Downsized, Laid Off, Let Go, etc…
Downsized, right-sized, reduction in force, reengineering, corporate restructing, company downsizing, layoff. These are all fancy corporate terms that mean jobs are being eliminated and employees’ financial situations are about to change.
Downsizing is something that most people dread thinking about and certainly don’t want to experience. But the reality is most employees face the possibility being downsized every week, no matter how great you are performing your job duties.
I can’t afford to be downsized!
We have a serious question for you: If you were downsized not in six months or six weeks but in the next six (6) hours, would you and your family be OK financially? What if it took you four (4) months to find another job with a comparable salary – would you and your family still be OK financially?
Congratulations to you if you were able to answer yes to both of the questions above. Most people would not be OK financially. Being downsized is one of the things employees fear most. Here’s why:
- The average American is two missed paychecks away from financial disaster.
- More than 25% of Americans have no emergency savings
- 76% of Americans live paycheck to paycheck
- The average US household credit card debt stands at $15,611
- Average student loan debt is $32,264
- According to the Federal Reserve, the median balance of retirement accounts held by Americans who are saving for retirement totals less than $60,000
The reality is (and the statistics above prove) that the average person cannot afford to be downsized. Being downsized for the average person would cause financial disaster, emotional stress and sometimes even physical illness.
The possibility of being downsized is real
We’ve all heard the news reports about the number of people that get downsized each week. Although most people recognize that downsizing is always a possibility, they just hope and pray that it doesn’t happen to them. The reality is the average person is not at all prepared financially or emotionally for a corporate downsize.
Most people dread the thought of being called into their manager’s office to hear that their job has been eliminated because they don’t have a Plan B in place and they certainly aren’t prepared financially (i.e. no emergency savings). So once again we ask, If you were downsized in the next six (6) hours, are you prepared financially? If not you need a Plan B, NOW!
Downsized TV show
Perhaps you watched the Downsized TV show that aired a few years back. It followed a family where the parents had lost their jobs and showed the major lifestyle adjustments that were necessary just to survive. It was heart breaking to watch the struggles they experienced and be reminded that this is many people’s daily reality.
Repair your roof before it begins to rain
Let’s face it the inevitable financial storm will come, so it’s best to prepare in advance. We don’t believe that counting on a job (most people’s Plan A) to provide 100% of your income is safe because if you go through a downsizing, you suddenly lose all of your income.
It’s best to just accept that the fact that being downsized is always a possibility and then prepare for it before it becomes a reality. The average person won’t prepare themselves financially however, just the fact that you have read this far says you are not AVERAGE.
Have a Plan B
We teach the people that we mentor to have a Plan B, just in case your job is eliminated. What’s a Plan B? Another source of income that you generate while you still have your job. It’s a way of protecting yourself and your family in case you are downsized. Establish a financial plan now and make sure it includes a solid Plan B. Don’t wait until you have been downsized. Read our story to find out how we can help you create a solid Plan B.
Statistic sources: http://money.cnn.com/2013/06/24/pf/emergency-savings | http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=ob_article_footer&iid=obinsite | https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/ |http://www.fool.com/retirement/general/2015/01/10/the-typical-american-has-this-much-in-retirement-s.aspx | Photo credit: Unemployed by Bill Selak is licensed under CC By-ND 2.0