What if I get laid off?

Christmas is literally just around the corner and the market delivered more bad news today.  In November a record 533,000 people lost their jobs and 1 in 10 families is behind on their mortgage.  That doesn’t paint a very pretty picture of the economy or encourage must optimism in market forces.  Instead, many people are wondering if they could be next.  The best way to survive this economic crisis is to make a plan.

In several of the previous columns I mentioned the importance of budgeting, whether you are budgeting to ensure you have enough money to pay the bills, shop for Christmas, or save for retirement, budgeting is key.  In this market, you also need to be budgeting for the rainy day possibility that you may become one of the thousands losing their jobs.

In the past when times got tough, Americans got plastic.  Now, however, credit cards are increasing their fees and interest rates and reducing their credit limits because they are afraid of not being able to last this crisis either.  Like it or not, Americans now need to prioritize their needs, learn how to budget, and start saving, which means eliminating the plastic unless you can afford to pay the entire bill when it comes due.

By prioritizing what you need from what you want, you may find that you can live without a few little comforts and use the money you would have spent on that to pay down your credit cards or save just in case the unthinkable happens and you do get laid off.  The government can’t save everyone.