Have you ever given any thought to this? What would happen to you, your finances, your living situation if you lost your job?
My job is mostly contract work, I get paid a salary but that salary depends entirely on how many contracts our company has and how well the company is doing since I own 50% of the company. (Family business) Last May I posted that we lost one of our contracts with more possible on the line, since then not much has happened, my income has remained relatively stable and I’ve just continued on living life and planning for the worst while hoping for the best.
However, thinking about this more this summer I’ve come to realize that my emergency fund is still rather small. If I lose my job, then what? I’ve thought about plain survival; I laid it out pretty well in that post I just referenced, my options on how to survive have slightly changed but this is pretty much what could happen:
1. Look for another job immediately and I would take ANY job in order to keep from depleting my emergency fund completely.
2. If I had to I could survive for 4-5 months without any income by just living from my emergency fund that currently holds $6,200. and
3. I could survive about 10-11 months by withdrawing my RRSP, selling the stocks I hold and living off the emergency fund and
4. I could stretch the situation to 12-18 months by withdrawing my RRSP, selling the stocks I hold and living off the emergency fund and selling off some other investments I hold.
If I really absolutely had to I could survive a year and a half with no job. It would be a miserable, broke 18 months but it could be done. Ultimately though that can’t me mine-or your-plan in case of jobloss. What comes after losing your job is more than just planning for next weeks rent or food. The plan needs to encompass more than just planning to survive, what will do you to replace your income 5 years down the road, what about ten? What skills do you have, what are your options?
With these thought in mind (and my relentless thirst of knowledge) I am considering a Master’s degree (or an MBA) I’m not sure yet but it’s an idea to build on my skills to qualify for better positions. If I lost my job TODAY I would probably find a part-time job, finish my house, sell my house and move back to the Netherlands to pursue the Master’s degree I’m considering. In the meantime, between now and the end of 2012 I plan to attack my emergency fund with a renewed focus. It’s time to get that baby up to $10k, because just maybe, maybe you can buy (some) peace of mind.
What would you do if you lost your job today?