Nobody wants to lose their job, and there’s evidence that fewer and fewer Americans are prepared in case they do. Workers and families living paycheck to paycheck can be especially vulnerable to any interruption in income. Over a longer period without pay, these households can face extreme financial distress. In uncertain financial times, it’s critical to have a plan in case you become unemployed, and to understand what you must do if you lose your job.
A healthy amount in savings can help cushion against the harm of unemployment, but that’s often only a short-term response to losing your job — and assumes that you have any flexibility to save in the first place. If you become unemployed, it’s also important that you understand the social welfare benefits available to you, and that you develop your skills and resume to be more competitive on the job market.