Recently, a well established British company called its nationwide sales staff for an unplanned meeting and fired most of them as soon as they arrived without any warning. A lot of those who were fired were devastated and reportedly returned home in tears. Apparently, they didn’t have a backup plan because they had never imagined something like that would ever happen to them. This incident shows how important it is for everyone to have a backup plan in these economically uncertain times.
So what is a backup plan? Basically, it is a plan for an alternative course of action in case things do not go your way. It gives you something to fall back on and a chance to start all over again or to give your life a completely new direction. It ensures that you will not have to end up in the streets or hand over your children to foster care in case you lose everything you have. It makes sure that you will have enough to feed your family, pay your monthly bills and repay your debts.
Here is a backup plan (or Plan B) that you could use as a model for your own backup plan if you lose your business or job:
Save a portion of your income for a rainy day: When times are good, make sure to set aside a portion of your income for a rainy day. Having enough money to pay your bills and your debts makes life more bearable in times of hardship. If you have large enough savings, it gives you something to restart your life with. I would say 6 – 12 months worth of expenses.
Practice living within a budget: When money is flowing in, it is easy to get carried away and spend extravagantly. But you should never forget that good times do not last forever and there may come a time when you will have to count your pennies, so create a monthly budget and learn to live within it. It will help you to make a painless transition into a life of reduced income.
Invest in a side business or find a part time job: If you have some money or an additional skill, invest in a side business or find a part time job. Having an alternative source of income, however little it may be, makes the prospect of suddenly becoming unemployed less bleak. With a business or job already in place, you will find it easier to rebuild your life.
Develop a hobby and learn new skills: The process of learning should not end until the day you die. Develop a hobby, such as cooking, and enroll in training courses and programs. Many people who have lost their job or business have found great success with the skills they have learned as a hobby.
How about you, what’s you back up plan?