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How to prepare your finances for unexpected unemployment

No one wants to think about losing their job, but it can be helpful to do so. Not in a negative way, but in a positive way. Think of unemployment as a chance to prepare your finances for the unexpected. Life is anything but predictable, and when it comes to money, it’s better to be proactive rather than reactive. Here are some steps to take to make sure your finances are ready in the unfortunate case that you lose your job.

Build Your Fund

The first key to preparing for unemployment is to make sure your emergency fund is well-stocked. Usually, you want to have at least enough saved to cover three-to-six months of expenses. However, if you feel your job might be in jeopardy, you might want to stock up even more — aim for at least a year of savings.

Pay Down Debt

Debt can be hard to handle no matter what your finances are like. It can be even more difficult if you’re unemployed. Do what you can now to reduce your debt as much as possible. Tackle debt with the highest-interest rate first, then move on down the line. If you have a high-interest credit card, look into a credit transfer card so you can avoid hefty interest payments as you pay down the debt.

Connect with Others

As you get your finances in order, you should also reconnect with your network. As US News suggests, reach out to former coworkers and/or bosses and make sure you are still connected. Not only can they possibly help you find a new job, but they can also give you updates on salaries, information on how their industry is doing, and much more.

Content by Savvy Money

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