You probably read the title of this article and paused for a beat. At first blush, one is not likely to associate prepping with job loss. That seems to me something that would be better covered on a financial wellness website, or perhaps somewhere else.
But when you think about it for a moment more job loss is something that most preppers should be preparing for. In fact, most preppers are probably better prepared for job loss than your average person.
Even so, job loss is a time of great upset and uncertainty for most people. At the onset of the Great Recession in 2008 alone, some 2 million people lost their jobs. Another 4 million plus lost theirs the following year in 2009.
And millions upon millions more in the years following. Only recently has the U.S. economy started to recover from that tumultuous time, and even now many people remain underemployed or unemployed as their new normal.
With financial and economic prognosticators already whispering of a second, Great Crash just around the corner, with automation replacing hundreds of types of jobs, plenty of people are fearing another bust that will see them without a job.
When financial insolvency and homelessness are hot on the heels of job loss for the majority of westerners, you had better prepare for it with the seriousness of any natural disaster.
In this article we’ll address the scary 800 pound gorilla in the room and talk about preparing for job loss like a prepper should.
Table of Contents
Cleaning Out Your Desk
Losing your job is one of the scariest “domestic” events a person can face. With your primary source of income disrupted, not to mention your day-to-day regimen upended, it is all too easy to feel panic start to grip tightly.
While you should never panic, the feeling of dread is warranted: most people have less than one month’s worth of expenses in their piggy banks.
Unless you work for yourself, you need never think that you are irreplaceable to your workplace. Even then, a bad turn of business or shrinking market can see you, effectively, out of a job.
It is grimly humorous, but every line at the unemployment office is full of people that were certain their job just could not live without them. And yet there they stand, with their hat in their hand, looking for handouts or for their next gig.
You can find yourself out of work for a whole host of reasons, some of them your fault, some of them not. Frankly you might just not be a very good worker, or maybe you didn’t keep your skills up to date with the demands of a changing industry.
With new management, or leaner times, the unproductive, the lazy or the inefficient may see themselves cut loose.
Perhaps a younger, better, hungrier ace comes in and wows your employer with displays of greater profits or better productivity. Maybe you just flat don’t get along with your co-workers, and ill will finally built up to a breaking point.
But then again maybe it isn’t your fault.
You might be a great employee, even an exemplary one. maybe upper management mismanaged the company, and its profits, right into the red and with the owner or investors heading into the poor house any and all components of the business that can be cut, and a few that can’t, are being cut are in order to stop the financial bleeding.
Maybe there’s nothing for it, and your employer simply fell on hard times and the owner was forced to make the call. Your number came up; you drew the short straw, whatever.
The end result is the same: whether or not your workplace is happy to see you go, it’s time to grab that box, clean out your desk and make that last, long walk to the parking lot. Sitting in your car you feel numbed. You’ve lost your job. No more money. What will you do now?
The Real Dangers of Job Loss
We will not be concerning ourselves with any of the second-order effects of job loss within the confines of this article. I could care not the least for the impact to your ego, damage to your self-esteem, or jangling of your feelings.
What I’m concerned about and what you should be concerned about is the impact to your financial solvency.
Whatever your ethics are about money and wealth it undeniably makes the world go round and if you don’t have it, or have enough of it, your day-to-day life is going to become very unpleasant indeed.
Let’s recap everything that money can do for you. Money is required for the most basic and the most essential commodities in life. Without money, you don’t have a roof over your head, at least a proper one.
Without money you cannot hold down a mortgage, pay the rent or even check into a hotel for a night. Without money you cannot turn on a light, or turn on a tap to get water; your services will long have been shut off since you stopped paying that bill.
You’re not going to get much food without money, aside from what you can grow or catch. You can’t pay for a cart full of groceries with barter or promises. If you get sick or injured you’ll need money to foot the bill at the doctor’s office or at the hospital.
Money pays for access to expertise that you lack. Same goes for that nice car you have sitting in your garage or in your driveway.
If it starts to falter or if it breaks down you’ll need the money to foot the bill for a tow and for the expert technical service to get it running again, assuming you, of course, don’t have those skills already yourself.
But that’s okay; you have a sizable nest egg set aside for just this occasion, right? It’s not like you have only days or a couple of weeks to right the financial ship, right?
If you don’t, you’re probably already feeling the icy dread set into the pit of your stomach. However bad you feel, however afraid, you can quadruple that if you have a family depending on you.
Let me speak plainly: if you aren’t earning, those kids, your partner, they don’t eat. They don’t have a warm or cool place to sleep. They don’t have a roof over their head.
You and they will be made more vulnerable in every way imaginable. The cold calculus of modern life is this: money makes problems go away, great and small.
If you don’t have money, your problems will multiply and grow large and strong. If you have a lot of money, your problems will shrink. Some of them will go away.
Unless you win the lottery, are already independently wealthy, or are a trust fund baby you need to work to earn money to get the things you need to provide for those you care about, even if it’s only yourself. In the next sections I’ll give you some advice to do just that.
Strategies for Coping with and Preparing for Job Loss
There are two ways to prepare for job loss, generally. One way is to build yourself a cushion of resources, financial and otherwise, that’ll be waiting for you in the event you need to call on them.
Think of this as a sort of monetary lifeboat to maintain your standard of living for a length of time in the event your income stream is cut off.
The other way is by developing a sort of financial anti-fragility, typically done by diversifying your income streams, having fallback skill sets, side hustles and smart investing.
Using this approach, you don’t have me only one pipeline of money coming into your bank account. Multiple pipelines, some larger and some smaller, but they serve to keep the flow of delicious greenbacks coming whether you lose your job or not.
Either strategy can work on its own to lessen the impact of job loss but ideally you’ll be employing both simultaneously, making job loss more of a minor setback or even an annoyance compared to your average worker bee in America.
Creating Your Financial Lifeboat
Your financial lifeboat will be comprised of two simple components. Money, in the form of savings, and provisions, which are necessities like food, water, household goods and other staples.
Chances are if you’re like most preppers you already have plenty of the latter, and potentially some of the former though I’ll bet not as much as you’d like or should have.
Saving enough money is a simple puzzle, but not necessarily easy. Simple, in that all you have to do is put back a certain percentage of everything you make into a completely inviolable, sacred, emergency fund.
Even just a savings account at the bank turns you a piddling amount of interest or the classic strongbox in the safe. I won’t be delving too much into banking strategies and so forth for your money, just suffice to say when you need that nest egg, you need it and you’d better have it.
But I did say simple, and not easy. Saving scratch to contribute to your financial lifeboat fund may not be easy if you are already on a razor-thin budget.
Even those people who aren’t it seems like it never fails that some unexpected expenditure comes up every week, or every month. No matter what you do it seems like you make it across the “finish line” to the next payday with nary $5 in your wallet.
This can be overcome if you have the will and the discipline.
A few strategies for saving a few extra dollars include clipping coupons, cutting back on frivolous spending, and skipping spending on things like fast food, extra entertainment, hobbies and so on.
Everyone has something they can do without if only they will stop themselves.
Also keep in mind how important it is to contribute to this lifeboat fund.
No matter what else is going on in your life, no matter how important it is, remember what you are saving it for: you are choosing to pay yourself now in order to ensure that you and yours need not be troubled by one of the worst things that can happen to a person in America today.
By paying yourself first you’re choosing to reinforce, to protect, the things that matter most in this life.
How Much Should You Have Saved?
The only correct answer is as much as you can, but the more practical answer for most people is a bare minimum of three months worth of all expenses.
This can serve to give you a little breathing room until you can get another job lined up. Living a lean lifestyle while you are between jobs can help to extend this reserve somewhat.
A much better answer is six months to one year of all expenses, saved up, in the bank.
Imagine how nice that would be, how freeing, to know that you don’t have to do one single thing to improve your situation for an entire year if you lost your job and life will go on just as it always has.
Now, I’m not saying you should do that, only that you could if you’ve got a nest egg built up to that level.
It will take work. It will take dedication, saving and sacrifice until you get there. But I promise you it’s worth it, and beyond that it are one of the most practical and important preps anyone can obtain in this day and age.
Honor Thy Budget
While you should have been living and operating on a budget your whole life, assuming you haven’t the time to start is definitely when you lose your job. Living on a strict budget is the only way to say with any certainty how long your financial “air tank” will last.
Begin by slashing, utterly, anything non-essential. And I do mean anything: cable, internet (if not needed for money-making endeavors), subscriptions, memberships, entertainment, luxuries and so on.
Then you need to really get down to brass tacks, sharpening your pencil and getting a hard number on what it costs you to pay your bills and survive each month.
Start with housing and utilities. Things get a lot worse if you are homeless. Then move on to food, water and hygiene items. Anything that you depend on to stay healthy and clean.
After that, “support” costs like vehicle expenditures and anything else that helps you get more done with less time and effort. Finally, debts, things like credit card bills and others.
You must seek to honor your debts no matter your situation, but if things get truly dire then you default on those, first, before other personally relevant bills.
Once you have a everything tallied, down to the cent, you have a figure to compare against your reserves or what income you do have remaining.
Dividing your monthly expenses against your reserves shows you how long you can last operating under the income deficit incurred by your job loss. Once that is done, you must stick to your budget or you’ll see that figure shrink.
Consuming Your Stockpile
You can help to offset how much money you need in your financial life boat if you have gone on prepping as normal in the meantime. 3 months, 6 months or 1 years worth of food, household goods, water and other provision will be even more of a comfort if you’ve lost your job.
No matter what else is happening, no matter how dire your personal financial situation, knowing you have good food to eat and clean water to drink is an immense comfort. The world does not have to be on fire for that to be valuable.
We will all assume that you will look for work immediately to rectify the loss of your job, but what if you can’t find work straight away? What if you lost your job because of injury or illness and no additional job will be forthcoming?
Having 6 months’ worth, a year’s worth or even more good food on-hand will suddenly be quite boon.
If you have been prepping diligently and taken care to lay in food in ample variety for nutritional as well as culinary concerns you need not even suffer the doldrums of the “same ol’ thing” for breakfast, lunch and dinner that sometimes overtakes preppers who only stock the essentials.
If you decide to eat into your stores during a job loss situation, raiding your shelves for things like paper towels, toilet paper, food etc. will also help what money you do have in savings go farther since you won’t be buying them at the grocery store when you need them.
I’ll be blunt: in 2020, you are none too smart if you have all of your financial eggs in one basket. a single income stream, no matter what sector, no matter how long you have nurtured it, is simply too vulnerable to a rapidly changing marketplace and economy.
These are tumultuous times, and not just politically. All industries and commercial endeavors are vulnerable to the shifting sands of globalization among other factors.
Job loss is not always something you’ll see coming, or even be able to anticipate, and that makes it all the more dangerous to rely on your 9-to-5’er as your sole source of income.
What you should do instead is cultivate multiple, independent income streams, or at least potential income streams. This can be accomplished in several different ways.
Get a Side Hustle
Yes, I do mean work more, at least on a part time basis. Call it moonlighting or whatever you will, people have been doing part-time work is outside the bounds of their primary job for ages.
It might be something you’re trained for, something you’re passionate about or just menial work to bring in some extra dough. It doesn’t particularly matter so long as you do it.
The right kind of side hustle could become your primary job in the event you lose your day job. Before you start a side hustle, think through what it might become if you had to rely on it as your primary source of income.
Something you’re passionate about is a great side hustle because it will feel less like work, and you’ll be actively refining your skills.
If you get good enough, losing your job may actually be the best thing that ever happened to you: some of the world’s most successful and fulfilled people only stepped into their passion as a primary source of income once they lost their 9 to 5 grind.
Don’t discount the idea of close-to-home labor jobs, either. Chances are you have people in your neighborhood who need their lawn mowed, gutters cleaned out, fences painted and more among an entire assortment of minimal-skill but high-paying tasks.
Such transactions require very little in the way of knowledge or equipment on your part and are most often cash-money, meaning that, if you chose, you could keep such earnings off the books.
With the prominence of internet based business and for-profit content creation now is the time, more than any other in the past, that you can earn money right from the comfort of your own home, with blogging, article writing, video content creation (or editing) and more paying well enough to be viable revenue streams on their own, and that is before getting into monthly revenue services like Patreon.
Having a side hustle is not limited to urbanite preppers, either. Those who live in rural areas or who choose a pastoral homesteader’s life can definitely generate additional income through their chosen lifeway.
Anyone that grows their own crops, even in a small garden, will often have a quite a surplus.
The demand for farm-fresh, clean produce is higher than it has even been, and it is no difficult task to sell it on the roadside or at a farmer’s market. Milk, eggs, meat and more animal products are also sure sellers.
Those of a more industrial inclination could rent out their services using any variety of farm implements to assist with the work of others in the area, or could scratch-build everything from furniture to tool racks and chicken crawlers. Home goods like quilts and blankets are also useful, perennially popular items that can be mass produced at home.
The sky is the limit; use your imagination and you can come up with limitless ways to make some money on the side.
Consider Passive Income Streams
A passive income stream is anything that makes you money even when you’re not actively working on it or watching over it. An interest-earning bank account is one such passive income stream.
A rental property is another. Basically anything that, once it’s set up right, will make you money every month whether you touch it or not is a great way to diversify your income.
Other possibilities include affiliate marketing programs, or a small web store with drop-shippable merchandise.
And for the record, passive does not mean easy.
Aside from “set-it-and-forget-it” income like interest-earning bank accounts (which as a rule produce very little interest) you will have to put in the work, effort and money into a passive income stream to make it sustainable and viable and then they will need ongoing care and maintenance periodically.
In the case of some passive income sources like rental properties they can be a dream come true… if you have good tenants! bad tenants will turn into expensive nightmares who will tear up and mistreat your property, making it a money pit, as well as keep you up at all hours fixing clogged toilets and such.
For older preppers who perhaps don’t have quite as much pep in their step or feel they have started too late in life to engineer and initialize a passive income stream, do not despair!
There are plenty of low-impact passive income streams you can take advantage of. Probably one of the best is making use of your vast depth of life experience and accumulated store of hard-earned wisdom and monetize it.
A YouTube or social media channel, or blog featuring video chats or simple long form posts talking about various subjects in your area of expertise, your life experiences and simply the “way you see it” are comparatively simple, fun and evergreen sources of income.
Do not hesitate if you lack the technical skills for such a thing; your kids or grandkids will know plenty about the subject and can help you, and if you have no such relations of your own those with the skills are plentiful on the market and have increasingly affordable rates for such work. Do not undervalue your own expertise!
If you want to get started with passive income, there are lots of good books on the subject and a simple internet search furnishes many ideas.
Invest, Invest, Invest!
If your money isn’t working for you, it’s decaying. The rising costs of goods and inflation means money is just sitting at piggy bank earning at least nominal interest is actually losing buying power.
Your money, in effect, is rotting on the vine. The way to prevent this from happening is not to spend it before it goes “sour” but to invest it instead; get your money making you money.
Investing strategies are as numerous as the stars. Some are low-risk, low-yield and others are high-risk, high-yield.
Some investing strategies require a significant amount of capital, others not so much. It all depends on how much you have to invest with and how much risk you can tolerate.
And no matter what kind of investing you’re looking at investing is not for the foolhardy, or the unwary. It is all too easy to get taken by charlatans or to make a bad investment and lose it all.
For this reason you have to learn what investing is all about as a general financial strategy and furthermore learn the ropes of investing in a given sector. To do otherwise is akin to gambling, and if you want to gamble you can head to Las Vegas.
A few aggressive investing strategies for those entering middle-age or their early golden years that can help you catch up if you have the necessary investment capital and are willing to endure more risk than safer, lower-yield investments.
- Domestic Stocks
- Foreign Stocks
- Aggressive Growth Funds
- High-yield Bonds
- Micro-cap Stock Funds
- Options Trading (Not for the faint of heart!)
- Venture Capital Pools
- Real Estate Investment Trusts, or REIT’s
Less aggressive investing strategies for those without much money to risk or who simply cannot stomach the idea of losing otherwise “good” money:
- High-Yield Savings Account
- Dividend Stocks
- Corporate or Municipal Bonds
- Money Market Accounts
- Treasury Inflation-Protected Securities
If you lose your job your investments will keep right on earning you money, assuming they are earning it in the first place. Combined with your side hustle and passive income you may very well be able to replace the income of your day job entirely.
Just keep in mind that may not be able to withdraw your initial investment rapidly, if at all, depending on how you invested it so if you have a serious “oh shit” situation that might present a snag.
You should treat job loss as serious as any natural or man-made disaster. Loss of income, for most people, lead to serious financial turbulence and bankruptcy or potential homelessness in very short order.
For this reason, you must prepare against it just like you would anything else. Luckily for you, preppers already have all the advantages when it comes to preparing against the unforeseen. Use this article as a guide to prepare your defenses against sudden job loss.
Charles Yor is an advocate of low-profile preparation, readiness as a virtue and avoiding trouble before it starts. He has enjoyed a long career in personal security implementation throughout the lower 48 of the United States.