In a straightforward manner, I would say you are not safe in your job. You better prepare for the rainy days to avoid panic. Planning for a layoff will spare you from making unintelligent decisions such as a maxed credit card. Here is my suggested game plan for a possible layoff.
1. Be aware of your severance package. Find out what to expect should circumstances go beyond your control. Understand your company’s policy on employment termination. Study your employee handbook and clarify issues with your HR department.
2. Learn to gradually curb your spending. As soon as your monthly income starts to go down, find time to figure out which expenses need to be curbed. Instead of going to the gym, take a few kilometers of walk in the morning. Do your lawn in the weekends instead of hiring a lawn service. Stop your newspaper subscription since you can access the news from the TV or internet. Add to your emergency fund whatever savings you can derive from curbing these expenses. Make sure that your emergency fund has at least three-month’s salary in it.
3. Know your medical insurance options. Determine how long your employer will cover you with medical insurance. Know your options in case the insurance runs out. Some of your options are as follows:
- Your spouse may add you into his or her own medical insurance plan;
- Continue with your present coverage under the COBRA coverage rules;
- Enroll in a new program under your state’s Affordable Health Care Act.
4. Never treat your termination as a break. A long layoff may lead to depression. Be active in job search. Develop your skills to increase your chances for a new job. While you are still in your company, begin building your own network of professional contacts. Keep your resume updated. You may want to get active with LinkedIn. Get involved with activities that provide you with a fall back such as baking cupcakes, tutoring your neighbor’s kids, and volunteering in a community outreach.