58% of Americans Think They May Lose Their Jobs in the Next 6 Months. Make This Move if You Feel the Same
- If economic conditions decline later this year, unemployment levels could rise.
- If you're worried about job loss, make sure to set yourself up with enough money to cover your expenses in the absence of a paycheck.
It's a really important step to take.
Is a recession about to turn the U.S. economy upside down? That's a possibility we can't ignore.
As the Federal Reserve moves forward with interest rate hikes in an attempt to slow the pace of inflation, consumers have the potential to start spending less as borrowing gets more expensive. That could lead to a broad economic decline -- if not later this year, then at some point in 2023.
Not surprisingly, 58% of U.S. workers report being worried about potentially losing their jobs over the next six months, according to a recent ResumeLab survey. Only 22% of current workers think it's unlikely that they'll lose their jobs within the next half-year.
If you're concerned about job loss -- whether due to a potential recession, being new at your place of work, or another reason -- then it's important to do what you can to shore up your savings. Having a solid emergency fund to fall back on could spell the difference between racking up debt in the course of being unemployed and managing through a period of joblessness unharmed.
Boost your savings while you can
If you were to lose your job through no fault of your own, there's a good chance you'd qualify for unemployment benefits. But one big misconception about those benefits is that they'll provide enough income to replace your missing paycheck in full.
The harsh reality is that all states impose a weekly maximum benefit that may not cover even so much as half of your paycheck, if you're a higher earner. And if you're an average earner, you still shouldn't expect to get by on unemployment income alone.
That's why you need a strong emergency fund -- to cover your bills in the absence of a paycheck. And so if you don't have enough money in your savings account to pay for at least three months' worth of bills, then now is the time to start boosting your cash reserves.
In fact, a three-month emergency fund is really the minimum you should have. If you lose your job during a recession, it could take four, five, or six months -- or longer -- to become gainfully employed again. And you'll need enough money in the bank to account for that.
How to grow your emergency fund
Boosting your emergency savings isn't necessarily an easy thing at a time when living costs are soaring due to inflation. But if you take a closer look at your spending habits, you might manage to identify a few expenses you can cut back on. That could mean dining out a little less often, or canceling a monthly subscription box you don't get a lot of use out of.
Picking up a side hustle is another great way to boost your savings. In fact, if you're able to earn enough additional income, you may not need to cut back on spending at all.
No matter what steps you take to shore up your emergency fund, don't wait too long to do it. We don't know when economic conditions will deteriorate, but the sooner you prepare for that possibility, the better shape you'll be in.
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