May 3, 2010
People who lose their jobs often think about using a severance package to pay off debts. Instead they should focus on conserving cash, says Robert Fragasso, chairman of Fragasso Financial Advisors, a financial-planning firm in Pittsburgh.
One reason: A job search can take longer than anticipated.
"Cash is king during a period of transition," says Mr. Fragasso, who advises clients to make minimum payments on credit cards and other debt until they land a new job and to consider raising deductibles on home and auto insurance policies to trim costs. That way, they are better prepared for an unexpected expense such as a medical emergency that could wipe them out and lead to bigger problems, like losing a home.
Mr. Fragasso has been providing financial counseling to people who have lost their jobs for the past three years, through an outplacement agency in Pittsburgh that retained his firm to help clients with their finances. While many of the people Mr. Fragasso advises held senior positions at their former companies, he says they often don't have a good handle on their finances, something he blames on the lack of financial education in America's schools and colleges.
People who lose their jobs often think about using a severance package to pay off debts. Instead they should focus on conserving cash, says Robert Fragasso, chairman of Fragasso Financial Advisors, a financial-planning firm in Pittsburgh.
One reason: A job search can take longer than anticipated.
"Cash is king during a period of transition," says Mr. Fragasso, who advises clients to make minimum payments on credit cards and other debt until they land a new job and to consider raising deductibles on home and auto insurance policies to trim costs. That way, they are better prepared for an unexpected expense such as a medical emergency that could wipe them out and lead to bigger problems, like losing a home.
Mr. Fragasso has been providing financial counseling to people who have lost their jobs for the past three years, through an outplacement agency in Pittsburgh that retained his firm to help clients with their finances. While many of the people Mr. Fragasso advises held senior positions at their former companies, he says they often don't have a good handle on their finances, something he blames on the lack of financial education in America's schools and colleges.
Closed November 2010
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