I just got off the phone with a friend of mine who lost his job today. Unfortunately, I’ve had several of these calls in the last few months. The recession is hitting very close to home for me.
There are personal and financial ramifications of losing one’s job. Here are a few thoughts that might be helpful:
1. Don’t take it personal. Get the pity party over. Realize that things are not going to work out quite like you expected them to, but it’s going to be O.K. For men, our identity is really tied up in what we do for a living. It’s a matter of pride for us. It’s the reason we get up every morning – to provide for our families.
2. Take a few days to think it through. Ask yourself, “What do I really want to be when I grow up?” If it’s not what you were doing before, look at employment options, write them down, and execute.
3. Check the budget. A buddy of mine told me once, “If I make $2,000 in a month or $20,000 in a month, I still manage to spend it all”. That’s true. At first we look at our spending and think, “How can I possibly make this work?” I’ve been through fluctuations in income and it’s not easy to adjust but things seem to work out when we really evaluate the difference between a want versus a need.
4. Check the balance sheet. Ideally we have a few months of living expenses in cash stashed away. It’s not the best time to sell assets in taxable accounts to fund living expenses, but in some cases it might be a viable option. If you’re going to sell assets in a taxable account, be cognizant of tax consequences. Offset gains and losses to the best extent possible. If you’ve got to use debt, don’t use it frivolously. D0n’t touch your retirement accounts (401ks, IRAs, IRA Rollovers etc.) if you can help it. In fact, take this opportunity to make sure they are properly organized and allocated to benefit from the market recovery when it happens. If you’ve got a few 401ks floating around, consolidate them in an IRA Rollover. You have a lot more options and flexibility that way. That will have the biggest impact on your future wealth.
Some of the “worst” things (or so I thought at the time) that have happened to me in my career have turned out to be the biggest blessings in the long run. Some of those experiences that were bitterly disappointing for me opened the doors for new opportunities which I would have never dreamed possible. Nothing ever works out exactly like we plan it to. We’re just not in control of as many aspects of our lives as we would like to think we are. But that’s O.K. It does work out.