How to Have a Financial 911 Plan

You know about 911. It’s the number you call when you’re having or witnessing an emergency. Your daughter could have fallen off her bike, you could have had an automobile accident or witnessed a crime in process. Regardless of which of these happens, the first thing you’ll do is call 911

It’s good to know 911 is available in the event of an emergency, but do you have a financial 911 or emergency plan in place? Do you have a plan in the event of a car accident or some other type of emergency that could leave you thousands of dollars in debt? It’s great if you have an emergency fund, but you also need an emergency plan. When you have one, you’ll be able to cut through all the confusion and calmly deal with the emergency.

What’s the biggest financial emergency that could affect you? It’s probably losing your job. We have a friend who worked 17 years for an aerospace manufacturer under a contract with the US government. Two weeks ago, the contract was canceled. He will soon be out of a job, and he is in his mid-50s. We hope he had a financial emergency plan to help him through this.

What should your emergency plan consist of if you were to lose your job? Here are some suggestions.

Modify your budget

You’ll be living off your emergency fund, and you’ll need to adjust your budget to fit it. Be very deliberate in all your spending, constantly asking questions like do I really need to buy this particular item or could I live without it.

Cut all non-essential expenses

Make a list of your non-essential expenses. This should include recurring items such as Amazon Prime, Netflix, Hulu, magazine, and newspaper subscriptions, and maybe even your health club membership. You should also reduce your cell phone bill to the lowest possible tier, and your cable TV subscription.

Learn how to apply for unemployment benefits

Depending on where you live, getting unemployment benefits could be stressful. Learn in advance what you would need to do to apply for them. It should be much easier to do this than when you’re actually unemployed and feeling scared.

Where we live you can apply online or in person. If you choose to apply online, the first thing you will be required to do is prove your eligibility. This means you’ll need to have lost your job through no fault of yours. You may also be required to meet some other program requirements.

You can probably apply online wherever you live. Just make sure you have all your information on hand before you start the process. Believe it or not, this may include getting and submitting your credit score.

Decide how to tell your family

The hardest thing you may have to do is tell your family that you’ve lost your job. It can be easier if you prepare in advance. Just spend a few minutes rehearsing how you’ll break the news. Then, if the time comes, you’ll be calm and in control, instead of looking panicky.

Make a plan for finding a new job

The best time to create a plan for finding a new job is when you don’t need one. You should check out job sites such as ResumeRabbit.com, Indeed.com, or LiveCareer.com. The site Indeed.com is a little pricey but helps you to create your own Indeed.com resume. Plus, the site will actually recommend jobs.

If it’s been some years since you last created a resume, you might go to a website like Resume-now.com, where you can create a new resume instantly, or at least the site claims it can be done instantly. Other sites you might want to check out for creating your resume include livecareer.com and MyPerfectResume.com.

Determine how you will spend your downtime

Like it or not, you’re going to have lots of downtime on your hands. How you spend this time? It’s important to maintain a positive attitude as it might be many weeks before you find another job. The best way to use your downtime is to work on DIY projects that would give you a sense of purpose. This should help combat the frustrations you’ll feel during your job search.

Other emergencies to plan for

Losing your job or suffering a major illness are probably the two biggest emergencies to plan for. But there are others you could encounter where you should also have a plan in place. For example, what would you do if one of your automobiles dies or is demolished in an accident? You should have a plan for getting by with just one car. Or what would be your plan if your oven, dryer, washer, or refrigerator stops working? These emergencies won’t be as painful as losing your job or having a serious illness, but they can be inconvenient and they do require a plan.

In summary

When you build your plan, don’t be afraid to add other emergencies to it. There is literally no emergency too small to be part of your plan. Take the time to plan for every possible emergency, as we guarantee this will pay off big time in the long run.