February Financial Fitness Challenge—Keep Your Head When Facing Job Loss

by Susan Tiffany, CCUFC

There are two kinds of workers these days—those who have lost their jobs, and those fearful that they soon will.

You can make yourself ill focusing on all the things that could go wrong—you could lose your job, you could lose overtime that you've come to rely on, you could lose your house if you lose your job.

Take a deep breath. Don't obsess about all the things that you cannot change or influence—focus instead on the things you can change. If you still have a job, prepare for what might happen. When you're prepared you'll feel a lot better and in control of at least some things in your life.

Preparation is the backbone of money management. That makes this economy a timely wakeup call for anyone who has not been paying attention to the basics.

Break it down

If you haven't already, turn your energy to these tasks:

• If you have unsecured debt—credit card bills—pay it off. You will get an instant return on your money that no other investment can equal.

• Stop using credit cards unless you must, or unless you already pay them off every month.

• Critical habit: Pay all bills a tad early—so you don't end up paying penalties and increased interest rates from slightly late payments. Some billers are narrowing payment windows; you might have a nasty surprise in a late fee.

• If you're receiving a tax refund, go to your payroll department and resubmit a withholding form so that you get more money in each paycheck. Put the extra cash into paying off bills and building your emergency fund.

• Speaking of your emergency fund, strive to put away enough to cover at least three months' expenses; in times like these, stretch it to more. Don't get hung up on how big this number is—just steadily keep adding to your fund.
  This economy is a wakeup call for anyone not paying attention to money management basics.

• Use direct deposit and automatic transfers from checking into savings. You may remember the NACHA survey we've reported about before: NACHA, the electronic payments association, Herndon, Va., surveyed 1,505 people by telephone. The survey revealed that those using direct deposit save $390 a month, $90 more than those saving manually. (At a 6% yield, those direct depositors could save an additional $22,867 in 10 years.)

• Automate anything you can by using online bill pay and reminders. This will help you make consistent progress on financial goals, and help you avoid late fees.

• Refinance your mortgage or car loans to take advantage of lower rates, if you qualify. Talk to a credit union loan officer about options to reduce your debt load or retire debts faster.

The more of these habits you develop, the more you'll ease your anxiety and prepare for a potential job loss. And if you keep your job? You'll never be sorry you traded your bad old habits for productive new ones.

If you lose your job

The people at your credit union are among your best resources if you become jobless. Many credit unions have programs in place to help you through this painful and scary experience. Make a call or visit to your credit union one of your top priorities if you are laid off.

This month's Turning Point takes on job loss. Read "Get Back in The Game After Losing a Job" for ideas and links to more helpful resources.

More good habits

In addition to the ideas in this column and in Turning Points, you can pick up valuable ideas from the readers who shared their favorite money management habits with us all last year in the Financial Fitness Challenge. Now it's time to vote for your favorite among the 60 ideas we published. Voting closes at midnight CST Feb. 28. Check out the entries and use the ideas that fit your family's goals and lifestyle.

And, remember to register for the Financial Fitness Challenge, paired with our Turning Points feature. Each month we'll randomly select five winners to receive $50 Visa gift cards; we'll choose each month's winners only from that month's entries, so enter often.

Next month we'll look at a much happier Turning Point and Financial Fitness Challenge—having a baby.

ST
Susan Tiffany, CCUFC
askem@cuna.coop

Published February 2, 2009

Printed Wednesday, November 25, 2009

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