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“The most important thing is to understand what you’re going to do beforehand,” she tells CNBC Make It. “That way, when you’re under stress, you don’t have to stress yourself out trying to solve all these things on the fly.”
If you’re worried about your future layoffs, here’s how to start planning now.
Start by getting a clear picture of your expenses while you’re working and earning money. Next, make a list of expenses you could immediately cut if you were able to quit your job, says Lester.
“There are some things, like streaming services, that you’ve probably spent a lot of money on that aren’t too painful to remove,” she says.
It may take some time to find your next job, so make a plan for how you will continue to reduce your expenses over time.
“I have a list of expenses to cut right away, and if I don’t find a job within a month, I’ll dig deeper and make cuts.” [other] It’s an expense,” Lester said.
Preparing this checklist in advance will prevent you from making panic decisions about which expenses to cut. “When you’re under extreme stress, your ability to make good decisions is greatly diminished,” she says.
And remember, you’re not permanently abandoning your subscription or anything else on your list. Think of the checklist as a short-term strategy to help you reduce expenses until you find your next job. Once done, you can create a new budget that takes those expenses into account.
Additionally, try to build up an emergency fund. Ideally, you should have enough cash to cover about three to six months of living expenses.
But if you’re not quite there yet, you’re not alone. According to recent data from Bankrate, nearly 60% of American adults cannot cover a $1,000 emergency expense with their own savings.
That’s why it’s important to know where your money is being spent. Having a clear understanding of your spending habits will help you understand where you can cut costs. You can then reallocate that money to your emergency fund.
Lester says you may find yourself saving money or paying for a subscription you no longer need by bringing your lunch to work instead of ordering it at a restaurant.
“There are many ways to start saving without feeling deprived,” she says.
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