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10 steps to feel financially secure
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November 2, 2001: 6:37 p.m. ET
If you're worried about your job, here are ways to shore up your finances.
By Jeanne Sahadi
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NEW YORK (CNNmoney) - Unemployment soared in October to 5.4 percent, and the number of layoffs year-to-date has been nearly twice that of any year since the late 1980s. Like many people in this environment, you may be wondering if your job is at risk.
Whether yours is unfounded worry or legitimate concern based on a cold-eyed assessment of your employer's prospects, you can take steps now to feel more financially secure no matter what happens.
10 things you can do now
Cap your holiday spending. "Make your list and check it twice," said certified financial planner Chris Cooper of Toledo, Ohio. In other words, set price targets for the gifts you plan to give and don't violate them.
Don't splurge on big purchases. Distinguish between the real essentials in your life and those things that are nice, but not necessary. A car may be essential, but a Lexus probably is not.
Take full advantage of current job benefits. Now may be the time to get that dental work done or have your eyeglass prescription filled, since you're covered by company insurance. It's also the time to take advantage of tuition reimbursement for courses that upgrade your job skills, said John Challenger, CEO of outplacement firm Challenger, Gray & Christmas. It could save you a bundle down the line.
Refinance your mortgage. Mortgage rates have been dropping and you may be able to save a good amount of money if you secure a lower interest rate on your home. Be sure, however, to weigh the cost of refinancing with the savings you'll see. (For help, use CNNmoney.com's refinancing calculator.)
Get a lower credit card rate. If you carry a credit card balance, but you've paid your bills on time for the past 12 months, you may be able to get your interest rate lowered simply by asking your credit card company. (Click here for more strategies on lowering your credit card rate. And for other tips on managing your debt, see Money 101: Controlling Debt.)
Step up payments on a 401(k) loan. Should you lose your job, any 401(k) loans you have will come due in full. If you can't pay them off, they'll be treated as a distribution, subject to income tax and a 10 percent penalty if you're under 59-1/2.
Budget for now and later. Now's the time to figure out where your money is going, and to curb unnecessary expenses. Also, estimate what your cash flow might be if you were laid off -- including severance or unemployment payments. To bolster your savings, you might even practice living within those means for awhile while you're employed and sock away what you don't spend.
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CNNfn's Valerie Morris shares job-hunting tips for a tough market.
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Come up with Plan B. If you think you may be laid off soon, "start exploring part-time work now," said certified financial planner Paul Hrisko of Cleveland Heights, Ohio. The same goes for a stay-at-home spouse if you have one. In a layoff situation, part-time income may be enough "to stave off the wolves" until you find full-time employment, Hrisko said.
You might also start a search for a full-time job. (Remember to save all receipts for the expenses you incur. They're tax-deductible.) If the work you do is such that you're easily replaceable or you work in a narrow field for which there is decreasing demand, think broadly about what else you might do -- and get the needed training, license or degree to make you more marketable, Cooper suggested. "More than ever, people need to think outside the box," he said.
Get career insurance. The broader your network, the better the chances of landing a job when you need to. That's why Challenger suggests people get involved with professional and industry associations. "It's through those relationships that people make the best moves," he said. "Build your social capital."
Set aside an emergency fund. Put three to six months' of expenses in a savings or money market account, and don't forget to budget for the costs of a job search. Job search time after a layoff increased to 3.04 months in the third quarter, up from 2.07 months in the second quarter, Challenger said. That's still below the historic norm of 3.2 months. But, he added, "I think it's likely to get worse before it gets better." 
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