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Never Rely on your employer for your standard of living
Receiving any type of severance is a luxury these days, but when she puts it into that context, it does seem bizarre how little most people are compensated when they are let go from their jobs.
However, we shouldn’t ever be surprised by this.
That’s how it is.
Employers are good to you until they aren’t. It’s mainly about the bottom line for your average employer.
Stop Financially Relying On Your Employer
Never, I repeat, never place your financial and healthcare needs in the hands of an employer.
Always have multiple income streams.
You are an at-will employee when you work for someone else.
If you desire financial stability, that will never come from putting your financial needs into someone else’s hands; you must create income streams entirely within your realm of control.
Though I could empathize with my colleague, I also wanted them to understand why getting laid off should never be a big deal or a financial worry.
Maintain A Hefty Emergency Fund
They have about three months of cash available on hand until they run out of money.
Ideally, 6–12 months of funds in an emergency account creates a more reliable safety net.
Though three months is better than nothing, it’s frequently not enough. Your typical job search can take anywhere from 1–6 months – depending on your skillsets.
For some people, the job search can extend to a whole year.
What A 6–12 Month Emergency Fund Offers
Having six to twelve months of expenses stacked away gives you much more flexibility in choosing your next career path.
You can apply to jobs if you desire to stay in your chosen career, but you can also spend time creating other passive income sources to make you more financially independent.
What Happens When You Run Out Of Money After A Layoff
My colleague is kind of in a bind.
If they don’t find a job soon, they will be in a compromising financial position.
Many people max out credit cards, take out personal loans, or settle for quick, low-pay work.
Sometimes you simply do what you got to do, but wouldn’t it be so much nicer if you didn’t have to go into debt or take a lower-paying job every time you were laid off?
Want to read more on the basics of managing money? Check out this list of curated articles.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.