Job Loss - Plan B - Don't wait for it to happen.

No matter how long you have been at a company, or where you are in your career, losing your job is always a possibility with full-time employment. Have you established a Plan B source of income? Have you thought about what you would do if you lost your job in today's volatile and uncertain economy? Personally, I believe everyone should have at least one part time, self-owned business. Just the tax benefits alone can be worth having your own part time business. Schedule C, from the IRS, allows you to write off a lot of various expenses from a sole proprietor business that you would never be able to claim if your only source of income is from a W-2 job as an employee. Almost everything can be applied to your businesses; write off meals, travel expenses, phone, internet, utilities, stationary, uniforms, business wear, and work clothes. This significantly reduces the taxes that you owe each year. Are you able to claim all of those things with your current W-2 job?

Diversify Income:

Whether it's because of industry changes, market or general economic downturns, or a disagreement with your boss, the impact of losing a job can be devastating. How can you protect yourself financially? One way is to diversify your sources of income. A diversified income has more than one source, similar to a diversified investment portfolio. The same idea of spreading your exposure can also apply to the ways you earn money, even while holding down a full-time job. Whether you are early in your career, are thinking about leaving a full-time job to start your own business, or nearing retirement, there are plenty of ways to diversify your income. It also helps that income sources are in different markets (for example: real estate, food, healthcare, etc.) so that, if one market of income dries up, another market will flourish. Research more on this topic.

Do you have a hobby that you can turn into a business? Have your ever had an idea you feel could make honest money? Don't put it off. Start now. You don't need to dump a lot of time or money into your idea to start. Start small and slow but be persistent and don't give up.

Find something you like and pursue it. Even though you may not have the experience, or there may not be much money to be earned, in what you like and want to do, the better you become, the more money you can earn. There are many business ideas and opportunities that can be found on the internet. Be careful, however, because there are also a lot of scams. Do lots of research before investing your hard-earned money.

Don't delay. Start now. Even if you don't lose a job, you can earn extra income on something you like to do and, if you do lose your job, you will have established a business that may be able to sustain you.

Working "Under-The-Table":

This is not a wise thing to do, mostly because it is illegal, but also that it can affect your retirement funding and general peace of mind. Most people see only the "immediate gratification" of getting money in hand but don't look at things long term or, even, the potential negative consequences. Working "under the table" generally implies that you are being paid out of pocket and not documented. It can be illegal and devastating for the employer and the employee. For the 'employee', payment of back taxes could come due, but qualifying for government benefits may be out of reach as well as saving for retirement and other advantages available to 'legal' workers. For employers, if an official W-9 and 10-99 is not submitted to the IRS on behalf of the 'worker', a loss of licensing, fines and also back taxes could come due. Bottom Line: DON'T DO IT, as a worker or as an employer. It will, eventually, come back to bite you; most like at the most inappropriate time. Read more at Getting Paid Under the Table.

Best Wishes!

SEE ALSO:
Dealing with Job Loss on the Homestead
Retirement Planning Starts at Age Zero
Debt: GET OUT NOW
Minimalist Living
Bartering: A Skill Worth Learning
Taking Charge of Finances
How to Survive WITHOUT A salary