If you are facing a layoff, you need to go through your budget with a fine-tooth comb. Know where your money is going and think about whether you really need something.
Focus your efforts on things that can both cut expenses as well as bring in more money. Sometimes you aren’t going to save a whole lot on an individual bill, but the exercise of cutting your bills puts you in a mindset of reducing your expenses.
If you’re thinking you may be laid off, think about what you can cut in your budget, but more importantly, think about what you will do. Having a plan that will kick into action will prevent you from panicking.
If you are laid off, it’s tempting to take a check from your employer for your 401(k), but this will cause you not only to pay income taxes on the amount, but also a 10% penalty.
When you’re laid off, health insurance is another issue that needs to be addressed. You may be able to buy the same type of insurance your employer offered through somethign called COBRA. This allows you to keep your insurance by paying the entire amount of the plan. If you’re healthy, this typically is more expensive than buying insurance on your own.
If you’re married, you may be able to switch your insurance to your spouse’s employer’s plan, as loss of insurance may be considered an event that allows you to sign up for insurance in the middle of the year with the employed spouse’s employer.
Finally, think about bringing in more money. You may have extra stuff around the house that you can sell. This is also a time when you can sit down and think about what you really want to do. There is opportunity out there for people to sell services that help people save money.
Here’s an article I wrote on how to sell books on Amazon for a profit.
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