Armchair Millionaire Community Bulletin: Surviving the Pink Slip

New York, New York (PRWEB) August 23, 2005

According to the Bureau of Labor Statistics, people who lose their jobs remain unemployed for an average of 16.5 weeks--about four months--before finding new work. The possibility of going without an income for that long is certainly enough to make anyone sit up and take notice.

We recently asked members of the Armchair Millionaire community about how they are preparing for the possibility of job loss. Here is a little of what we heard:

"I work for a blue chip company who has never laid anyone off, but that does not mean it will not happen. I prepare for worse case anyway by living below my means, saving 25 percent for 401(k) and generally being pretty frugal. If I lost my job tomorrow, I would be fine financially and also emotionally."

--Mom2Two

"I work at a medical device / pharmaceutical company that just laid off 700 people. I was one of the fortunate individuals who survived this latest round. However, I believe that there will be more cuts starting early next year. As a result, I have started saving more money, cutting all unnecessary expenditures, and polishing up my resume. In addition, I am taking on other roles at work to get additional experience (in case I need to prove my worth at my company or show I'm a good candidate for somewhere else)."

--Disillusioned

Anticipating when you might be laid off and being prepared will go far toward making the actual job loss easier. You'll want to have an emergency fund on hand, start to explore other job possibilities, and get in touch people in your professional network who might be able to suggest leads. But if you do end up with walking papers, my checklist will help you cope with the aftermath.

The Armchair Millionaire's Checklist to Surviving a Job Loss

Make the most of your severance package. Assuming you're lucky enough to have one, negotiate for the best severance package possible. At the same time, don't burn any bridges with the people who may be writing letters of recommendation for you on your job hunt.

File for unemployment benefits. Find out if you qualify for unemployment compensation and, if you are, file immediately to receive your benefits. The U.S. Department of Labor's Web site (http://www.dol.gov) has information and links to each state’s unemployment office Web site.

Keep up your health insurance. You should be able to continue your coverage on your former employer’s plan for 18 months through COBRA (though you'll have to pay the full cost of premiums). You may find it’s cheaper to switch to an individual, high-deductible plan. Alternately, you might be able to be covered under your spouse's plan.

Put yourself on a budget. Hopefully, you'll have an emergency fund that you can tap. Create a budget that cuts your unnecessary expenses to the bone in order to make that money stretch as far as possible. At the same time, try to avoid accumulating additional credit card debt.

Stay away from that retirement plan. If you have money accumulated in a 401(k) or similar retirement plan, you may be sorely tempted to cash it out and live off the proceeds during your job hunt. But remember: That is a long-term investment for a long-term goal, and your job loss is only short-term. Instead of cashing out, roll over the money to an IRA.

Update your skills. This can be an ideal time to take a class or two to update your skills and training in your field. Potential employers will be impressed, and you could set yourself up to get a better position.

THE BOTTOM LINE: Losing your job can be one of life's most stressful experiences. By being prepared and taking the right steps, you’ll not just survive unemployment, you’ll be able to transition smoothly into your next job.

THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: Do you have a home equity loan? Log on to http://www.armchairmillionaire.com and let us know.

Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at http://www.armchairmillionaire.com.

CONTACT INFORMATION:

Lewis Schiff

Armchair Millionaire

877-833-2823

http://www.armchairmillionaire.com

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