08 Mar 2008 12:27:47 | Leslie Linfield
The recommendations for military base closings have been
released and the news is not good. If the recommendations are
accepted, you will lose your job. So what do you do? Hope for
the best, and prepare for the worst.
There is a benefit to this situation. Unlike many individuals
who suffer the loss of employment, you have advance warning.
This is an opportunity to prepare yourself and your family. Use
this time to create a financial plan.
The importance of a budget can not be stressed enough. A budget
is a tool that helps you track your income and expenses, giving
you a snapshot of your overall financial picture. Know where
your money goes. Identify areas where you can cut back. Knowing
your financial obligations will be critical while planning for
the loss of income.
The next piece of the planning puzzle is net worth. Your net
worth is what you would have leftover if you sold all of your
assets (what you own) and used them to pay off your liabilities
(what you owe). This will require sitting down and making a list
of those assets and liabilities. This may sound like an
overwhelming project, but it is important that you know exactly
where you are financially. Knowing your net worth is essential
for planning for an emergency such as unemployment.
Ideally you will have a rainy fund that will cover six months
of living expenses. If not, don’t panic. Start putting a portion
of your paycheck aside each month. Putting away a little money
now will provide a financial cushion if you don’t find a new job
right away.
The last piece of advice is start paying down your credit card
debt. Getting rid of credit card payments will help your
emergency fund go farther. It will also save you money on
interest, money that you can add to that fund.
You will find forms on this website to help you complete a
budget and net worth analysis as well as set financial goals,
such as setting up an emergency fund.
It is never easy to find out you are losing a job. But you do
have an advantage over the worker who gets a pink slip on Monday
and watches the factory get boarded up on Friday. You have time.
Use this time to get control of your finances so that you will
be prepared. And in the event that your base is spared, you will
have significantly improved your financial picture.
About Author :
Leslie Linfield is a national expert on adult financial literacy
education and the consumer credit counseling industry. She has
advised governmental, educational and non-profit organizations
alike, and she has been quoted by the New York Times and Wall
Street Journal as an expert on budgeting and consumer credit.
She has also presented literally hundreds of seminars and
lectures on personal financial management.
