According to a recent Gallup survey, 6 in 10 of us expect unemployment to rise in 2026. That means that 6 in 10 of us are likely anxious about our jobs.
Deep breath, my friends. Worry is human. The challenge I hope you can meet is to take steps now to be as prepared as possible for whatever comes your way. When we hope for the best but plan for the worst, we are doing everything we can.
Whether the economy takes a downturn or not is out of your control. But what is in your control is whether you are prepared for a layoff.
Here are three steps you can focus on right now, rather than just worrying.
1. Bulk Up Your Eight-Month Emergency Fund
You know my rule: I want you to have eight to twelve months of living expenses in a liquid, savings account. In a generally healthy economy, the average job search takes about five months. But in an economy with rising unemployment? That timeline can stretch much longer. And for those of you over age 50, listen to me: it can take weeks or even months longer for older workers to land a new role compared to younger coworkers. You need a bigger cushion because your search might take more time.
2. Reduce Your Spending.
There is never a bad time to take my “Wants vs. Needs” challenge. But if you are worried about your job, going through all your spending to find ways to save is going to pay off not just in building financial security, but also make you feel stronger for taking control of what is clearly in your control. This isn’t just about reducing or eliminating spending on wants. You should also look at your spending on basic household needs. Can you find a way to reduce the cost of those needs?
As you find ways to save money, please be deliberate in what you do with that savings. Building up emergency savings is always at the top of my list.
3. Prepare for Higher Health Insurance Premium Costs
If you are very concerned about a job loss, I want you to plan for the potential big cost of much higher health insurance premiums.
Please don’t think you have nothing to worry about, because you understand your current employer will have to continue offering you the same health insurance plan after you are laid off. Technically, that is true. Any employer with at least 20 employees must follow federal rules—known as COBRA—and continue to let a laid-off worker (or someone with sharply reduced hours) continue to use the health plan.
COBRA health insurance from a former employer typically lasts for 18 months. But, there’s a huge catch: your employer will not pay a penny of the premium cost for a laid-off worker. You will be responsible for 100% of the monthly premium cost if you continue to use the employer plan after a layoff. And sometimes laid-off workers are charged 102% of the premium to cover “administrative costs.”
I recommend finding out what 100% (or 102%) of your premium cost would be if you are laid off. Then I want you to check out what insurance through the federal ACA program would cost. (You can start your search at healthcare.gov) and get a sense of what your cost might be for coverage through your state’s plan. Remember, as of this January, Congress sharply reduced who is eligible for federal assistance to pay ACA plan premiums.
Once you have a sense of what your health insurance premium costs could be if you are laid off, you can think through if you want to add to your emergency savings today. Now is the time to prepare my friend.
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