|
Planning a Cost-Effective Job Search
Whether you've already cleaned out your desk or are expecting
your department to be next at work for cuts, in this economy, it
definitely makes sense to plan a job search before you actually
have to do one. Call it a response plan.
Here are some basic steps in getting that process started:
Start or build your emergency fund. Unemployment
insurance won't even come close to meeting your cash needs when
you're out of a job. Start slashing your spending and funnel
that extra cash into an emergency fund that won't be touched for
anything but essentials — housing payments, food and insurance
expenses. Get a head start on building an amount equal to 3-6
months of those expenses as soon as you can, first by cutting
your basic spending and then possibly by paying the minimums on
debt purchases until you get that fund in good shape. If you've
still got your job after you hit your emergency fund target,
then keep your tight spending in force and go back to attacking
any debt that you have more forcefully.
Get advice on finances, taxes and possible legal issues.
There's nothing better than going into an exit interview with a
plan to put yourself in the best situation possible when you
lose your job. You might start by talking with a CERTIFIED
FINANCIAL PLANNER™ professional and a tax expert about any
spending, saving or tax specifics you should focus on now as a
way to blunt the damage from lost income later. And depending on
the situation and your room to negotiate, it might not be a bad
idea to invest in the services of a workplace attorney to make
sure you know what to ask for in an exit package. Always ask if
you can build unused vacation and sick days into a package and
see what you can do about extending health benefits before you
start having to pick up the cost via COBRA. COBRA refers to the
Consolidated Omnibus Budget Reconciliation Act, which gives
workers and their families who lose their health benefits the
right to choose to continue them under their group plan for a
limited time.
Research health coverage beforehand. The recently
passed federal stimulus package provides 65 percent subsidy for
COBRA premiums for up to 9 months, which is good news because
COBRA can be very expensive. In any event, it makes sense to
research individual, high-deductible coverage that might be an
affordable alternative to staying on your employer's health plan
while you're looking for your next job. Many quality carriers
offer enrollment online, but ask around and see if friends or
associates know good agents who can find coverage that fits you
so you'll be prepared if you need it.
Get personal disability coverage now. Disability
coverage offered through your workplace may barely cover you if
you are disabled while working, but once your job is gone, there
goes your coverage. It's always a good idea for individuals to
have some personal disability coverage of your own, and you
should buy it while you're employed because you need to prove
income before you can get the maximum coverage based on your
current income.
Understand your unemployment benefits. Generally, it's
a good idea to file immediately for unemployment benefits, even
if you're getting severance. Check on these provisions as soon
as you can. Also remember that the federal stimulus plan applies
here as well. Benefits will increase by $25 per week for some 20
million jobless workers, while the first $2,400 they receive in
benefits will be exempt from federal taxes. Also, if you get a
job before your severance or unemployment runs out, use those
funds to top off your emergency fund and then attack debt so
you're in a good position to weather any future storms.
Take advantage of any free job advice and assistance you
can. If your employer is providing office space,
resume-writing assistance or any other benefits to help you
transition to your next job, by all means, take advantage of
them. It's particularly smart to get advice with resume writing
because as industries change, the type of experience that hiring
executives want to see on resumes changes as well.
Network. Make sure you've identified key professional
groups both locally or nationally that will allow you to meet
colleagues and hiring executives in your industry or the
industry you hope to work in next. And plan to do little things
that keep you in touch with potential employers — make sure your
cell phone, e-mail and voicemail are always working, and make
sure you have resumes, cover letters and an interview outfit
always at the ready in case you have a sudden opportunity to
interview.
April 2009 — This column is produced by the Financial
Planning Association, the membership organization for the
financial planning community, and is provided by Don McCarty of
Financial Decision Partners, a local member of the FPA.
|
