I was a layoff casualty. Now what?
Your boss just told you the bad news—you’re one of a handful of people to receive a pink slip. You may feel depressed, angry, emotional, or completely numb. But the first thing you should remind yourself is to not take it personally.
Layoffs happen in the course of business. In this tough economic environment, you are not the only one to receive the bad news. There are a variety of factors that culminate in layoffs, and most of which are probably outside of your boss’s control.
Keeping a cool head and remaining professional not only can be beneficial to your mental state, but can also ease the financial pain later on.
Arguing, starting a tirade, or becoming overly emotional can quickly burn bridges and bring negative consequences for your next interview. Word travels fast among the human resources departments of major companies, especially companies in the same industry.
Also, keep in mind that your boss probably was not the ultimate decision maker, and it helps to maintain professionalism and sound judgment. Your severance isn’t likely etched in stone, so how well you carry yourself as you exit could play a role in how much benefit you receive.
Be frank with your boss in discussing severance—including details about your personal situation and your family. Is your spouse working? If not, see if you can stay on the employer’s healthcare benefit a while longer. Many companies typically pay severance based on tenure. But if you are up there in age and fairly new to the company, is it fair to assign you the same severance pay as someone who recently graduated from college and came to work for the firm?
Remember, fairness, honesty, and sincerity always goes a long way in navigating difficult situations.
Home prices are dropping. Is it time to buy?
According to the latest S&P Case-Shiller Home Price Index, home prices nationwide are nearing 2004-levels. This begs the question, is it time to buy?
The answer is: it depends.
If you have extra money lying around and near-term job security, analysts agree that it is a good time to buy. Mortgage rates have already come down dramatically, but home prices should—and will—fall further. However, if you are in position to purchase right now, or have been waiting to purchase, there is no reason to wait.
On the other hand, if you are looking for investment property or are seeking a second or third home, you should probably wait a while. Economists expect housing prices to fall further until at least late 2009, and the economic benefits of owning such properties likely won’t be realized in the near future.
The markets are battered. Where should I put my money?
Your stock portfolio probably took a beating within the last six months. You may have cut your losses already, or have taken money out of the market completely—but whatever you do, don’t stash it under your mattress yet.
If you are like most Americans, your appetite for high risk-high reward investment vanished amidst the bank failures and deluge of unemployment news.
Some investors turned to U.S. treasury bills, but the rates for treasuries are near zero. A recent article in Kiplinger’s magazine recommended putting money in certificate of deposits (CD). CDs have interest rates far higher than treasury bills with the same security and peace of mind—all CDs up to $250,000 are guaranteed by the FDIC.
The FDIC guarantee ceiling was raised from $100,000 to $250,000 last fall, and the limit will revert back to $100,000 on Jan. 1, 2010. If you want to put in more than $100,000 in CDs, consider splitting the savings into CDs at different banks.
If you want to take some risk, some analysts expect commodities and hard assets—especially gold—to prosper in the long term, given all the currency the Fed is currently printing to hand out as corporate bailouts. The U.S. government is currently borrowing billions of dollars to pay for financial bailouts. Recent Fed actions could lead to a weakening dollar and higher inflation in the long run, driving up the value of commodities.