Wealth management

24 June 2022

Planning financially for job loss

Losing a job is always a difficult experience. Nothing can quite prepare you for the disappointment (and embarrassment) that comes with being laid off. Nevertheless, while you cannot fully brace for it, there are some steps you can take to ensure that a job loss does not cause too much of a financial disruption or lead to a prolonged period of unemployment.

Due to uncertainty in the job market as a result of the COVID-19 pandemic, you should consider building an emergency fund as your first defence against a job loss or unemployment. With that out of the way, let’s discuss some other steps that one can take to prepare for a job loss.

The first step is to update your knowledge on all types of financial compensation available to laid off staff. You can do this by reading up on the relevant labour laws as well as the company’s own regulations. Also, some financial products and investments come with insurance that is triggered in the event you lose your job. With this knowledge you can request the appropriate compensation be paid to you to help lessen the financial impact of the job loss.

Your next step is to reach out to contacts you have made in your industry to let them know that you are currently on the job market. This will keep you on their minds when they are looking to fill roles at their firms.

As part of the wider job search, you should update your CV or resume as well as your professional social network profiles. LinkedIn has a feature which allows you to let potential employers know that you are available for hire. You should make use of that feature. Also use informal networks such as school mates, social clubs and religious organizations as a way of finding another job.

Building an alternative source of income is also necessary. For instance, general economic conditions could prevent firms from hiring people full-time but they might be willing to outsource some processes to freelancers. You can try freelancing websites such as Upwork and Toptal to take advantage of these opportunities.

Finally, try to develop positive relationships to serve as a support system. Unemployment can be a mentally and financially draining experience. Having people that will help you through it will be essential.

Thank you for reading.