How to Deal with Job Insecurity
Oh boy! Last month was an exciting yet nerve-wracking month for me. After many debates with myself, I cut back my work hours at my day job from full-time to per diem (as needed). This decision didn’t come lightly. I’d thought through taking on this job insecurity for months, considering all the worst scenarios and their consequences in my head.
If you’ve been through job insecurity, voluntarily or otherwise, then you know the stress that comes with it. While you’ll read or hear a lot about updating your resume and networking to get a new or better job, I want to talk more about how to deal with job uncertainty from a financial perspective. Because a personal finance crisis is that last thing you need on top of a job crisis.
So what can you do to prepare for job insecurity?
1 | Stay at your current job until you have another lined up or a plan in place if you can
Before anyone thinks that I advocate quitting your job and maybe missing your next rent payment or meal to get out of job limbo, that’s not the case at all. Leaving any job can lead to even more inconsistent work and pay, which will bring added stress to your life.
If you’re worried about the finances to manage it all, stick with your current job as long as you can until you have another job or plan in place. You can buy yourself time waiting for a better opportunity to come along while still receiving a paycheck, healthcare, PTO, and any other benefits your job offers.
If you can, use the time you have now to sharpen your skills or pick up new skills that may help you in your next work situation. Both my husband and I had job changes on our mind for several months before they happened.
My husband took some classes in the evenings to help him with his skill set. I waited to see what jobs came available offering me more flexibility before I made my move.
2 | Stock your emergency fund
An emergency fund is meant to cover your expenses when you encounter a surprise like job loss or a medical issue. You’ll need a plump fund if your income is going to be unpredictable for the foreseeable future.
A solid emergency fund should cover at least 3-6 months of expenses. The exact amount will depend on your situation.
If you’re living life solo without any debt or other financial responsibilities like a mortgage or childcare, you may get by with three months of expenses in reserve.
If you have a mortgage, your children’s school tuition, student loans, or any other recurring financial obligation, you’re going to need a lot more in the fund. Depending on your job and family situation, you may need 6 months to a year’s worth of expenses saved.
One of the added benefits of having an emergency fund is managing your stress better. You don’t have to worry about how you’re going to afford the bills this month on top of worrying about losing your job. An emergency fund allows you to focus on what to do about your job situation.
Ideally, your emergency fund is kept in a separate account of its own. That way you know exactly how much is in it just by looking at the balance. If your emergency fund isn’t as full as you want it to be, make a point to start funding it more today.
If you’re still at your current job, it may be months before your work situation changes. That’s extra time to build your emergency fund. By the time your job situation changes, you can breathe a sigh of relief knowing that you have more money tucked away.
3 | Take on additional work if you have to
I don’t encourage taking on more work simply because I love side hustling. The easiest way to build a financial cushion for yourself is to increase your earnings.
You can cut back on spending but only so much because you still need to eat and keep the lights on at home. You might not be able to cut another $20 from your monthly, but you can make $20 hour after hour with a side hustle.
In order to do this, determine how many hours you can set aside for another job. I have a few hours each night that I can spend doing what I want. If you have children, it may be an hour in the evening after they sleep or only one weekend morning while your spouse watches them.
Then figure out what you can do to earn money during that time. I’m a speech-language pathologist in my day job, so I can work at another facility or privately for a few hours after my day job is over or on the weekends.
Several of my co-workers actually start their day early, work a full day, and then visit additional clients and patients in the late afternoon and evening. It's a consistent way to earn a few hundred or thousand dollars extra each month.
I was fortunate that after applying to jobs recently, I was able to pick up additional work quickly and sometimes found myself working over 40 hours a week. I knew it wouldn’t be for long though, so I did it and enjoyed the pay that comes with it.
I realize that not everyone has lots of options for additional work. If you can find a way to make it happen for you, it can be worth it. Many side hustles are flexible in terms of the number of hours you have to work and the specific times that you work.
Some jobs are virtual so you can work from home. A few flexible side jobs that come to mind are freelancing, pet sitting, and virtual assistant work.
4 | Make a financial plan
In a perfect world, you wouldn’t have financial worries. Inconsistent hours, less pay, or even a job loss would just roll off your back. Real life isn’t like that for most people. You need a plan to keep yourself afloat financially over the long haul.
A financial plan will help you manage your money and lower your stress over job uncertainty. It starts with having a budget so you know how much you’re spending and saving each month. Once you know those numbers, you can decide on a course of action for the future.
For example, let’s say I go part-time at work and expect to work 20 hours a week at $25 an hour. That’s $500 a week or roughly $2000 a month.
After one month, I’ll evaluate how well I’m meeting my expectations. Did I work an average of 20 hours a week? Did I make enough to cover my expenses? Did I have enough to increase my savings?
If not, what’s my plan? It may be that I dip further into my emergency fund for another few months. I may have planned to get another part-time job or side hustle to ensure I earn a minimum of $2000 a month.
I might ask myself if I can cut back further on spending. Or maybe I’ll have a steady full-time job lined up by then if it’s been my plan to get one.
Everyone’s plan will be different. Yours might be to take the first full-time position that’s offered to you. Or it might be like mine where you have continued uncertainty as the hours of your job vary.
It’s important to have a plan in mind, however, so you’re not leading yourself into further financial instability as the weeks and months go on.
5 | Discuss the situation with your partner
A partner can be a positive or negative influence when you’re experiencing job insecurity. On the one hand, a partner can ease the difficulty of an unstable job.
A partner may still be working and can provide a financial cushion to ensure you still pay bills on time and have food on the table for dinner if you do lose your job. That’s a huge burden lifted right there. He or she can provide emotional support as well.
I’ve been fortunate that my husband is supportive of my job change. He’s comfortable working full-time while my hours vary. That means agreeing to a tighter budget at home too.
We also might not get to spend as much time together because I have to work some weekends. He has to be more mindful of his schedule to take care of our dog on the days I’m working later or longer hours.
Other times, I get off early and take care of errands like cooking us dinner. He’s thankful for the work I put into maintaining our home.
Sometimes having a partner makes job uncertainty more difficult. You may have more mouths to feed and more expenses to pay than you would if you were on your own. A partner may not be supportive of an unstable job situation as well.
I’ve encountered many women whose partners were not supportive of them going back to school or starting a new entrepreneurial path because of the loss of income it meant for their family. There’s no guarantee that you and your partner will be on the same page about everything, including how to handle job insecurity or job loss.
The best thing you can do is to discuss the situation together, address each other’s opinions and concerns, and come up with a mutual plan for the future.
6 | Manage your stress
For most people, job insecurity comes uninvited. There’s not much more stressful in life than job loss or prolonged worry about losing your job when you need it. Most people focus on the actions required to get a new job. The additional stress and psychological toll of job insecurity get overlooked.
It’s difficult to feel out of control about your situation. You may not be able to determine when your time at your job will come to an end. Still, you can manage many other aspects of your job situation.
Get yourself prepared as soon as you think job insecurity lies ahead for you. Update your resume, try to acquire any additional knowledge or skills that may help you get a new job, and start looking for a new job. If you have in-demand skills, have faith that you’ll find a new job and land on your two feet.
If you have health care benefits or health-related fund unused, now is the time to schedule appointments and use them. Take advantage of all your work perks and benefits while you have them.
Beyond the job aspect, this may be the time to enjoy more of your hobbies or time with family. These activities can lower your stress, keeping you sane until you find yourself in a more stable employment situation.
Why I opted for job insecurity?
Many people stay at one job for most of their work career. This is the case with my parents and people of their generation. It’s common to hear of Baby Boomers working the same job for over 30 or 40 yeas and retiring with health benefits and a pension.
Things are different in this day and age. Job security isn’t as easy to come by. There’s also more opportunity for people who want to branch out and break the mold, changing from job to job and exploring their opportunities.
You might be wondering why I or anyone else would choose job uncertainty and the resulting financial uncertainty over those benefits and stability. The right kind of job insecurity has the potential to help a person in other areas.
In my case, job insecurity has been a positive change for me. It has led to better work hours, opportunities to work in different environments, more challenges that lead to improved skills, more pay for the time that I do work, less stress, time to take care of family, and ability to pursue other interests.
That’s a lot of benefits, right? These things couldn’t all happen with the regular full-time job I had.
I often catch myself saying “keep on movin’ on” under my breath whenever I run up against an obstacle, whether small or large. Facing job insecurity is one of those obstacles where you just have to keep moving on.
Who knows what will happen in the future? For now, handle that job insecurity with the tips above and you may find yourself in a better situation in the long-run.