It may be challenging to see opportunity in the midst of adversity – turbulent financial markets, a slowing economy and, for many, job worries – but action reduces anxiety and increases the chances of success. If you’re stressed about losing your job, or are simply having trouble making ends meet, here are seven steps that can help you stabilize your financial situation.

1. If you receive notice that your job will end, apply immediately for Employment Insurance benefits; it can take several weeks to receive the first cheque.
2. Make sure that you receive all of the employee benefits to which you are entitled, such as severance and vacation pay, medical/dental benefits, expense reimbursement and career counselling.
3. Work through a possible job loss with your family, as a team. Sit down with your spouse and children and discuss the impact this may have on the family’s finances. Include everyone in major decisions.
4. Plan a six-month budget to enable the family to meet expenses while you are looking for other work. To do this, calculate your current monthly income and then estimate your reduced income when your job ends. Then estimate the family’s monthly expenses for the coming six months. If you don’t know what your expenses are, track them for one month. Keep a notebook handy and ask everyone in the family to keep receipts and write down everything they spend – even small purchases like drinks and snacks. At the end of the month, add all of these expenses. Group them into categories (such as food, transportation, utilities, clothes) and total each category. Create a monthly expense sheet for six months, adjusting each month for expenses that vary from one month to another such as tax payments, insurance and so on.
5. Again, sit down with the family to discuss these expense sheets. Talk about the difference between needs and wants. Then go over your predicted expenses and mark “need” beside those that are essential, like groceries, and mark “want” beside the others, like restaurant meals. Look at the “wants” and discuss which ones you can eliminate or cut back so you can get by on a lower income. If some of your expenses include high-interest debts such as credit card balances, consider ways to reduce them such as paying down balances with the vacation or severance pay you receive.
6. If your revised budget seems doable, put it into action and start building savings. For example, if you immediately begin living on your reduced budget, you can deposit the money you save into a bank account. Or maybe you could sell an extra vehicle or a boat. Or start a part-time job while you’re still employed.
7. If your revised budget shows that you won’t be able to meet your needs, it’s important not to get pulled into a cycle of debt. Some credit and debt services such as payday loans, consolidation loans and mortgage refinancing for example, may not offer solutions, rather just a different type of debt. They may add to your debt load and have a negative impact on your credit score and ability to borrow in the future. A better option is to seek professional advice as early as possible.

By working with your family, creating a practical strategy, and adopting thrifty money habits, you are more likely to keep your finances in good shape – and be in a good place to find another job.

Brian Pritchard is a senior vice-president of BDO Dunwoody Limited who helps individuals and businesses solve their debt problems. You can reach Brian at (905) 436-9100 or bpritchard@bdo.ca.