The economy in Dallas, Texas has been pretty robust up until now. But this week, it was pretty rough, with large companies in the area (and more nation wide) announcing layoffs.
On Monday alone, companies across the employment spectrum announced tens of thousands of job cuts in the U.S. and around the world, a stark sign that businesses are enduring a painful, protracted downturn.
Texas Instruments said it will cut 3,400 jobs due to slumping demand. The Dallas-based company said Monday it will slash 1,800 jobs through layoffs and another 1,600 through voluntary retirements and departures.
Nationally, Monday’s toll also included cuts at Caterpillar, Sprint Nextel, Home Depot and others.
All of this made me wonder if people have a backup plan, and if so what it is? I mean, if you are an employee at at great company but suddenly you are without a job, what can you do?
The answer is “not much” if you wait until it happens to prepare. But, if you act before it happens, you can do a lot to prepare.
- Establish an emergency fund. Experts say that you should have six months of living expenses in the bank for use in emergencies. That sound like a small fortune, and it is. It should, however, be the most important part of your financial plan.
- Drive debt to zero. Impossible for some to imagine in this economy, I know. But in bad times, it’s servicing debt that can really kill you.
- Diversify your income. Start thinking about how you can be building residual income from another source (like online business, for example).
How can you do that last one?
I mean really. How? Ask Colleen Slater. She has one crazy story. Her ex-husband stole her kids and she needed money to get them back. So she build a huge internet marketing empire to pay the legal bills — working only a few hours each night.
So, think about your backup plan. In this economy, you may need it.
