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In these tough financial times, people who would generally not have to fear job loss are waking up each day wondering, am I next? This includes teachers, firefighters, police officers, government workers, in addition to anyone who works for a for-profit private company.

I like to read about Stoicism, and one of the main tenets of the Stoic philosophy is regular visualization of bad things that could happen in your life. If you love your wife, you should imagine how it would feel if she were to die, or to lose her. If you have a nice home, you should imagine it burning down.

This is because the negative visualization prepares you for the worst, and helps you appreciate what it is you do have. Rather than obsessing about the things you desire in life, reflect on what you do have, and how you would feel if you lost it.

Your job (and job loss) should be no different.

With that in mind, it can only help you to put a job loss emergency plan down on paper. This will allow us not only to appreciate our current job (or employment), but will prepare us for the likelihood that we won’t be working there forever, and that our departure may be sudden.

How To Get Started

If you are a two-income household, you might start with devising an action plan if the primary breadwinner experiences job loss. Once that is in place, you can modify it to suit a scenario if the person who makes less were to lose their job. I’m not sure how adequately we could plan for a two-jobs-lost-at-once scenario, other than it would probably involve moving back in with parents and begging.

So before we get too far ahead, let’s brainstorm some actions we would consider taking if we experienced a sudden job loss and a significant loss of income. Just write down everything that could be an option to create new income or free up current spending. We will worry about their efficacy and value when we go to plug them into our plans.

Here are some job loss prevention ideas to get you started…



  • Cancel unneeded subscriptions (magazines, wine of the month, gym, cable, home phone)
  • Cancel childcare
  • Cancel planned vacations or purchases you’ve been saving for
  • Sell items on Craigslist, eBay, or have a yard sale
  • Sell an unneeded vehicle
  • Downgrade vehicle insurance
  • Move children to public school
  • Rent a spare room out if you have one
  • Sell your house
  • Donate plasma or “other” fluids
  • Max out credit cards (if you need to eat, this should be an option)
  • Radically downsize grocery budget
  • Sell stocks, precious metals and other equities (might want to wait on this)
  • Tap your 401k or retirement (it’s an emergency, remember)

What you will notice from the above list is that, for the most part, these are tough, emotional choices. Things like selling homes, moving your kids to a new school, or tapping your retirement savings. This goes to show how serious a situation you are facing, and how important it is to prepare in advance for job loss.

Now that you have a solid list of money savers in case of job loss, it’s time to divide them into multiple groups: things to do immediately, and things to do one, two or six months down the road if unemployment persists. The reason for doing this is to prevent you from panicking and doing everything at once. Child care, for example, might be something you want to preserve for a month or two if you plan to look for a new job.

Also, selling one of your vehicles might be something you shouldn’t be in a huge hurry to do.

What to Do Before Job Loss

Now before we finish, let’s take a look at some things we can do BEFORE we find ourselves facing a job loss. Some of these will be easier than others, but I think you will find them to be valuable.

  • Make a Job Loss Emergency Plan (like this one)
  • Save $1000 (at least) in an emergency fund
  • If you are debt free, beef up your emergency fund to 6-12 months living expenses
  • Calculate how much it would cost to get by on one income
  • Update your resume
  • Make a list of key contacts who can help you find a new job

Some of you may not think it is healthy to visualize being fired, but for some, it is impossible not to think about. If you are like me and refuse to sell your soul for your job, you run the risk of appearing less attractive than someone who is willing to do so. If you work in an industry known for volatility, maybe a sector hit hard by the economic downturn, it would serve you well to have something to refer back to when you aren’t thinking clearly, to let you know how to proceed.

A Job Loss Emergency Plan is a great way to keep you sane, focused, and help you have a clear mind to take only the important actions that are needed to make things right again.

Do you have a job loss emergency plan?


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