You work the government, directly or indirectly, eventually a shut down will get to ya. If you are an indirect worker, that money is never coming to you. If you are a whiny gummint worker you ALWAYS get your back pay from your enforced vacation. Never not.
You still need to get over that hump.
And if you don't work for the gummint, you can still get laid off or the business you work for can go belly up. And bingo, between jobs.
Been there, myself. I was out for 4 and half months last time.
You need to get over that hump.
You need an E-Fund.
"But I don't get the big bucks like you do T-Bolt!"
My current decent salary is a new event. It just makes building that Emergency Fund a bit easier. But I wasn't paid good back the last time I was out of work. Well, just before I was out of work. I still had an Emergency Fund. You CAN do it.
But I have always been a halfway decent saver. I didn't contribute the max into my 401k back then. But I did contribute enough that it hurt to. I always figured Social Security shouldn't be counted on.
Now there are lots of rules of thumb for an E-Fund. Save at least 1 month of expenses... 3 months... 6 months... whatever! Of liquid money. Money you can withdraw from a savings account or mattress and spend tomorrow without a penalty. Save something. Something.
Back when I was out of work I got enough from unemployment to cover the car payment and the mortgage. It made me say "never again" to a car payment. Or a new car. And that was the source of further E-Fund building. I diverted part of my salary to the credit using I had where I financed my car. Plus a little bit. The little bit built. It was something like $350 a month? Anyway, I paid the car off, but never stopped the diversion, and that money built. I had a bank where most of my money went to pay bills. Usually online. That $350 just went to the other institution and never left. I put it on the Saving side instead of the no interest checking side. And it sits there. Building. For emergencies. Like a roof. Or the next car to pay without a car loan. That was it's primary purpose initially. To have more than enough in there to buy the NEXT car when the current one needs replacing. I always have a 'car payment' but I pay it to myself. My savings account. Instead of my banker.
It behooves me to get every last drop out of a vehicle before getting another. I use up a truck, then throw it away. If I get $500 on a trade in I am ecstatic.
The E-Fund for me, is for that roof every 20-25 years. A new furnace. A new air conditioner. Unemployment. A new vehicle. Big stuff. Stuff I don't want to have to finance. I used it to put in a new driveway 5 years back.
And I was just told i was a heartless SOB, for saying basically the same thing at work last week, some of my co-workers(all contractors for .gov(we are fully funded so we are good for this option year)) were really pissed that I dared say that a good bench mark of being a responsible adult is having some sort of fall back plan or 1-6 months of expensive in savings of some sort.
ReplyDeleteThey also got really pissed when I pointed out that having 15+ year GS'es(soft guessing gs12+) that are married to other 15+ year GS'es that have not missed a paycheck yet, worrying about how they were going to pay for food and gas, expenses that were due before their first missed paycheck, is not great optics. That it would have been better to have a newish GS5 single parent that could be complaining about rent or a car note being due after the next payday, and if they dont get it they will be in a pinch. But my co-workers refused to see that even that was a problem.
I wholeheartedly agree - everybody needs to plan for unexpected expenses. And yes, you likely WILL need to trim your expenses to live within your means to do it - spending every penny you make (and often more) is NOT wise!
ReplyDeleteThe last time I was unemployed, it was for 6 months. I lived off of my saving; didn't seek unemployment or ask family for help (and yes, they offered, without being asked).
I found the stories about not being able to make ends meet suspiciously timed when they came out before any checks had been missed.
Right before the 2013 shutdown, some of my colleagues were frantically looking into how to get unemployment and freaking about, maybe, missing a paycheck - these are people who I know have low expenses and lots of savings, so they weren't going to go without. I got the idea they just couldn't fathom not having money coming in regularly whether or not they needed it.
Would I prefer to have no interruptions in my pay? Yes - but I know that we live in reality, not fantasy, and that I need to expect there will be times when things don't go smoothly.
Anybody who lives a live that needs everything to always go their way is a fool!