Someone asked me this recently. This is what I would advise my clients or anyone who come to me with this concern.
First of all, there is no such thing as job security. You can get laid off anytime. Companies always make business decisions like this that you have no control over.
I’d say focus on what you can control.
Have a strong financial foundation and a strong financial plan to ride through whatever life throws at you.
Be it the market crash or being laid off, you won’t be afraid of them.
What does having a strong foundation mean?
It means you have a strong budget, enough emergency fund, a strong financial portfolio and a strong financial plan for different situations that happen in your life.
What consists of a strong budget?
It means you are always on positive cash flow and you have a handle of your month-to-month expenses and don’t carry any debt like credit cards and personal loans, among other debts except for a mortgage.
How much is enough money to put aside in your emergency fund?
My answer to this is quite unconventional.
I would ask you, how confident are you in your skills that you will get a job and how long will it take you to get another job?
If you say it will only take you a month and if you’re comfortable with having one or two months' worth of living expenses at a MINIMUM in your savings account, then I’d say that’s your answer.
Why is that?
I think savings is not the best place to park your money if your intention is for growth. Having a lot of money in savings is good if you are currently saving for a house or something big in the near future. But in terms of growth, you’re better off figuring out other places to invest your money on.
Part of having a strong financial plan is also having strong retirement models based on different scenarios.
Before I quit my corporate job, I made sure that it didn’t affect my retirement plan drastically. That gave me the confidence to take the leap while I continue to grow my business. I also help my clients build different retirement models based on their goals and how they envision their retirement to be.
Bottom line is, don’t be afraid of uncontrollable events like being laid off.
Take control of your finances and you won’t be. This concept applies to the fear of the market crash as well.
What common fears do you have regarding being laid off? I’ll be glad to give some tips if you have any questions in the comments below.👇