Would you be prepared if everything went South tomorrow?

[Jill]

Reading a couple of the threads on here the last few days, in addition to all the recent news coverage of layoffs got me to thinking: It could happen to just about anyone, anytime.
So what would you do if you lost your job tomorrow with no warning and no severance?

I would first thank God that I had the ability to pay off all my credit cards during the good times and build a “rainy day” fund!

I’ve already made a budget spreadsheet with three tabs. They are Income/Expense budgets for:

Good times (now)
Crunch times
Crisis times

What would you do to replace your income until you found / in lieu of finding a new job?
We would go back to doing the ebay thing again, while spending every spare minute getting some of the eCommerce ideas in action.

What would be the biggest change in your expenses? Ours would be to cut back significantly on food/wine/entertainment expenses by ($3K) and miscellaneous ($1K). In crisis mode, we would lose the housekeeper ($500), gym/spa ($500), cable/internet ($300)

I know that I should probably be living NOW on the crunch or even crisis budget. But we choose to enjoy a few of the luxuries instead of delaying them. Personal choice.

If you don’t already have a “rainy day” fund, is there a reason you aren’t already living on your “Crisis times” budget?

 

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[Runum]

Hey neighbor, is there something you know that I don't?:cheers:

 

[rcardin]

So what would you do if you lost your job tomorrow with no warning and no severance?

Fortunately the chances are very slim being teachers.

Short term Dominoes and Pizza Hut delivery at night 5-9 only (maximum tips) . Wait tables during the lunch shift. Wake up every morning coming up with ideas that would make some cash.

What would be the biggest change in your expenses?

Alcohol, smokes and food

 

[Jill]

Hey neighbor, is there something you know that I don't?:cheers:

LOL. No! In fact, I consider myself to be very blessed to find both my husband and myself working in strong sectors right now. BUT, very few sectors are completely immune. Think Maslow. I would ideally want to be in some form of food, shelter or healthcare right now!!!

So it just got me to thinking. I hope everyone is still driving full speed ahead, but also has thot to put a spare tire and jumper cables in the trunk!! It was a good exercise for me, too, to know that after taking a close look at the numbers that I could make it work. Helps when you aren't operating from a position of fear, methinx. Think Sun Tzu.

 

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[Runum]

Think Sun Tzu.

Bless you.

Yep I got my emergency plan in place. Hope I don't ever have to use it. Thanks for the heads up.

 

[Jill]

Alcohol, smokes and food

I know, right!?

I can't tell you how many people over the years I've tried to help who claimed, I just can't afford . . . [fill in the blank with minimal personal investment]

So I frequently would respond, "Do you have a beer?" Or, "BTW, do you have a Diet Coke" or "candy bar" I could munch on while we talk. It was a test. And INVARIABLY, they did.

 

[Runum]

Sorry, I should have elaborated more.

We don't carry credit card debt. We have decided what we could live with and without as far as possessions. We have a small area for a veggie garden. We do have some fruit trees. We would split a cow with relatives for meat. We would definitely cut back on all the junk food. Wear sweaters in winter to save on heating. Open the windows and turn the ceiling fans on high in the summer. Drive the most economic vehicle and carpool, plan trips better. Drive my scooter instead of my truck. Drink a lot more water and walk more. I guess I would be in better shape. Fix things rather than replace. We did build a shop before we built our house just for that reason.

 

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[hakrjak]

Since I work in the tech sector it's kind of a wierd feeling --

Back when the tech bubble popped, we could tell by key indicators that our jobs would be in jeopardy very very soon (Like next month)... I saw a department of 400 people get slashed to 5 over the next 2 yrs.

Right now I'm not seeing any of those indicators. Sales are still strong, although not gangbusters -- but they sure haven't gone to zero like they did in 2001. Our sales literally went from something like $18 billion per year to $2 billion per year in the blink of an eye.

I'm hopeful that this time around my industry won't be impacted as hard as some others -- As I've already been to hell and back (Department of 400 slashed to 5) -- and I don't want to walk through the fire again right now considering my salary still hasn't recovered to what I was making at the beginning of 2001. *sigh*

If the stuff hits the fan, I could survive about 3 years without having to work another dayjob at my current run rate -- Maybe a little longer if we went into crisis mac & cheese mode. I'm fortunate that my other half works in the healthcare field which seems pretty recession proof so far, so she should have a secure job and the ability to find work if things get really bad.

Honestly though -- if I had to eat up all of my savings and net worth just to survive, and my net worth stopped increasing every year -- I think I would get so depressed that I would come close to giving up. It would be a real major challenge just to keep it together after it's taken so long to get to this point, just to see it washed away in the blink of an eye.

- Hakrjak

 

[fanocks2003]

So what would you do if you lost your job tomorrow with no warning and no severance?

Not appliable in my case, because I don't even have a job.

What would you do to replace your income until you found / in lieu of finding a new job?

Wouldn't be a problem. I have enough passive streams so if my company went belly up today I wouldn't go bankrupt at all.

What would be the biggest change in your expenses?

Nothing much, you can always change fixed expenses (that's the main area to change if income is lowered).

 

[Bilgefisher]

I was able to live for 2.5 years without a job on less then $1000/mo. Assuming my houses stay rented, I could go 6 months right now. Used up a lot of my reserves on them.

If they all went unrented, I would last two months. I realize this is thin and it couldn't be much avoided. I'm working to build my comfort zone up again. I'd like to have 6 months reserve payment for each property.

I honestly don't know what I could do temporary to replace my income. I'm certainly not above working delivery, but my time money ratio would need to work out. For 6.50/hr, I'd be better off playing poker.

My biggest expense is my house. I have local family if need be. I could sell and move in with them short term. Even in this market, I could sell it in 3-6 months and do decently. That would hold me up for a bit. Food can be cut by around $200 a month plus another $200/mo in normal house expenses. I already live pretty frugally, so there is not much meat to cut beyond that.

 

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[CVentures1B12]

Could be the best thing that ever happened to me, haha. I have a couple of things. I would get my two business's up and running because I would have full time to work on them! I only have about a 20% debt-income ratio now, so no worries there. I live pretty meagerly now that I think about it...

But, worst case scenario, I would hike my way back to my homeland in Southern Tennessee. My family has a dairy farm there along with about 300+ acres, where we grow most of the food that we eat. Or the food that I ate when I lived there up until I graduated college a year and a half ago. We have been there for over 150 years and weren't hit hard by the Depression, because of the fact we grew everything, had milk, and meat.

 

[LightHouse]

At this point no, I am fully leveraged with a few new sites, same company new revenue streams. Reserve cash is depleted and I am working long hours. Sort-of do or die mode right now but I am calculating every step I take. Unfortunately the economy is bleak so my timing could not be worse but if it works, that means I can make it in the worst of times.

Edit: REP + for bringing this point to life. These thoughts hadn't crossed my mind recentley.

 

[Charmed Angel]

There are seven times more millionaires made during a recession.

I thought this was a good thread to share this on.

How the Recession Will Create More Millionaires - Associated Content

When someone loses their job, sometimes they are forced to think outside of the box.

I would continue doing what I'm doing now, building businesses.

 

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[Charmed Angel]

Here's another one.

How To Become a Millionaire During The Depression | Money Management Software Blog

 

[Runum]

bump:cheers:

 

[kimberland]

When I was in university,
a prof told me
for our generation
full time work in the private sector
would be spotty after the age of 40
so the hubby and I built our plan around that.
I'm 37 and he's 36.

If we didn't earn another penny actively,
we'd be okay.
Not rolling in the dough but okay.

After coming back from a one month cruise
(the plan when he gets laid off),
he'll get a job selling something
(there's always something to sell)
and I'd get a job in finance,
at least until he felt safe and secure again.

If neither of us could get a job
(highly unlikely but could happen),
we'd have to dip into passive income.
It wouldn't be the end of the world
but we wouldn't be too thrilled about it
(and the hubby would work 3 McJobs at a time
before doing that).

 

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[PEERless]

So what would you do if you lost your job tomorrow with no warning and no severance?

I would try a few options, in order of severity:

1. Shove 40+ hours/week into finding a new job in my sector (hospitality) locally,
2. Expand my search to include jobs "below" my qualifications, and
3. Expand my search regionally, then nationally, then internationally.

What would you do to replace your income until you found / in lieu of finding a new job?

In any case, I would put much more urgent effort into my entrepreneurial projects and work to create money out of nothing. I might get up earlier and stay up later. I'd probably pull the plug on distractions like TV, so that my waking hours would be more productive hours.

What would be the biggest change in your expenses?

I am fortunate enough to have a lifestyle from which I could trim a lot of fat, if I had too. Again, in order of severity:

1. Stop all dining out, including lattes and alcohol,
2. Exchange movies and expensive leisure activities for productive uses of time,
3. Cancel monthly subscriptions, memberships, fees, and donations,
4. Change grocery habits to include longer-lasting bulk staples,
5. Walk and use more public transportation,
6. eBay and pawn my stuff, and
7. Consider moving to a cheaper town or in with my family.

Fortunately, I own more tangible assets than paper. If the economy were to turn completely upside down, the only worthwhile currencies might be baked beans and bullets. Even cash (practically a treasury IOU) is worth less in a crisis than shelter, food, water, and safety.

Let's hope it never comes to that.

 

[Jill]

If the economy were to turn completely upside down, the only worthwhile currencies might be baked beans and bullets. Even cash (practically a treasury IOU) is worth less in a crisis than shelter, food, water, and safety.

Right! Hence my Maslow reference. Are those the markets we should be targeting as a contingency plan? There will always be renters, eaters, etc. (altho, I'm quite certain I don't want to become a farmer!!!!)

Good stuff! Keep it coming.

 

[Runum]

Right! Hence my Maslow reference. Are those the markets we should be targeting as a contingency plan? There will always be renters, eaters, etc. (altho, I'm quite certain I don't want to become a farmer!!!!)

Good stuff! Keep it coming.

My wife and I got to talking about this last night. Total worst case scenario, we would move to one of our apartments in the city. We would be down to my truck and scooter, both functional vehicles. We could walk to the grocery store, library, and city services. There is room in the back yard for a large garden. There is a large porch for shade. Reduce heating and no A/C. There would be plenty of opportunities to barter and pick up odd jobs. We could rent out the other units to bring in some cash. Also room to park a car or two while I repair them.

I certainly wouldn't want to do all this but it was good to brainstorm with the fam. about this.

 

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[PEERless]

Clever article and some great resources for when things really go south. See How to Survive the Depression of 2009! It's just a short list of information sources to help with things as mundane as finding the cheapest gasoline and as fearsome as surviving nuclear winter. My favorite was the Survival Guide to Homelessness, in which the author doles out tips and tricks he used to survive and thrive several years of homelessness. Again, let's hope it doesn't come to this, but maybe it's best to have these lessons in the back of one's mind, lest we must learn them for ourselves one day.

 

[PEERless]

Ooh! Maybe we should get some Wilson Combat Scattergun Tech. Standards. Nom-nom!