How IT Professionals Can Financially Plan During the Recession | Finance

Financial advisers who work with tech professionals say their clients’ moods are gloomier because the bull market is firmly in the rearview mirror. Many tech workers are worried about what’s next.

In the current environment, hundreds of tech companies are downsizing, stock options are “under water,” and many employees face uncertain career prospects with their current employers, not to mention other potential employers.

If you’re worried that your employer may be laying off staff soon and wondering if your job won’t end up on the chopping block, there’s plenty you can do now. Here’s how to reduce your risk and lessen the impact of a layoff, should that risk become a painful reality.

“Keep your powder dry”

One of the first things to do is to identify all your financial resources that could help you make up for a loss of income for a few months. The longer your “track” to getting that next job or your first business income, the less stressful it will be. And the more time you can spend searching without compromising on what you want and need.

Many financial advisers agree.

Darryl Lyons, CEO of PAX Financial Group, said: “Tech workers need to review their budgets and ensure they have enough cash reserves to handle a transition to a new job. Don’t be in a position where you feel financially obligated to take a job you don’t like.

Marianne M Nolte, Certified Financial Planner at Imagine Financial Services, said: “This is a perfect example of why advisors recommend having an emergency fund. It’s not (only) to cover the cost of a new set of tires or an unexpected visit to the hospital. This is also for layoffs. Most certified financial planners recommend setting aside three to six months of expenses in a liquid emergency fund. In times of economic uncertainty, it’s best to err on the side of caution and stash six full months of expenses in your emergency fund.

In addition to keeping your emergency fund dry, look for ways to diversify your income, such as starting a side hustle. This extra income will help you extend your financial trail and stay sane despite the stress of possible job loss.

“Sharpen the Saw”

Stephen Covey’s famous book, “The 7 Habits of Highly Effective People,” ends with this warning as the seventh habit: “Sharpen the saw.”

In today’s environment, you need to keep your professional skills up to date and look for opportunities to learn and train in new relevant skills. Also, take on additional roles and responsibilities at work that will compound the impact of your loss on your employer. It makes you more valuable to your current employer and looks attractive to future employers, should your current job disappear.

As Michael Reynolds, Principal at Elevation Financial LLC, said, “Identify the most in-demand new skills and technologies and earn certifications in those areas. Take classes to add to your skill set. Sharpening your skills can help you not only improve your chances of keeping a job, but also create more opportunities if you start looking for a job.

Network proactively

When networking, focus on listening rather than talking. Be curious about what your fellow professionals need, what excites them, and why they are afraid. Then send them relevant articles or other resources. Finally, connect them to others in your network who can help them or whom they can help.

Do these things without worrying about how they might benefit you.

Keep it about them.

Reynolds said, “Build your network before you need it. Try to connect with at least three professionals in your industry each week. Comment on their posts and build a relationship. Established relationships are crucial if you need to pursue new opportunities.

Use LinkedIn like a pro

Reynolds said, “Make sure your LinkedIn profile is up-to-date, complete and fully utilizes the capabilities of the platform.

“A lot of networking and hiring happens on LinkedIn, and a good profile can help you stand out if you’re looking for opportunities. Write a compelling introduction that showcases your strengths and value. Include all relevant skills and experiences and ask for approval from others. Make sure your photo and cover image are up to date.

“Document your value to your employer. Review the last years of your career and document your “victories” and successful projects. Detail all the things you have contributed and accomplished on these projects and note the positive results they have brought to the business.

“Then reference those ratings in your reviews. This helps reinforce your value to your employer and can even be useful in conversations about compensation. »

be bold

Another concern you may face is that your employer may have given you tons of stock options that are now underwater due to the current bear market.

Does that mean they are worthless?

Richard Archer, owner and chairman of Archer Investment Management, said: “I think betting against technology companies is a losing bet in the long run. I encourage my technology professional clients to exercise their stock options at these lower prices to maximize their after-tax gains.

Let’s say you have enough money set aside that exercising options won’t hurt your cash flow and your ability to cover expenses for a few months. In this case, this bold move could pay off once the market recovers.

But not too bold

If you’re thinking of quitting your current job and pursuing a better opportunity, now is the time to be on the safe side.

In the current environment, things might not go so well. So if you’re leaving your job to start somewhere else, make sure the new offer is solid. Also, make sure you can survive a long period of unemployment if things fail anyway.

The essential

If you’re a nervous high-tech employee, you have a significant advantage and a big disadvantage.

Your advantage is that your salary is probably in the top 10% (if not 1%) of earners (although major employers need to do more work to ensure equal pay for women in tech) .

Your downside is that your salary is probably in the top 10% (if not 1%) of the highest income levels.

A high income allows you to save a lot of money and invest it aggressively.

The downside is that you’ve probably made expensive life choices that will be hard to undo.

These tips should help you get through this uncertain time with less stress and come out the other side in better shape.

This article comes from the Wealth of Geeks Network and is distributed via The Associated Press.