification with and commitment to the company.
Here are 4 steps you can take now to prepare for the risk of job loss years in advance.
Step 1: Save, save, save
The best time to save is when you are fully employed. You get a regular paycheck and potentially a bonus at the end of the year. How much should you save for the proverbial “rainy day”? I suggest at least a full year of living expenses. This might be higher than many financial advisors recommend, but having a year of money in the bank, stashed in safe CDs or savings accounts, feels pretty good. It is a great insurance policy and will give you some peace of mind. If you receive severance as well, your money will stretch out easily to 15 or even 18 months, not counting unemployment benefits you might be getting. The less you are financially dependent on the job, the better you will be off mentally and the better you will cope with job loss should it happen.
Step 2: Create your “bucket list”
The second step for you should be creating your “bucket list”. Don’t forget to involve your spouse. Talk about unfulfilled dreams, and discuss what the two of you would do if one or both of you were being laid off. Would you stay put, take a dream vacation, start something new together, or even move? Reflect on all the things you never had the time for during employment; Losing your job might allow you to catch up. You gain valuable time, a true gift to you. Write the results of your reflection down on paper and re-visit them from time to time. It might all be far off now, but having this sheet of paper handy to pull out if the ax falls, can be very helpful.
Step 3: Think ahead about in which circumstances you would even leave on your own
What if you are indeed safely employed for good? Will you ever be able to fulfill the dreams you put down on paper earlier? You might have to ask yourself a tough question: “At what point of time in my life does the trade-off of job and money versus time, time to travel or start something new tilt in favor of the latter?” You might realize that you don’t want to wait for somebody else to decide for you. In that case set yourself a date when to quit or take a break.
Step 4: Consider which parts of your “bucket list” you can start implementing while being employed
The older you are, the less time is left to fulfill your dreams that you have not realized yet. You also have a higher chance of getting sick or even dying. Hence, once you have your “bucket list”, you might want to see what you can do while being employed. Maybe you go on shorter trips, use the sabbatical or part-time policy of your company to take some time off for a dream vacation, shift your work-life balance to engage with a charity, or reject new tasks at work that would be too taxing on your health. Whatever you can realize from your “bucket list” or might help you live longer, do it. Free time for you might be more valuable than the associated reduction in paycheck.
In summary, enjoy your career to the fullest, save, and don’t forget to live life. Have your “bucket list” ready. Like the fire emergency training at your workplace when they show you where the staircase is to leave the building, having money saved and your plan ready are your ticket to happiness when thrown off the corporate bus.