I started my career in 1991, fresh out of graduate school. It was during the Gulf War, and many companies were not hiring during that period. Most people I knew in my MBA program did not have jobs secured at graduation, unless they were already employed and were attending school part time. The economy was nothing like it was in the 70s, but still not the best.
In July of 1991, my husband and I started work right after we returned from our honeymoon. We had two incomes, no kids, but quite a bit of debt from student loans and from the wedding. (Side note: NEVER go in to debt for a wedding. If you can’t afford a sizable wedding, just make it small, regardless of what you think is expected. Your cousins that were not invited to your small wedding will forgive you.)
Anyway, we lived in an apartment while we worked hard to pay off debt and save up for a down payment. After we were married two years, I was pregnant and we started looking for starter homes. I truly mean a starter home too, not like what you see couples on ‘Property Virgins’ looking for, with a ‘man cave’ and totally renovated kitchen. (You can read about my hatred for the term ‘man cave’ in a later post.) We knew our upper limit was $100,000, and we didn’t really want to spend even that much.
Workforce Reduction? What Is That?
The day after we signed an offer on a house, my employer started their first workforce reduction program. I was scared out of my mind. I had limited seniority, I was pregnant, and we had just bought a house. I had no idea what we would do without my income if I got ‘reduced’.
After a few days, all the firings were done, and my job was safe for awhile. However, the memory of seeing people literally handed a box and escorted to their cars will always be burned into my mind. From that point forward, every few years there would be a mass firing, and you never knew when it would be. In recent years, the firings have been almost monthly in some companies, if not quarterly.
However, these initial firings caught a lot of people off guard. Many people I knew had gone their entire careers without seeing massive (white color) layoffs until that fine day in 1993. Sure, underperformers were let go, but that was to be expected. Many employees had structured their lives around having two incomes, and why not? Jobs just were not at risk as much back then as they seem to be now. The business world was not nearly as global, so competition was much less. People could expect raises, bonuses and job security. Now, other countries are willing to do the work for much cheaper, and suddenly, many jobs, and almost entire sectors, have gone overseas.
Watching this transforming of the work force happen while I was early in my career made a huge impact on me, and it was a positive one. I learned that I would NEVER count on two incomes again, and that you should always be prepared to be let go. I found out that nothing gives 100 percent job security. I have seen experts in their field let go, probably because they made too much money.
Lessons From Today’s Economy
Quite often, people learn best from adverse circumstances. Perhaps it is because it is easy to get complacent when things go well year after year. However, with all these little shocks our economy keeps getting, it should teach people the following:
- Never turn down a potential job interview (unless you fear your current employer will find out and fire you).
- Always have your resume updated, especially after major projects so that your accomplishments are fresh in your mind.
- Diversify your investments. Who would have ever thought gold would be where it is today? If you had some money in stocks and gold, your losses would be minimized somewhat.
- Always learn. Even though complete job security may be impossible, it doesn’t hurt to be considered an expert in your field.
- Live on one income if at all possible. When looking for a home, base the mortgage amount on what you could afford with just one salary.
- Don’t give up. If you do lose your job, seize the opportunity to pursue what you really want to do if possible. Some unemployment benefits will actually cover part of the cost of schooling, so take advantage. Don’t just sit around the house depressed. Interview and educate instead.
- Admit your mistakes and move on. I am sure many people are frustrated with the performance of the stock market and may be mad at themselves for how they have invested. Learn from these events and take action if necessary.
- Take a look at your entire financial and ‘life’ picture and evaluate what changes need to be made. Have an open mind and don’t make excuses just because there are things you don’t want to give up. Sacrifice is hard and often necessary, and if you start acting now, you will be better able to handle any negative events that may happen down the road.
- Diversify your income. Always look for opportunities to make money doing other things. Think about something you have always wanted to try and see if you can find a way to produce income doing it. With the internet, the possibilities are endless. You could be a freelance writer, sell on Ebay/Amazon, perform video editing, who knows! (Thanks to Kevin at Out of Your Rut for reminding me that income diversification is very important, especially with such an uncertain job market.)