When you are faced with unemployment, do you think you can stay financially confident? At first, you might not feel this way. Losing your job is one of the events that can really knock you from your comfort zone. Losing your primary source of income is a real-life nightmare that we all want to avoid. Of course, this is only true for the unexpected layoffs. If you quit your job, that is hardly something to be scared of because you made a choice. But if you are laid off from your job, that is something that a lot of people do not want to happen.
According to an article published on CNBC.com, layoffs rose in January of this year. The data revealed that US-based companies planned to lay off around 75,114 employees. This is more than 200% from December. The biggest sectors to have these planned job cuts are in the retail and energy sectors. This is oftentimes expected at the beginning of the month as companies let go of the seasonal employees that they hired for the holiday rush.
Being laid off from a seasonal job is probably acceptable – but not when you had been working on that job for years and years already. If you are relying on that job to sustain the lifestyle of your family and future, it can be a big problem if you suddenly lose it.
But that is the reality of life, isn’t it? Life can sometimes be unfair. You can feel secure and comfortable one day, and packing your things the next. What can you do when you are suddenly faced with unexpected unemployment?
Is it possible to feel confident while unemployed?
Probably the important question to ask here is this: is it possible to feel financially confident while you are unemployed?
The answer to that is yes. It is all a matter of making your finances secure so you can survive a temporary unemployment stint.
Gallup.com released a study that revealed what people feel about unemployment. According to the study, 63% are confident that they can find a new job that is just as good as the one that they lost. The data also revealed that statistics are already back to the pre-recession levels. This is a good sign for those who want to feel confident about their own finances.
It seems like the level of unemployment stress is really going down. In case you want to feel the same financial confidence, here are a couple of tips that you may want to implement in your life.
Have an emergency fund.
Start by having an emergency fund. A job loss is one of the top emergencies that you need to prepare for. It is probably second to a health emergency. If you have a sizable emergency fund at your disposal, unemployment will not rattle you – no matter how unexpected it may be. You do not have to feel stressed because you know that you have a couple of months of finances to meet the needs of your family. You can concentrate on finding another job without worrying about where you will get money to buy basic necessities.
Diversify your income.
You can also lower unemployment stress if you have a diversified income stream. While a day job will provide you with your main source of income, opening other sources will keep you afloat in case it is compromised. Setting up a passive income is a great option. If you have an extra room in your house, you can probably get a roommate. Or if you have a basement or garage, you can probably have it renovated to act as a separate dwelling unit. This can help give you a thousand or so in your income. Even if you lose your job tomorrow, this income can help you get by until you find another job. You can also start investing. The returns of that investment can also be a great source of cash flow. Other sources include writing an ebook, getting a part-time online job, creating an online shop, etc.
Live a frugal life.
Finally, you also have to live a frugal lifestyle. This does not mean you will deprive yourself. Deprivation is not the answer to help you be financially confident. Frugal living is all about knowing what is important to you and financing only that. Those who successfully implement frugality in their lives can drastically lower their expenses. With low expenses, the stress to produce a huge amount of money will not be too great. You can be content to live with a small amount and your job loss will not be too devastating.
If you can implement at least one of these tips, you can safely say that you do not have to worry about the threat of unemployment. It will not be easy but you know that your chances of surviving it will be higher because you prepared your finances to take on this blow.
Benefits of focusing on financial confidence
There are many benefits when you are financially confident. One of them, as we discussed, is reducing the fear of unemployment. If you know that your financial position can take a hit, you do not have to stress yourself about being unexpectedly laid off. But beyond that, there are other ways that it can improve your financial position. Here are some of the other benefits of building up your financial confidence.
Courage to take risks to improve your finances.
The first benefit is having the courage to take risks. If you know that your financial position can take risks, that is a sign of financial confidence. Through the risks that you will take, you can open doors that will lead you to financial abundance. If you believe that you have a strong financial position, you can probably start your own business. It is hard to take on this risk if you know that your finances are weak or if you are living from paycheck to paycheck.
Secured financial future.
Another benefit of being financially confident is you will be trained to focus on securing your financial future. If you know that your future is taken cared of, you will feel at ease and confident with your current financial position. After all, you cannot secure your future without taking care of the present. When you train your mind to be a forward-thinker, you can be more creative and open-minded whenever you make financial decisions.
Less financial stress.
The more you feel confident about your finances, the less room there is for stress to grow. According to an article published on Forbes.com, a new study revealed that 2 out of 10 respondents had symptoms of post-traumatic stress disorder (PTSD) because of their financial situation. This is a serious predicament that can cripple you if left untreated. Since the best cure is still prevention, the best way to deal with stress is to work on your financial confidence.
Firm grasp of your financial plans.
Your confidence in your finances will also help you focus on your financial plans. After all, you can only maintain that confidence if you know the current situation of your finances. You will be encouraged to create financial plans that will help improve your net worth even further. You will be motivated to set goals and to overcome the sacrifices that you need to do in order to meet them.
Achieving financial confidence is not something that you can accomplish overnight. It will take some time and you need to commit to the task for you to be successful. Not only that, it also requires effort to maintain. Here is a video about 4 “crushers” that can stop you from feeling financially confident.