INDIANAPOLIS (WISH) - Preparing for the worst is an important step in today's economy.That means, being ready in case you lose your job.
In week 5 of the Money Watch 8Challenge: 60 Days to Change our families learn how to handlethe "what if's" of their financial lives.
Merita and Joe had their income cut in half last year whenMerita was laid off from her job.
"You walk around with that stress pit in your stomach of youjust never know. And you know the weeks and you just sort of waitto see if you're going to get tapped or not," said Merita.
But, when Merita did get tapped she says she reacteddifferently.
"I didn't panic this time. I really took a long hard look atwhere the money was going and where could I cut. Where could Istart sliding back," said Merita.
"When layoffs are happening in the thousands you very quicklycan become a number. And you need to make sure that you stand out.That your resume is polished and you talk about it with your spouseabout what in the world are you going to do," said Financial ExpertPeter Dunn.
Dunn says everyone needs two "just in case" plans in place.The first is the layoff plan. In it, list how much money you haveon hand to pay expenses. Look closely at the benefits you wouldlose and the cost per month to replace them, especially healthinsurance. Have a list of networking contacts.
The second is the career backup plan. List potential placesyou would like to work include a so-called "dream" job and jobs youwould like to have no matter what the pay. List the strengths youhave at your current job. You can use them to help you get a newjob or find to keep the job you already have.
"Really it was Brent that wanted me to resign and stay homewith the boys. So when I got his well wishes I went ahead and didit. And it was a big adjustment for me though," said Amy.
For stay-at-home mom Amy and husband Brent, the layoff planincludes the possibility of Amy going back to work.
"I would, I mean if it were something Brent and I discussedand he was up for it, I would definitely be up to going back towork," Amy said.
Dunn said, "Everything you've just organized as part of thisprogram is now in place. You can say my benefits have changed thisway; my income has changed this way. These are the expenses I cancut back on. So you've got all the ammunition you need. You justneed to work your way through the process."
A process that for our families has now passed the 30th day.
Single mom Nadia said, "I wanted the help to get throughcreating a budget and finding ways I guess to make ends meet. Andthis is definitely a great help."
Nadia is now saving more than $500 a month or about $6,000 ayear. Money she will put away for her 3-year-old son Aidan'scollege education.
"I thought that the first couple of weeks were going to bedifficult and it has cost us some stress in our life, however, Ithink the more he gets involved and sees the numbers, he is goingto realize exactly where the money is going. So, I'm excited aboutthat," said Amy.
Half-way through, Amy and Brent are figuring out how tocommunicate about their finances.
And Merita and Joe got some very good news. Merita has a newjob with a salary nearly equal to the one she had when she got laidoff. Now, she hopes to put her new financial skills to the test, touse that extra money wisely.
Next week, the families tackle their savings skills.
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