You will laugh, but the idea of this post comes from my 30 months little boy. He was watching one of his favourite cartoons, Caillou, when I had this flash. In this episode, Caillou and his friends at pre-school were doing a fire drilling with the firemen. Then I thought: “We are making our kids practice in case of an emergency, why don’t we do the same thing as adults?”. Therefore, I decided to write this post on how to prepare you in a case of a finance emergency.
#1: You smell smoke or that something is burning / The market is slowing down and your company is not doing so well.
– Evaluate your situation: How much do you need to live per month? Are they any important expenses coming in the next months? Are you expecting to receive money from another source in a near future? Do you have savings? Do you know people in your work related field? Is your resume up-to-date?
#2: The fire has been confirmed, you now have to evacuate / You just lost your job and your last pay cheque is in the mail.
– Evaluate your options: Is there anywhere in your budget that you can cut temporarily? (entertainment, restaurants, cable, renovation projects, etc.), Can you dip in your savings to compensate the loss of income? Do you have credit facilities that can be used? Can your network help you getting another job? Can you re-mortgage your property or sell assets? Can you go back to school in order to get a better job after?
#3: You are on your way out, reaching the meeting point / You are now jobless, applying for another one.
– Prepare a plan of action: As it is the case for a fire drilling, you need to plan your escape route way before the emergency arises. Establish a list of potential contact or companies you would like to work for. Determine how many letters and resumes you will need to send and how many follow-up you will do on a daily basis. Write down your objective in term of work environment, job description and salary.
#4: You are finally at the meeting point and everybody is safe, now it’s time to go back and review your evacuating process / You now have a new job and it is now time to restructure your plan and financial situation.
– Evaluate and review your plan: As your financial situation evolves over time, your plan needs to be redesign from time to time. By reviewing your plan, you can identify its flaws and bring the necessary modifications. You also need to assess the financial impacts of it on your situation. As it is the case for a fire, you might be saved but that also includes that you had to leave stuff to be burnt behind.
I think the key point is to determine what you can or cannot do if you ever lose your job. Having a plan prior to living this unfortunate event will help you being more proactive and react quickly in order to avoid any severe damage to your financial situation.
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