Recently, I was talking to a friend about the state of the economy. I always thought he was in a pretty secure position since he is a lawyer at a top law firm. It appears, however, as if even the legal profession is making cut backs. I can understand landscape design companies, or even home builders, cutting back, but I never would have guessed that law firms would need to tighten their belt buckles as well.

As such, I have compiled a list of three things you need to do now in order to minimize the risk of losing your job.

1. Diversify Your Income – If all of your income comes from one source, you are asking for trouble. While I realize that it is extremely difficult for most people to develop additional streams of revenue, I would suggest starting small and building a little each week. Passive Family Income has a great list of potential streams to consider including CD interest, eHow and selling covered calls. Check out the article HERE!
2. Build Your Emergency Fund – Most experts suggest that you build an emergency fund that would cover your monthly expenses for 3 to 6 months. These funds should be kept in a safe, highly liquid account and be used only for true emergencies. With the way things are going, I want to save for at least a year’s worth of expense. This may be unrealistic, but I know a few people who have been out of work that long already, so it may become necessary.
3. Cut Out Things You Do Not Need – I am sure that you could find a few things you could live without if you really looked. Last week I canceled my cell phone since I never really used it. My wife and I shared a plan that cost us $90 a month. We kept her number but reduced the plan minutes to approximately 750 per month (more than plenty IMO). This should save us about $50 a month (or $600 a year). Additionally, we are considering canceling our cable TV. With the availability of hulu.com and over-the-air TV reception, I can longer justify paying $150 a month simply to keep ESPN. Sad, but true.

While these things alone will not solve all of your problems, they will help minimize the risk of losing your job.

What other things can you think of that will lower your risk?

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It seems to me that we live in a country that allows ridiculous things to continue to happen. We meander along with our lives, never questioning things that are wrong or seem out of place. Why do we do this?

According to Yahoo, crude oil dipped below $100 a barrel today for the first time in 5 months. A few months ago, it was at $147. Does this mean that gas prices will be dropping by approximately 50%? Will we be paying $2 a gallon again?

 Of course not, and guess what, most people will not even care.

Instead of doing anything about it, we will continue to drive our SUVs, 30 miles each way to work (in the snow – grandpa reference), while drinking our $1.75 20 oz. cola or our $5 Starbucks coffee. We will visit the local gas station once a week and merely shake our heads that it now cost $70 to fill up the Ford Explorer.

Sometimes our refusal to care is so bad that we do not even ask for what should rightfully be ours.

Did you know that the IRS has increased their fuel reimbursement recommendations to $0.585 cents per mile? For every mile that you drive your personal car for your employer, you should be receiving 58.5 cents. Are you getting this? Or is your company still paying 48.5 cents (the rate from 6 months ago)?

Why do we let the prices of items go up faster than we demand them to come down? Why is it OK for the consumer to continue to pay for gas as if a barrel of crude still cost $147? I am not sure why we allow this, but we do?

What do you think? Why is it so easy to raise prices but so difficult to reduce them once the price of the underlying commodity comes back down? I would love to hear your opinion on this.

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