Exjackly

It used to be that a young adult out of college, possibly even just out of high school, could count on having one employer for his entire career. Pensions were common, and it was easy to map out your life to the American dream.

That isn’t the case anymore. Few non-union companies offer pensions, and even union controlled workforces are seeing pressure to eliminate the remaining guaranteed pensions. Plus, both men and women are much more likely to have full careers. Finally, few of those careers will be at a single employer. Some estimates say that new grads will have more than 14 jobs before claiming social security [if it lasts that long]

While the frequent job changes can be positive, leading to more enjoyable work, better paying jobs, and the ability for many people to live where they want to, there is a significant downside. Lack of employee-employer loyalty – which goes both ways – means that it is very likely our new graduate is going to be unemployed at some point.

This may be for a few days or weeks while relocating and preparing to start a new job. It could also be for a few months or years during a career change or economic downturn. Planning for unemployment is an important part of being financially healthy. This planning is also more than building up an emergency fund too.

This post was inspired by The Dough Roller’s post I Just Got Laid Off Survival Kit.

Unemployment Starter Kit

I want to emphasize that you need to start planning how you will handle unemployment prior to finding yourself in that situation. Some of these steps will take months to complete, while others need to be reviewed regularly.

1. Emergency Fund. Fill this one up with 3 to 6 months worth of living expenses (not take-home pay). Depending on the situation that puts you out of a job, you may not get a severance package at all. Just a final check and a chance to bring your office belongings home. The saving grace here is that you do not have to fund it immediately. Building it up over time, especially if you have other financial concerns, is a time honored tradition. Plus, even if it is not fully funded before you need it, every dollar in there will still be helpful.
2. Budget. If you already live by a budget, congratulations. If not, at least track your expenses so you know how much money you do spend and on what. If you suddenly have no income, knowing this information enables you to trim your expenses as effectively as possible. It also allows you to work in the costs related to your job search.
3. Career Goals. Keep these written down and updated regularly. Compare how your current job fits on that list of goals. Ask yourself if you are still moving forward toward those goals. Evaluate if it is time to find a new opportunity that will continue to advance your career the way you want it to go. Doing this can help keep you away from the unexpected unemployment situation.
4. Resume. Keep this updated. Even if it is just revising a word or two to keep your current position description accurate, you should be working on this every 3 to 6 months at a minimum. Not necessarily sending it out, although regularly looking for better positions discreetly is often a good idea. Review this when you review your career goals, since they should somewhat overlap.
5. Networking. This is not schmoozing. Instead, think of it as a way to keep in touch with old friends. A quick phone call to people you know to ask if there is anything you can do for them is very helpful. Do not ask if you are not sincere about following through. Even if it is just a recommendation or looking up potential employers or employees in your area for your friend, offering to help and not following through is worse than not staying in touch. If you have helped a number of friends in the past, when it comes time to ask them for help in turn, they will be much happier to follow through and put in a lot more effort on your behalf.
6. Training. Especially if you are in an engineering, medical, accounting, or technology career, training is critical to staying current, much less getting ahead. Stay up to date on your current skills. That means current versions of the tools you are using, knowledge about where the profession is headed in the next couple of years, and learning about related professions. For example, a software engineer should know the current version of the language they use most, the trends in outsourcing/consulting for their area of expertise, and be expanding their knowledge of project management.
7. Where to live. Different professions have hot markets in different parts of the country. Health care all over, but even hotter in the Sun Belt. Acting has the most opportunities on the coasts. Technology has been better in the Bay Area, Denver, Chicago, Dallas, and Atlanta among other cities. Not all of those places are going to have the same appeal to a job seeker. Knowing where you want to live and what the employment market for your career is like in those locations will give you a better chance to tailor your search for the best results.

Following these steps will give you the best chances of avoiding unemployment and being prepared if it should still happen to you.