If Your lose Your Job

Years ago, the American Dream consisted primarily of buying a home, providing for the family, getting an education for the kids, and then enjoying retirement. As a result, many people found a good job with a big company when they were young and stayed there until retirement 40 years later. In today's environment of corporate downsizing, however, an environment where the average person changes jobs several times during a career, that scenario is more of a fantasy than a dream.

At some point in their lives, many people will be forced to leave their job, either because they are fired or laid off. It is most important at that time not to panic. With proper planning and sound decision making, you can weather the storm.

If you lose your job, your first task is to list all of your available financial sources, beginning with your spouse's income, if applicable. Then, if you were laid off, add your unemployment compensation, which will be roughly half of your salary up to $250 a week. Additionally, you may receive some kind of severance package and a disbursement from your pension.

The next step is to make a list of all your monthly bills that are absolutely necessary, such as mortgage or rent, utilities, auto payments, and insurance premiums, as well as an estimate of your monthly food costs. You should end up with two figures: the amount of money coming in, and the amount going out. If the money coming in is higher than the money going out, and the difference is enough to buy gas for your car and other necessities, you should be able to get by with some effort and sacrifice.

If, however, the opposite is true, you may have to take some more drastic measures, such as taking a job you may not consider up to your standards, selling some of you belongings, cashing in some of your investments, or taking the cash value of any life insurance you may have.

Another major problem for people who lose a job is keeping up with payments to creditors. It's essential to find a balance where you deal with the obligations, but are still able to afford such priority items as utilities or food. Your first step in dealing with debt is to make a list of all your creditors along with the minimum payments and total balance.

Then notify each creditor in writing of your situation and request a temporary repayment plan or suspension of payments until you find new employment. It's important to remember that, for the most part, the main objective of these companies is to eventually get repaid. As long as you stay in contact with them and communicate to them that you have every intention of fulfilling the obligation, they will work with you. Typically, creditors will avoid adversarial actions unless they feel you're trying to hide from them.

Above all else, stop making credit purchases. Now is the worst time to accumulate more debt because the interest adds up quickly and your payments will eventually become unaffordable.

Finally, don't hesitate to ask for professional help. We can give you the guidance you need to get through this rough time as painlessly as possible.