Financial Tip - March, 2005
Are you prepared for a job loss?

Losing your job or having your pay cut can be financially devastating. But there are things you can do to protect yourself, whether your job is threatened or you're suddenly terminated.

If you feel your job is in danger -

• Take stock of your finances. List all your debts and the monthly payments. Estimate what your monthly living expenses would be if you were not working.
• Line up sources of extra cash in case you need it. It's easier to obtain credit while you're still employed.
• Consider an equity line of credit if you own a house. You can draw this down as you need it, tapping into the equity in your home. Check whether it would pay to refinance your mortgage.
• Consider increasing credit card limits or obtaining new cards. Only draw on these as a last resort and only for essential expenditures. This is the most expensive type of debt you can have.
• Start networking to get a feel for the job market. Investigate the opportunities for part-time or evening jobs.
• Set a budget. Force yourself to make changes in lifestyle to reduce expenses. Even if you don't save much, the symbolic value is important.

• Start your job search immediately. Resist the temptation to take a vacation to "recover."
• Set yourself an aggressive budget and stick to it. It's better to reduce spending now than regret it later.
• If you begin to have problems making loan payments, talk to a reputable credit counseling service. Then talk to the lenders before you fall into arrears, and try to work out a payment plan.
• Tap into retirement savings such as IRAs or 401(k)s only as a last resort.

Hopefully you'll never find yourself in this situation. While you're working, develop a regular savings habit.

Try to build a reserve equal to three months of living expenses for job loss or other disasters. Then at least you'll have a financial cushion if the worst should happen.

Ciuni & Panichi, Inc.
Certified Public Accountants & Business Consulting Firm


25201 Chagrin Boulevard
Cleveland, Ohio 44122

(216)831-7171
Fax:(216)831-3020

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E-Mail us at:
finance@ClevelandSeniors.Com