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How to Prepare for Job Loss

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Thinking about losing your job is scary. Here are 3 things you can do to ease the blow financially in case something like that happens.

Thinking about losing your job is terrifying, but unfortunately in this day and age, it happens quite often and without warning, and you’re suddenly at home with no income. After 4 job losses in the 13 years that John and I have been together, we’ve become smarter with our lifestyle and have taken steps to ensure that if there was ever another job loss, we’d be prepared. Better to be safe than sorry when it comes to preparing for job loss, and here are 3 steps to get you started in case the worst should happen.

Keep an emergency fund.

John and I follow Dave Ramsey, and while we haven’t had to worry about any debt (besides the house), we follow his Baby Steps to try and keep our finances in order. While you’re paying down debt, Dave recommends keeping at least $1,000 in an emergency fund, and when you’re debt free, he recommends building that up to 3-6 months of your typical monthly expenses to prepare for the worst. Because John and I have been plugging away at our savings, we’re able to live off that for a few months until he finds something.

Keep your pantry stocked.

I’m not talking like hoarder-style stocked, but at least enough that you can look in there and make a few meals out of it. I try to keep a lot of my main staples like rice, pasta, canned vegetables, salsa, and all baking supplies. I also have a lot in my freezer, like frozen chicken breasts, black beans (I cook a whole bag and freeze individually), and an assortment of frozen breakfasts/dinners.

I’m pretty good about keeping my pantry full, and my freezer filled with assorted meal ingredients, so when John told me he was losing his job, I knew we’d be okay on food for awhile until I figured out a game plan. See: How To Eat When You Have No Income.

Create a budget, and make a list of things you could cut out immediately.

If you don’t have a budget in place, you may be in for a world of hurt if you suddenly find yourself with no job. Dave Ramsey has an excellent budget form here. John and I don’t actually have a paper budget, but we know how much our expenses are every month, how much I’m allowed for groceries, and how much we put into savings for everything else (Christmas, birthdays, emergency fund, etc.).

Once that budget is made, take a look and figure out what you might be able to cut out if you lose income. Can you lower the plan on your cell phones? Can you put a stop to eating out for awhile? Actually, you could consider cutting a little of that now and putting that dollar savings into your emergency fund; saving money on your utilities is always a good thing, right? Look into switching phone companies or calling your cable company to lower your plan to see if you miss it.

Now with all that said, I’m not telling you that you can’t ever have fun and need to put every dollar in savings! Living in fear of losing your job every day is no way to live at all, and you need to be able to enjoy yourself. So budget some money for Entertainment and just make sure you’re still faithfully putting money away in savings, too. John and I were going out to eat a couple times a month, I’d go out almost every Sunday afternoon to get coffee and do blog work… you know, the typical fun stuff we should be doing. That’s been put on hold for awhile, except if we have gift cards, but we still knew how to have fun!

These 3 steps should help you be a little more prepared for the unexpected, although I pray that never happens! If you have any other tips, please share in the comments below!

Kaitlynn Marie

Saturday 9th of April 2016

These are all great tips! When I lost my job in 2014 I was lucky to be living with my sister. But then living arrangements changed, and one thing led to another and suddenly I'm homeless. It was not a good time. It did teach me one very valuable lesson though! I'm working on saving and getting out of debt. Though with over $20k in student loans that ain't gonna be easy! But I'm working on it :)

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