Planning and Forecasting: What If I Lose My Job?

The process of planning and forecasting the future can seem very difficult at times. During uncertain times, you really never know if your job is safe. Properly planning can help you avoid financial problems, even if you lose your job. Here are a few tips on planning for the future and a possible lost job.

Job Security

Everyone wants to believe that their job is safe. However, there is no way to know for sure that it is. Anyone of us could lose our job at any moment. Therefore, it is necessary to plan ahead for the worst-case scenario. Although we never want to consider the possibility that we could lose our job, we need to make the necessary arrangements to protect ourselves and our families if it happens.

Safety Fund

One of the most important steps to take in this process is starting a safety fund. A safety fund is an amount of money that we keep stored away in case of an emergency. If we lose our job, we know that we will be taken care of until we can find another job. Most experts recommend that you keep at least 3 to 6 months worth of expenses on hand. Therefore, you need to calculate how much you spend in a given month, then multiply that number by 3 to get the minimum amount of money that you want in your safety fund. Make it your priority to save this amount of money for the future.

Starting a Safety Fund

One of the most common options is to simply open a savings account at your local bank. Another option you can use is signing up for a savings account with an online bank. Many times, online banks will have a higher rate of return for the account.

Another option that you can utilize is opening a money market account. A money market account is an account that is held with an investment brokerage firm. It is similar to a checking account, except that you earn a higher return of interest.

Regardless of where you start a safety fund, you need to make sure that it is safe. This is not money that you want to invest in the stock market. Getting an FDIC insured account will make sure that your money is there, regardless of what happens. Since the purpose of the safety fund is to make you feel safe during uncertain times, you need to make sure that your money is safe in the meantime.

Automatic Savings

The process of starting a safety fund is made easier by using an automatic savings plan. Set up an automatic transfer from your main bank account into the safety fund that takes place on a regular basis. For example, you could set it up to deduct $50 from your main bank account and transfer to the safety fund every week. Making the process automatic eliminates any emotion and ensures that your fund will be built quickly.

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