How To Layoff-Proof Your Finances

Written By Mary Beth Eastman
Last updated June 14, 2018

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Personal Finance
June 14, 2018

Simple. Thrifty. Living.

These are truly uncertain times across many avenues in the nation. From political upheaval to an unsteady job market, there are many people worried about employment security and economic downturns. With this in mind, it is imperative to “layoff-proof” your finances to ensure stability for what lies ahead. This includes reducing your existing debt, along with building a fund for unforeseen circumstances and emergencies. With more job loss than ever before, you must be able to protect yourself and your loved ones across the board.

Building an emergency fund is essential for families or singles. In fact, this is a form of recession and layoff-proof savings, which does not have to be hard to implement. In the event of job loss or natural disasters, you must have a steady flow of income to maintain living expenses and necessities. Similarly, you need ready cash for any medical emergencies, as well as “cash on the barrel” payments without using credit or debit cards. With this in mind, here are some ways you and yours can build a sound, emergency fund:

  • It’s as simple as putting away 50 cents on every dollar you make. For example: you can put away a dollar for every two dollars earned. Make sure that this money is not touched for unnecessary expenses or entertainment. This should strictly be for emergencies and issues of that nature.
  • Limit your monthly spending on eating out and entertainment. Create a well-balanced budget that takes into account how much you earn, as well as how much you owe. The money left over is what you have to survive on. However, you can easily generate more income by reducing unnecessary expenses.
  • Pay off any existing debt at once; credit card, car payments, mortgage, etc. Most companies are willing to work out flexible repayment plans that should not keep you out of pocket. The main goal is to pay off principal and not waste money on finance charges or interest fees.
  • Only use the money in your savings account if absolutely necessary. Try using and replacing money in and out of your checking account. Again, allocate certain funds for your emergency account every month. This includes any money you make above and beyond your work salary; CDs, stocks, bonds, real-estate investments, etc.

It can be difficult saving for rainy days with existing debt. With this in mind, always pay off the smallest balances first with credit cards. This makes it more manageable and leaves you with enough money to store away. Similarly, allocate enough money for bills and expenses, but do not use credit cards while you are paying them off.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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