Many people, like salesmen or contract workers, are used to dealing with a fluctuating income. Others, because of these rough financial times, are only beginning to have to manage their finances without knowing how much money they will make over the next several months. Of course, it is much easier to plan when you can predict how much money you will make next week, next month, or next year. But many people who are used to dealing with fluctuating incomes have some great tips!

• The advice that your parents gave you about paying yourself first is especially relevant. During fat times make sure you discipline yourself to set aside cash for lean times. If you need to come up with cash to tide you over, pay for an emergency, or even loan to your cousin George, it will be good to have the assurance of having a savings account to fall back on.
• Try to keep your monthly required bills as low as possible. For instance, if you need a new car loan, it may be prudent to extend the term of the loan in order to reduce monthly payments. Sometimes 0% car financing offers will not work out if the shorter term forces higher payments. If you anticipate an income reduction, this would be a good time to cut out extras like gym memberships. Walking is geat exercise, and it is basically free!
• Try to take some practical steps to reduce monthly bills that you cannot eliminate. For instance, this may be a great time to consider transferring high credit card interest rates to lower or 0% offers.

These basic suggestions may seem like common sense, but you’d be surprised by how many people do not follow them. When big money comes in, big money goes out, and when the windfall ends, little is saved for rougher times. We may not be able to control everything, like emergencies or dropping stock markets, but we can control some very important parts of our basic finances!

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A good friend of mine had been a very productive team member at his job for years. In fact, his team even got recognized for a couple of patents, and he was certain that his company valued the contribution he made. A few short months after he brought home his certificate and bonus money, the company decided to outsource his group. He arrived at work on Friday and was told he would not need to report in on Monday. Needless to say, he was unprepared for the job loss, financially or emotionally, and it was a devestating event in his life.

Prepare for a Job Loss

Companies are cruel these days, and few employees are really safe. In fact, over a million and a half workers were laid off in the last 12 months, and I’m sure most of these people were very good employees too. Most of us will get laid off a couple of times in our working lives. We cannot possibly prevent every possible reason for a job loss, but we can prepare ourselves.

Save Your Money, Just Like Dad Said

Your financial advisor, your friends, and your dad will tell you to sock away 3 – 6 months worth of living expenses. You need to have that money saved in a way that can be easilly accessed. Have you dont that? Well, if not, don’t waste time feeling bad about it. Honestly, I have the savings now, but I can tell you that I’ve had plenty of times in my life where I was lucky to have a week’s worth of living expenses saved in a cash account.

I know how hard it is to save, especially these days, with high fuel and food costs. Besides, one trip to the emergency room or mechanic can wipe out months of savings in about five minutes. It isn’t always possible to keep as much cash on hand as we should. And though I always advise people to look at their lifestyle for places to cut expenses if they just cannot save, I also have another suggestion.

Insure Against Job Loss

Look at job loss protection plans that pay you, and not the lender. Some mortgage unemployment insurance or credit insurance pays the lender. However, since you are the one paying the bill, I think you should be the one to get the cash!

Prepare Emotionally For A Job Loss

Also be sure to emotionally prepare yourself. Honestly, I have seen depression get to lots of people, almost as much as a loss of income does. A layoff can be a major ego blow, even though most layoffs are not personal at all. Understand that this is just one of those bumps in the road that almost everybody goes thorugh. Also know that many people – myself included – look back and say that, even though we did not feel that way at the time, that a layoff was a blessing, because it led to a better opportunity later. If you get the news that your services are not needed any more, stay cool. Some layoffs are temprorary, and no matter how angry you are at the moment, remember the other good advice your dad gave you about burning bridges. Gosh, the older I get, the smarter my dad gets!

Make sure you have your friends and business contacts stored where you can get to them if you cannot login at work too. You do not want to lose all of your valuable contacts just because you cannot get into the front door at work. The best way to find a good job as quickly as possible is through your network, and do not underestimate it.

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