Preparing for the Down Economy

by Tony Chen 

Here's what we have to look forward to in 2009: deepening recession, international political instability, lots of high-profile bankruptcies, and an estimated 1 million pink slips.  All we can do is take a deep breathe and focus on what we can control.  Here are 20 things we dads can do to prepare our families for the times ahead.  Time to get in touch with your inner eagle scout.

The Work Front:  No one is safe, right?  Every week, I'm hearing about friends of all professions getting laid off.  The experts that keep track of this stuff say 60% of companies plan on laying people off in 2009 (compared to ~50% in 2008).

1. Refresh the resume.  There's plenty of resume advice out there, but the best thing I've ever done is to constantly refresh two versions of my resume -- my one-pager and my everything-I've-ever-done-resume.  No one sees the latter except me, but it helps me document everything I've ever done.  Then I can easily emphasize different parts of my experience on my resume for different job searches. Cataloging everything regularly helps me remember all the things I did. 
2. Network - Everyone knows to do this, but you can be in the 5% of folks who actually follow through.    Make a list of 5 people to reconnect with in the next month and go meet up with them for lunch, coffee, or a quick "happy new year, how are you?" call.    As of late, I've been meeting a ton of people through my LinkedIn profile - there are a lot more friend of friends that have common career, professional, and project interests than I would think.  A LOT more.  
3. Tidy up Your Online Persona Speaking of LinkedIn, this profile is your online resume, your professional homepage.  Take some time set up your profile and maybe get some former colleagues to write you a glowing recommendation.   Especially if there are er... new years party pictures of you on Google searches, this is a good way to move that stuff lower and out of sight from potential employers googling you.  If that doesn't work, change your name to "John Smith" and you'll be covered.
4. Surf the job boards, even if you're completely happy with your job and not looking.  I've found some good companies, salary information, job opportunities by casually surfing and saving all of it for a rainy day.  Sure, the position would be filled by then, but you'll have a better sense of what the next steps might be when you're ready to make your move.
5. Become indispensable. Oh, I mean, less dispensable.  In your current role, are there new projects to volunteer for, areas you see that could be improved, customers that you can win back?  One rule of thumb: the closer you are to the customer (and the revenue), the better.
6. Learn a new skill.  You're a waiter? learn how to roller skate.  You're a financial analyst?  Become an expert on financial software packages.  You're a salesperson?  Pick up some accounting.  Too boring?  Then, learn something you love, regardless of how "marketable" it is.  It's fun, and experts and neurologists agree that it keeps your mind sharp and more creative.  Hey, someone has to play the accordian.
7. Don't go negative.  This is the best way to get fired.  Be a pain at work.  Complain.  Talk negatively about co-workers.  It's obvious, but how many of us immediately think of someone in our office right now who's fueling their own good-bye?
8. Get certified.  Get a certification for your industry and/or your functional expertise.  It's usually just a matter of attending some seminars (see #2 above) and taking a test.  For me, I've gotten to know some great people that have led to lots of project, professional, and job leads.  Being certified, as cheesy as it may be, is a great thing to have in common.
9. Take this tough time as an opportunity.  If you're running a small business, this may be the perfect time for recruiting some great talent (lots out there right now!), going back to the basics, and rethinking your business.

The Money Front

1.  Fluff up the cushion.  Most financial experts say we should have an emergency fund that would cover 3-6 months of expenses.  Whether you're in debt or all saved up, now would be a great time to beef it up and grow it to 12 months.  2.3 million people have been unemployed for more than a year.  Such are the times. 
2. Cut the fluff, i.e. all unnecessary expenses. BankRate has a great article with 100 ways to save money.  WSJ lists 7 small buys that provide major returns.  A few bucks a day adds up pretty quickly. 
3. Get your money into an internet bank.  One reason: higher interest rates.  ING or Emigrant.  These companies don't have to pay rent for physical bank locations and can pass that savings onto you.
4. Refinance.  Rates are down and will probably go down some more.   There are plenty of good brokers out there who will waive the fee, so you can basically refinance by just spending an hour signing papers. 30-year loans will probably go down to 5%.  If you don't own a home, it's a buyer's market.
5. Invest.  Maybe this is a good time to make some investment in beaten down stocks.  Fortune has featured 10 stocks to buy right now.  And specifically, maybe this is a good time to add an additional plug of money into junior's 529 plan.  Short-term volatility doesn't matter, as we won't be touching that money for 15 years. 
6. Find ways to pick up some extra cash.  Any freelancing gigs?  Part-time/weekend gigs?  Is it time to sell off those baseball cards or those books from your disheveled, dusty bookcase?  Time for some ebay and amazon selling.  

The Family Front:  In times like this, some experts say to forget about work/life balance.  Maybe that's okay for a time, but "maybe next week, junior" turns into next month and then next year pretty quickly.

1. Teach in this teachable moment.  They won't fully understand, but it's good for them to know that it's not just up, up, and up.  Maybe this is also a good time to bring them down to the local soup kitchen to volunteer.  They'll see with their own eyes that happiness in life doesn't have to be tied to what's going on financially and materially.  I sometimes wonder why I've seen so much more deeply-rooted joy in kids I've met in Haiti, Native America tribes, and China, versus here in America?
2. Head to the library.  Family time doesn't have to be expensive.  And yes, libraries are making a wicked comeback. 
3. Talk to your wife about the contingency plan.  If you got laid off, obviously you would get really stressed, depressed, demotivated, and lost.  Money, family, house, kids can sometimes hang in the balance - this is heavy stuff.  Having an agreed-upon plan in hand will give everyone the motivation and purpose to  keep on keeping on and to avoid a lot of resentment and anxiety.
4. Make exercise a family activity.  In our constant go-go-go society, we are actually doing ourselves a disservice by not taking care of our bodies.  Taking the time to sharpen the saw allows you to give your best to your family and work.  Even if they don't realize it yet, our kids are watching how we handle this.
5. Take a savvy family vacation that won't break the bank.  Check out this MSNBC article on 20 recession family travel rules.  Now is always the best time to enjoy the family.  Man, they grow up quick, don't they?
   

Are you ready to take on 2009?  Would love to hear your ideas on how you and your family are preparing for the shaky times ahead.