7 Ways to Cope When You Lose a Job Suddenly
NEW YORK (TheStreet) -- It seems like we're never really secure. Though the economy is improving and the overall rate of layoffs is falling, Microsoft just announced it is slashing 18,000 jobs, or 14% of its workforce.
The cuts are related to Microsoft's purchase of cellphone maker Nokia, which has had its share of problems. So it would be easy to pass this off as one of those things that means nothing to the rest of us. But since mergers happen in good times as well as bad, and are often driven by the prospect of job-killing "efficiencies," the Microsoft case stands as an object lesson: Even in the best of times, your employment is never completely safe.
So how does a savvy worker prepare for a job loss that comes from nowhere?
Having a rainy-day fund is key, of course. Most experts think it should contain enough cash for six to 12 months of expenses. It needs to be easily accessible in a checking, savings or money market account. For a little more interest earnings, you could stash some is three- or six-month certificates of deposit. But those pay so little interest these days it's hardly worth the trouble.Also see: How to Fill Income Gap Forcing You to Take Social Security Early reverse mortgage, which is a loan against the equity in the home. These are especially attractive because you can qualify even after you lose your job. That's because there are no monthly payments on a reverse mortgage. Instead, the debt is paid from the proceeds of a home sale after the homeowner moves or dies. Fees can be high, so a reverse mortgage is probably best left until there's no good alternative. Also see: When It Makes Sense to Take a Loan From Your 401(k)
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