Canadian Finance Blog

Avoiding Financial Disaster – New Work, No Debt

Posted: 27 Oct 2010 02:00 AM PDT

Sometimes it is easy to forget just how fragile your work environment can be. I work for a huge, massive company. It is a good company to work for, as I get benefits, a pension, and am treated fairly and with respect. However, I sometimes forget that I am just one person, in a small division, who is essential just a number in a giant spreadsheet somewhere. If my division becomes unprofitable, my number may be erased. Every once in awhile I will hear rumours of when my job might come to an end. I get a few butterflies in my stomach, remind myself that this event is unlikely to happen (at least for 2 years), and try to calm down. I do take the opportunity to go over my “battle plan” should the worst ever happen. Here’s the top three things that I am constantly thinking about.

Financial Priorities

First and foremost, if my income were to suddenly drop in half (or less), what expenses could I cut? This thought often brings into mind my list of financial priorities. Netflix? It’s awesome, but it can go. Vacations or trips, coffee or alcohol, they all are the first things to go. But if things get really tough, what goes first? Cable TV? Internet? Cell phone? Grocery budget? This might seem like a silly or easy question now – and it very well may be. Yet once the funds are actually cut off and you’re making difficult decisions under a lot of stress, the answers might not seem so obvious.

Therefore, I recommend making a list now (a physical one, not just a mental one) of the extraneous areas of your budget that you can cut immediately when you lose income or decide to switch jobs. Then, prioritize the rest of your expenses. You might decide that your mortgage is your number one priority, and you’d rather carry credit card debt than miss a payment. Or, while not likely a great idea, you might decide that you don’t really need a home and are willing to default in order to keep from going further into debt elsewhere. These aren’t lovely or easy questions to ask yourself, but one day you might be glad that you made the decision when you were able to sit and really think about it.

Moving Laterally

Sometimes the best direction to move isn’t always forwards. Let’s say that you are fortunate enough to know that your job is going to end in 6 months. Or, you could even be just so sick of your current office conditions that you’re ready to leave your position. If you are not able to move upwards, it might be in your best interest to move laterally. This might mean finding new work in a similar position at a competing company, or simply finding another line of work altogether that grants you equivalent pay.

Moving laterally, while scary, time consuming, and potentially dangerous, can provide you with new options, an ability to start fresh, and the chance to gain additional skills that you did not acquire at your previous job. This move, in turn, can then allow you to move upwards. In addition, in some situations, moving laterally might be your only option to maintain a consistent income if your previous work situation was at all volatile. Of course, in order to take advantage of potential opportunities, you must keep an eye on the job market even while you are happily employed. After all, what are the chances that the job that matches you and your life perfectly is going to come up in the 6 weeks that you spend job searching in between jobs?

Always Keep a Resume Updated

When was the last time that you updated your resume? Chances are, since you last went out job searching, you’ve worked at a new position, lead a different project, or gained some valuable skills. Keeping a resume updated can be the difference between landing your dream job or staying stuck in your current position. Sometimes you find out about opportunities at the last minute, and being able to simply say “here’s my resume” is a lot better than asking yourself “now on which floppy disk did I last save my resume”?

Especially if you haven’t been in the job market for awhile, you might want to take a look at updating your resume. The style and required information in your resume has changed with time, so you might need to update your address or phone number, and maybe add your email address.

How are you planning on avoiding financial disaster as you attempt to go to new work with no debt?

Avoiding Financial Disaster – New Work, No Debt originally appeared on Canadian Finance Blog on October 27, 2010.