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Consumer Update

Preparing for the Pink Slip

            You never know when it may happen – the dreaded pink slip. You hear of it more and more – mergers, layoffs. What can you do to prepare for a possible layoff? And what should you do if it arrives?  Follow these steps to be financially ready:

  1.  Prepare a written budget.

  2. Dump debt, especially high-interest credit card debt

  3. Build a cash reserve. The rule of thumb is to have 3 to 6 months of cash to cover the bare-bones expenses. If you don’t have this emergency fund, start today.

  4. Cut expenses by reconsidering premium channel cable service, dining out and new clothes.

  5. Continue health insurance – I’ve seen many people get caught without it and end up with large medical bills in short order.

  6. Avoid borrowing or withdrawing funds from your retirement accounts. The layoff probably will be temporary, but retirement isn’t. Pulling funds out early could cost a lot in taxes, penalties, and lost growth. 

Source:  Financial Planning Association 

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