Get your Financial House in Order

If you’re concerned about being laid off soon, the first step is to get your financial house in impeccable order in case you find your income disappearing. You’ll want to have a clear picture of your financial situation — where your money is coming from and where it is going.

Here are steps to take.

• Stop unnecessary spending and purchases. Eliminate everything that’s not necessary. A few obvious cuts: coffee breaks, cigarettes, sodas, eating at restaurants or grabbing fast-food on the way home, movie nights out, weekend driving trips, and so on.
• Explore what you spend on essentials and nonessentials in the Wants Versus Needs Worksheet
• Review your spending to identify additional spending leaks. The Plug Spending Leaks Worksheet can help.
• Examine the debt you owe so you know where you stand financially. Review credit-card balances, car loans, student loans, and any other debt you currently have.
• Start building an emergency fund. Take the money you would have spent on unnecessary items and funnel it into an emergency fund. Your goal: to save enough to live on for at least six months. Why? Because it can take six to eight months to find a job that replaces your current income. The Emergency Fund Worksheet can help.
• Create a solid spending plan (also known as a budget) based on your financial situation today, as well as if you lose your job and steady income.