I’ve been there.
I was fired on maternity leave a few years ago.
I never thought that would happen to me.
But it did.
Job security is not what it used to be. Most of us will experience getting fired at least once in our lifetime.
That’s why you should plan for it.
Here are five steps you must take to prepare yourself for it.
1. Analyze the Company and the Industry You Work in
Several years before the layoff, I spoke with a career coach because I felt I had run into invisible barriers in my career and got stuck.
He listened patiently to my thoughts and worries for more than an hour, and when it was time to end the conversation with some sort of conclusion, he asked me a simple question:
“Have you ever considered working in an industry that is not in decline?” he asked.
I fell silent, because the question was so simple, yet so revealing.
At that point, I had worked as a business journalist for more than a decade.
I was used to analyzing companies and industries and viewing the big picture before going into details.
Yet, the idea of analyzing my own workplace had never occurred to me. I worked for a daily print newspaper in Denmark, and print journalism is an industry suffering like dinosaurs in the ice age.
I knew that, and yet I had never linked my own career problems with the structural problems of the industry I worked in.
My coach explained that it’s really hard to make a career in an industry with falling revenues.
Shrinking businesses often have a bad work environment fuelled by saving plans and redundancy packages.
Shrinking businesses fire people, thriving businesses hire.
Shrinking businesses divest in the workforce, thriving businesses invest in talents.
Don’t make the mistake I made of being blind to structural barriers.
Analyse the business and the industry you work in.
Analyze them the way you would analyse a company before you invest in them to find out if your employer is a good or bad “investment”.
Ask yourself questions like:
- Is the revenue increasing or decreasing?
- Is the profit increasing or decreasing?
- Do you like the management? Do you trust the management?
- Does the company have any competitive advantages? Anything protecting them from their competitors?
You can download my investing check list right here to find similar questions.
2. Tighten up Your Budget and Save
It’s bad to lose your job, but it’s worse if you lose it and have to struggle with the shock and your finances at the same time.
The first thing you should do is tighten up your budget. You have to adjust your budget so you can afford to get fired.
Step one is making a budget – and you will be light years ahead of the pack here because most people never get around to making a budget for themselves.
If you have any kind of insurance – this is very common in my country – where you’ll receive part of your pay check for a period of time, you must make sure that you can live within the limits of that payment.
To tighten your budget, you must go through the specific items on your bank statement and discover what you are actually paying for.
Just go through each line and find out what it is and place them into categories.
The last time I did that exercise, I discovered some odd subscription services that I did not even know I was paying for.
After handling your budget, you will have more money at the end of the month than you usually have, and you will begin to increase your savings.
You need to build three kinds of saving pots.
A. Emergency savings: This is for a new fridge, car repair or some other emergency. This should be around $2,000 in cash.
B. Security savings: This is the buffer in case you get fired. It should be 3-5 months of your salary after taxes.
C. Freedoms savings: This is the money that will make you financially free in the long run. You invest this pot, so your money will make more money for you.
3. Seek New Openings
Now is the time to seek out other options.
Drink coffee with old friends, old colleagues and any professional contacts.
Let your network know that you are on the lookout for new possibilities.
Be discreet and obvious at the same time.
Some people might not have any job opening for you right now but they might think about you and mention you if they hear of something.
In any case, there is no shame in saying that you are open to new challenges.
You can also begin applying for new positions. Some of the best jobs I’ve had, I have applied for several times before I actually got it.
I went to an interview three times over the years before I got it.
Also, polish up your resume today.
It takes time to get a resume right, and you want to have nailed your resume before you actually need it urgently.
Now is also a good time to collect references and recommendations. It will be odd to ask for it once you get fired.
4. Find New (and Old) Hobbies
Find other interests than your job.
It’s depressing to get fired if your career is all you have to care about in your life.
Believe me, I know. I used to work in an industry where you make jokes with people if they leave at five p.m. You ask them what the special occasion is. Birthday? Anniversary? Earthquake?
My job was my career, my hobby, my passion. It contained most of my friends and social network.
On Fridays, I knew which bar other business journalists were at. During my vacations, I wrote travel articles. On my time off, I went to conferences and festivals with other journalists.
You must find joy about other things than anything work related. Be it literature, tennis, hiking, knitting, motorcycles, golf, sailing or watercolor drawings. It doesn’t really matter what it is.
If you’ve always dreamt about singing in a choir, now is the time to prioritize it and dedicate a night a week to it.
If you’ve always dreamt about writing a novel, now is the time to write the first outline of the plot or the first chapter.
Make a list of a 100 things you’d love to do. No, not a meager list of 10 or 20 half-hearted wishes. The list has to be so long that it will force you to be creative and think of hidden dreams that you hadn’t thought of for years. You have to push yourself a little out of your dreary routine list of nice acceptable things to do on a Sunday afternoon.
You must make this list before you get fired, because you might not be able to find joy in the middle of a big disruption.
The main point here is that you must find new interests that’ll continue to give you joy and stability when the structure of your work life is gone.
5. Get New Income Streams
You must have other income streams than your job.
In investing, you talk a lot about spreading your risk. Being a 100 percent dependent on your day job is the opposite of spreading your risk. That is putting all your eggs in a basket that one difficult boss can overturn with the stroke of a pen.
Investigate the possibilities of starting your own business. Is there a sidegig you can develop while still being employed?
You should invest your third savings pot. In the long run that can make you financially free on its own. You can learn more about how I invest in individual companies right here.
Do you want to learn how to invest like the famous investor Warren Buffett? I teach you how to do that in my e-book Free Yourself. You can download it here.