Cut Your Spending Immediately Once You Lose a Job
All week we have been sharing advice from The Money Class by Suze Orman. Orman says that anyone who is out of work must understand that slow economic recovery means job growth remain sluggish and that in turn means we could be facing years during which the number of people looking for work will far exceed the number of job openings.
Nearly one-third of the unemployed in late 2011 had been out of work for at least one year. That's likely a lot longer than any severance, and even if your state has expanded the amount of time you can receive unemployment benefits during this slow recover the payments will cover just a fraction of your prior salary.
That makes your emergency fund all the more important. In fact, her advice is that every family that is dealing with a layoff should take measures to make their emergency fund as long as possible.
The goal is to cut your expenses as much as possible, as quickly as possible. Review every expenditure. Spending that you cannot afford when you had a job is not necessarily spending you can still afford.
How much to cut? Stand in the truth of the job market in your area, and your field. If you know it make take time to find a job -- any job -- you must be very aggressive in scaling back your expenses right now.