Dealing with job loss
Money management tips for coping with a pink slip.
Perhaps you find a notice left on your desk, you are called into the office with your supervisor, or you are among a group of people informed during a town hall meeting that your jobs have been eliminated.
Many things immediately race through the mind of a person who has just lost their job. "My first thought was, 'Oh, my mortgage,' " says Kim Covert, an Ottawa journalist who was part of widespread job cuts implemented by newspaper operator Postmedia Network Inc. this year.
Covert, who's in her forties, says she's always been bothered by debt, and the mortgage on the house she purchased about a year prior to her layoff was already weighing on her mind while she had a job. Being laid off just worsened those anxieties.
A job loss of this sort is out of your control. But while powers beyond your grasp have created this scenario, there are things you can control.
Where will the money come from?
Adrian Mastracci, president and financial adviser at KCM Wealth Management in Vancouver, B.C., says a person who is laid off should be prepared to go three to six months without a paycheque.
Ideally, one would have some money set aside for such an event or be fortunate enough to have landed a generous severance package.
"If there is no severance pay, maybe you have to borrow from family," says Mastracci. "You may still have a line of credit or a lending institution may be willing to grant you [a loan]."
Applying for employment insurance sooner rather than later is good idea, says Mastracci, though he notes the amount of severance pay one gets will push back the date of eligibility for payments.
Cutting back expenses
Someone who's lost their main source of income should take a hard look at where their money has been going and cut back.
"Do a quick and easy look at what you're spending and then say to yourself, 'Well, do I need to go and spend money on restaurants and entertainment five days a week? Maybe I can cut it back to one day a week,' " says Mastracci.
"Once you see the big picture, some of the numbers start jumping at you and some of the numbers will say, 'Well, maybe here's a place where you can start cutting.' "
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