Maintaining financial stability after job loss is one of the biggest challenges a Richmond family can face.
In an ideal world, our careers would be a straight path of consistent income and steady growth. But life often has other plans. A sudden job loss or an unexpected financial setback can be a stressful event that puts your entire financial life in jeopardy.
While you can’t predict the future, you can prepare for it. At Vernon Management Group, we believe that building financial stability isn’t about avoiding risk—it’s about having a strong safety net. Here are some key steps you can take to prepare your finances for the unexpected.
Step 1: Build a Robust Emergency Fund
This is the foundation of your financial stability. An emergency fund is a savings account with money set aside for unexpected life events, such as a job loss, a medical emergency, or a major home repair.
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How much should you save? A good rule of thumb is to have at least three to six months’ worth of essential living expenses saved.
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Where to keep it? We recommend a high-yield savings account that is easily accessible. We frequently utilize Charles Schwab as a custodian for these types of liquid, cost-effective options.
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Your First Line of Defense: This money allows you to cover your basics while you figure out your next steps without the stress of wondering how to pay the bills.
Step 2: Tackle High-Interest Debt
Carrying a large amount of high-interest debt, like on credit cards, is a major vulnerability. It can drain your cash flow and make it difficult to save or cover expenses during an income disruption.
Make a plan to pay down this debt. By eliminating these high-cost obligations, you not only save on interest but also free up more of your monthly income, giving you greater financial flexibility.
Step 3: Create a “What If” Plan
Think of this as your financial contingency plan. Having a clear plan can prevent panic and help you make smart, rational decisions during a stressful time. Your plan might include:
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Reviewing your expenses: Identify areas where you can cut back immediately.
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Assessing your income sources: Do you have a spouse’s income, rental income, or any other sources you can rely on?
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Understanding your benefits: Know what severance package, unemployment benefits, or other assistance you might be eligible for.
Rusty’s Reality Check
I’ve seen it time and again: the people who navigate a job loss with the most grace aren’t necessarily the ones with the biggest paychecks—they’re the ones who took the time to build a safety net when things were going well. Stability isn’t a destination you reach; it’s the preparation you do along the way.
The Steady Hand Advice Life is full of twists and turns, and while we can’t control every outcome, we can control how we prepare. Having a solid financial plan is the key to weathering any storm. At Vernon Management Group, we act as fiduciary advisors, which means we must legally and ethically put your best interests first.
We can help you build a plan—one that gives you the confidence and security to face the future with peace of mind.
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FAQ: Planning for the Unexpected
How does VMG’s fee-only structure help me during a job loss? Our fee-only structure ensures that our compensation is tied to your investment success, making our advice unbiased and focused entirely on your growth and stability.
What are my options if I am self-employed and my income drops? Plans like the SEP IRA are easy to maintain and offer flexible, employer-only contributions that can vary yearly based on your performance.
Where is Vernon Management Group located? Our office is located at 3200 Lauderdale Dr #103, Henrico, VA 23233. You can reach us at (804) 683-8479.