This is targeted toward the American worker... as I know not about our friends across the waters...

Before you hear the rumblings of an impending layoff... Before you spy the harbinger of the tissue boxes in all the conference rooms you can't schedule because they're booked all day long by HR...


What can you do before the man yanks the rug out from under you? AKA KNOW YOUR BUDGET!

In this recession, you've got to be prepared financially for the possibility of being laid off and not finding work as soon as you would like. Of course it's always best to be in good shape before the practically inevitable happens, however it is even more important now. According to figures for September 2002, the average duration of unemployement was 17.8 weeks (TEUC- Temporary Extended Unemployment Compensation typically provides for an additional 13 weeks after the regular state unemployment funds have been exhausted.) Current estimates show that even with the extended unemployment benefits, one million workers have exhausted both their state and TEUC unemployment benefits and are still without work.

First and foremost, know your baseline budget. How much would it actually take to live once you got rid of all the non-necessities? Could you get rid of cable !? Your mobile? Your land line? What could you live without? Know it now, and know what's worth giving up for the long haul.

Now, given your baseline budget, figure out how long you can last, how many months. Scary, isn't it? Unemployment is a joke. It is much less than you think it is (if you didn't know). Just check and see how much it is for your state at your income bracket. For example, in the state of Kansas, where I live, my salary provided me with the max amount of unemployment income, amounting to a whopping $1200 a month. This was less than I typically paid in taxes for cryin' out loud. I was unemployed for ten months last year, having been laid off from General Electric where I was a Product Manager, so I have some idea of how to make things ssstttttreeeeeeeeecccccchhhhhhh.

Under normal circumstances, I would say have three months in the bank. This, in conjunction with your unemployment insurance should make you relatively comfortable. These days, I'd recommend at least five or six, just because of the amount of time it is taking people to find jobs in the current climate. Next, get those funds in some decent CDs or something that you can liquidate fast if you need to, but still gets you some frosting of interest. Don't look at them. Don't covet them. Don't even breathe on them. Act like they don't exist.

Figure out how much you're paying in interest and see if there is any way to reduce these payments. Say you've got that Discover card you've had since college with a couple grand on it. Maybe now you're established enough to get offers of 0% interest for six months or a low introductory rate. Transfer your balance!! Even a little savings a month is better than nothing when you're cutting interest payments. It's money you don't need to give the man. Keep those balances bouncing from special rate to special rate and kill old cards you don't want. Just don't let your balances get to more than 80% of your limit or your credit will get screwed.

If you own a home and you haven't refinanced at these low rates, check out home equity lines of credit or mortgages with adjustable rates. Interest only loans are also big winners while these rates are so low. Lines of credit won't cost you anything much in closing costs and with them you can pay off your existing mortgage and then some, and are great for getting rid of credit card debt and making that interest deductible. I just took out a line of credit on my house, paid off my mortgage, car loan and credit cards, and I'll be saving $500 a month in interest. All with no closing costs (watch out for them telling you there are no closing costs and then rolling them into your financing) and a floor rate of 4.49%. W00t! Plus, it's an interest only loan, which means that my payment is only the interest payment. Naturally I'll be paying as much as I was before for all those items to pay back the equity in my house, but should the nasty spectre of unemployment darken my door once again, I'll be much relieved to know that worst-case scenario, my biggest bills are only $450 a month.

What you can do when the man yanks the rug out from under you?

  • Smile sweetly and ask 'What's my package (if any) and when do I have to have my forms signed?' Most companies will offer you a package of paid salary and benefits for certain terms, *if* you sign their nasty little forms. Take said package information and your company handbook and before you sign anything, have a lawyer review them. So what if it costs $60 bucks, make sure there are no loopholes. When I was laid off from GE, there was a clause not included in the documentation that allowed them to hold on to my pension and 401k for a year, basically in exchange for my keeping my benefits going during that time. A decent trade-off, but still something that I should have read in the handbook as I was suprised by it later.
  • File for Unemployment immediately. Do not pass go, do not collect $200. Get online and sign up if your state has it, or call right away. Many people don't know that they are eligible for unemployment even though they are receiving a separation package. Don't wait until your severance pay runs out, especially because you may find a job, and all that time you could have been douple-dipping!
  • Even if you hate everyone you work with, do not flip everyone off as you walk out the door. Most people have a significant amount of social interraction at their job, and it is an important part of the 'normalcy' in your life. Make sure that you get contact info, set up a time to have lunch with friends before you leave, etc. It is very good to keep these lines of communication open because often times this is a good way for you to network yourself into another job elsewhere.
  • Be aware that you may be escorted out by security and handed your personal effects in a box. This is the most extreme example. Many places just let you clean up your things and get what you need off your computer for your portfolio.
  • Ask your boss in the eye if you can use him/her as a reference. Read the answer in those eyes rather than what they say. Also make sure that anyone else you would like to have as a reference is contacted shortly after you leave with one of those 'I've enjoyed working with you' notes...
  • Walk out the door, knowing that as one door closes, another opens.

    I have been on both sides of the table. Just last year I had to lay off two of my direct reports on December 20th. I had nothing to say in the matter and it was thoroughly gut-wrenching. I can tell you that whoever is doing the deed takes no distinct pleasure in it, unless they are heartless automotons of doom. Oh yea, well, if you're in Corporate America then your friendly HR representative will most likely be in there, so you can feel safe knowing that they probably do take some measure of joy in the act. Otherwise they wouldn't be in HR. The main point is that your boss, most likely, did not pick you. Your boss' boss did. If anything, they simply said, 'No, loosing this person is not something that I can't live without.' The deal is, like any traumatizing event, you'll likely go through all the stages. The main thing to understand is that it happens to millions of people every year and you're not alone. Yes, you'll feel betrayed, angry, panicked, relieved and numb, sometimes in a manner of minutes. You'll feel a whole hell of a lot better if you're prepared financially, however. (See previous section and do it!)

    What can you do after the man yanks the rug out from under you? AKA GET ON WITH YOUR LIFE!

    If you work at a large enough corporation, they will most likely offer you some career placement assistance or one of those lay-off farm offices where you go during the day to pretend that your new job is finding a job after you take their personality quiz and they tell you that you should pursue a career as an art therapist. These are useful for sending out paper resumes (ick) and the like. For you more 'technically inclined' folk, naturally I would suggest you tickle the Monster and every other kind of resume posting site out there. If you don't already have one, get your resume and bio up on your own site to refer people to. Go to job fairs, call up old friends and tell them you've gotten the boot, do some work under the table. The main thing is to get out of the house and don't get bogged down. Naturally, one is supremely susceptible to depression and isolation at this point in their life, so don't neglect your mental health or social life. Your friends will understand that you can't buy everyone a round like you used to...

    The main idea is to be patient with yourself, flexible and accepting. Try not to get too wrapped up in what you can't change. Know that you probably will. Remember that regardless, this is most likely all for the best and that you don't know all the answers or the big picture right now. Heck, I could find no logical reason for me to be unemployed for so long, but in the end I had a deeper relationship with my kids, a far more rewarding position (if not more $$) and I got to go backpacking in Europe like I had wanted to do for years. I despised my job at GE where the old boy's network was so thick that on any given day my exact words would be repeated by some other male in the room and be touted as an epiphany after being ignored when espoused by me minutes earlier. I was looking at a future of having to learn to play golf and loving my golden handcuffs. Now I work in a teeny-tiny little company with people who are terrific. I actually make a difference, which is refreshing. So, if you're laid-off, don't give up yet.

    This too, shall pass.

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