Financial advice

We are all aware of the economic situation in our nation and many of us have been affected by it. I for one have noticed at my work already measures to cut costs, which have fortunately not resulted in layoffs so far. For many companies it isn't a matter of if, but when.

For example, rumor has it that Microsoft intends to layoff up to 15,000 employees this month marking the first layoffs in Microsoft history. There are many other tech companies that have already laid off a significant portion of their staff. Forbes even has their own layoff tracker. For a more detailed account of companies, TechCrunch has a more detailed layoff tracker.

I am sorry that I had to post some grim news about the job market, but my point is that everyone needs to have their finances prepared for any unfortunate circumstance including layoffs. If you are prepared, you will be in a much better position financially until you find another job. If it takes a lot longer to obtain your next job, it is possible to still survive with a positive credit history.

The first thing you should consider is your company's severance package and take that into account when you plan for a rainy day. Many jobs won't have anything or something very limited, so it is good to know exactly what you are going to get.

According to many financial sources, it is very important to establish an emergency fund. This basically entails a savings of 3-6 months of expenses. For many, this might range from $1,000 to $10,000. Everyone has different needs, so it is up to everyone to choose what fits.

Upon being laid off, your emergency fund will cover your expenses for awhile. It can last even longer if you take an active measure of cutting your expenses. The Consumerist Blog has a post on this matter titled, "Top 9 Good Habits For A Deep Recession." These tips are very helpful in determining how your are spending your money regardless of your employment status.

Lastly, if you need help determining your financial situation, take a look at mint.com's free personal finance software. This application works over the Internet and helps you do things like paying off your debt and tracking your finances. It even has programs to help you pay off your credit card debt, which I strongly recommend.

If you want to learn more about cutting expenses, try reading a book entitled, "How to Survive Without a Salary: Learning How to Live the Conserver Lifestyle." It is sold very cheap used online and has been recommended by a friend.