In times of economic uncertainty when job security is always under threat, all employees, no matter how high up the corporate ladder you stand, are better off to prepare for job loss. There's nothing wrong with preparing for the worst, and you are not overreacting. After all, losing jobs has become an everyday thing among even the largest and deep-rooted corporations.

Since the global crisis hit, millions of employees the world over have been laid-off and thousands of companies are forced to close down due to staggering losses in a span of a few years. This scenario should send shivers down the spine of all employees. Yet, panic should be the last thing on your mind. Coping is much easier if you know how to prepare for job a job loss, so take action today.

How to prepare for job loss

1. Begin by increasing your cash reserve. The old adage tells us to save, at the minimum, three to six months worth of living expenses as your cash reserve - three months if there are two income earners in the family, and six months if you're the only one. However, when the economy is too tight, most people are able to find a job after two to three months, so you might want to augment your cash reserves with two months more worth of living expenses.
   
   
2. Prepare for a job loss by updating your resume. You need to be immediately ready to find a new job in case you are suddenly laid-off (read separate article on how to cope with a layoff). Thus, start checking back on your resume and add information up to the latest details. Focus on the skills you obtained from your present job and discuss what qualities you earned from it.
   
   
3. Look for a personal insurance you can afford. There are many employer-provided insurance policies can be continued even after your severance with the company. However, make sure you can afford the annual premium when converting it to personal use.
   
   
4. If you have pending balance on your credit card, talk to the credit card company today and tell them you are possibly facing unemployment and need to work out a payment plan as well as other payment alternatives. Many credit card companies would be willing to work with you if take the first initiative.
   
   
5. Create a living expense worksheet. Note down everything you spend on starting now, and do this until you're able to identify your spending trends. Then find out where you can improve on and cut back on unnecessary expenses. Knowing how much spending is enough will help you determine the amount of money you need to spend should you lose your job.

Having a clear plan of what you are to do when preparing for job loss is pivotal to a smooth transition and coping period. The more prepared you are, the easier you can get along with sudden turn of events in your employment.