Losing a job can be a daunting experience, leaving many people wondering how they’ll afford basic necessities like groceries and rent. According to a recent GOBankingRates survey of 1,002 Americans, more than half of the respondents admitted they would struggle to cover essential expenses if they lost their jobs. This article examines the data and offers tips for protecting your finances in the event of a layoff.
Immediate Financial Concerns After Job Loss
The survey revealed that nearly 37% of Americans across all age groups would be most concerned about paying bills if they lost their job. The percentage breakdown is consistently high across all age groups. However, those aged 45 to 54 and 65 and older were particularly impacted. Affording groceries was another immediate concern for 15.77% of respondents. Additionally, those aged 55 to 64 faced the most significant difficulty.
Interestingly, women would struggle more than men to afford basic bills and groceries. Of the respondents in the survey, 16.34% of women said affording groceries would be their immediate concern. On the other hand, only 15.16% of men would be concerned. Likewise, paying bills would impact more women (39.30%) than men (33.81%).
Protecting Your Finances in the Event of a Layoff
Are you worried about losing your job and being unable to cover necessary expenses? There are several steps you can take now to protect your finances:
- Create an emergency fund: In the GOBankingRates’ 2023 Women & Money survey, 17% of respondents said that not having an emergency fund was their biggest financial regret. Financial planner Holley G. Cary recommends setting aside six to nine months’ worth of expenses as a long-term target balance for emergencies.
- Open a high-yield savings account: A high-yield savings account offers a higher interest rate than a traditional savings account. Hence, it allows you to build interest on your savings while keeping the funds easily accessible.
- Avoid tapping into retirement funds: Early withdrawals from retirement accounts can cost as much as 50% of the withdrawal in taxes and penalties. This is according to Merrill Edge. Resist the temptation to use these funds for daily expenses.
- Work to pay off high-interest debt now: Use the time before a potential layoff to review your budget. You could even check out different online websites for side hustle jobs. Further, identify areas where you can cut back on spending or pay off high-interest debt. Doing so will make it easier to manage your finances if you lose your job.
In conclusion, losing a job can be a stressful experience. However, taking proactive steps to protect your finances can help alleviate some of the burdens. By following the above measures, you’ll be better prepared to weather any financial storm that may come your way.