6 Ways to Save for an Unexpected Job Loss
Larry Buhl | Monster
Coinciding with the tightening job market is a gloomy statistic: Few American workers are saving for potential layoffs. According to an Adecco USA Workplace Insights survey, only one-quarter of workers claimed to be saving for unemployment, and 58 percent had no plans to put money aside for a job loss.
You’ve probably heard that you should have at least six months of living expenses on hand. But how can you save for a rainy day when it’s already drizzling? If you’re fully employed and you’ve been living paycheck-to-paycheck, you might not be looking for savings everywhere you can, according to Dayana Yochim, consumer finance expert at The Motley Fool. Yochim recommended six ways to begin starting that emergency fund today, no matter what your salary.
Sweat the Big Stuff First
Before you start pinching pennies, look at the largest budget expenditures, such as car and vacations. “You can cut your car insurance significantly by raising the deductible,” Yochim says. You can also downgrade your car. Even if you’re upside-down on payments, trading in the new luxury car for a beater would put hundreds of dollars in your pocket per month, Yochim says. Likewise, if you must travel, look at ways to creatively downsize the trip: Do a house swap or stay at a bed and breakfast, for example.
Ditch the Plastic
“Cash hurts, and you’re less likely to be conscientious if you’re always using plastic,” Yochim says. Likewise, if you’re really strapped, use your credit card to make essential purchases only as a last resort. Yochim recommends making one withdrawal on Monday and spending no more than that all week.