In this series I am covering the 24 tell-tale signs that you could be in financial trouble. Over the next few weeks I will be presenting these signs, how to identify them and tips on how to address the issue.
Looking at our financial situation typically has to do with outflow of money or returns on money we already have. What is often overlooked is the importance of income. Without income none of the aforementioned items will even matter. Outdated job skills or lackluster performance can impact income or even eliminate it altogether which is why it is a sure sign you may be headed for financial trouble.
If you do not regularly monitor your job skills, performance and job security, you will likely have an unexpected problem at some point in the future. Business is competitive and if you aren’t living up to your expectations or find yourself in an industry that is declining it should be no surprise that you could potentially be without a job. When that happens it can take months to find replacement employment.
Start by taking a look at your job skills. Would you hire someone with your job skills to do the job you’re doing? Are you current with computer and other technical skills required for your job? Do you need more training? Does your job require specific certifications? Your career isn’t static and the tasks you need to complete are always changing. Your employer will generally offer basic training required to do the job but above and beyond that it may be up to you.
Some employers even offer reimbursement for outside training so that is the first place to look. Other times it may be out of your own pocket and you need to consider the benefits of additional training. Would obtaining that certification or touching up on certain industry skills make you more valuable to the company? These small improvements to your skill set may be the difference needed to keep your job during a downsize or losing it to a new college graduate who is current with the latest skills.
This area can be a bit subjective but take an honest look at your performance. Put yourself in your supervisor’s chair. What kind of review would you give yourself?
- Do you show up on time?
- Do you do all that is asked of you?
- Is your work completed by the deadline?
- Do you put in an honest day’s work for an honest day’s pay?
- Do you cut corners?
- Do you like your job and does it show?
Job performance is more than showing up, doing what is required without messing up and then going home. If you are familiar with the movie Office Space you probably remember the manager at the restaurant requiring the servers to wear a certain amount of “flare” on their uniform. The manager regularly addresses Jennifer Aniston’s character for wearing only the minimum and encourages her to wear more like her co-worker. She later proclaims that if he wants everyone to wear 38 pieces of flare to just make the minimum 38.
The point is, yes you can only do the minimum and still maintain your job but is that really what you want to do? You don’t have to be over-the-top and obnoxious about doing more than the minimum like the waiter with a million pieces of flare but your boss will notice if you do a little bit more. On the same token you will also be noticed if you are known for just doing the minimum when the company is looking to cut costs or introduce new talent.
This one can be harder to examine but it is important to understand your true employment situation. Are you working in an industry that has been facing hard times recently? Are you in a rapidly expanding industry? Aside from the broad economic aspect take a look at your individual employer. Is the company operating at a profit? Is the company local, national or global? What are your chances of advancement within the company?
These questions can paint a picture of how secure your job actually is. Clearly there will always be unforeseen circumstances that can make even a seemingly secure job become obsolete, but by understanding where you stand can give you an edge in spotting potential troubles.
Have a Backup Plan
You need to have a backup plan in the event your source of income is drastically reduced or eliminated completely. What this means is to have a course of action established to minimize the impact of this situation as little as possible. The first thing you should be concerned with is your emergency savings. Ideally you would have enough money saved up to continue paying the bills for a few months with little or no interruption. Unfortunately this isn’t always the case.
Next, have a plan for getting back to work as quickly as possible. Keep your resume updated. The last thing you need in the event of a job loss is spending the better part of a week trying to write a new resume from scratch before even being able to apply elsewhere. Being prepared will allow you to get into the hunt for a new job as soon as possible.
Finally, it is important to maintain contacts. Keep the numbers of old co-workers or acquaintances that could have an inside track to open positions. These people could be your best resource when it comes to finding a new position. They know you and what you’re strengths are and can be great referral sources.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.