Well, aren’t I just a ray of sunshine on this Monday morning. I can also tell you a few more cheery things, if you’d like: You’ll pay too much in taxes. That shirt you got on sale wasn’t really a bargain because it’s ugly. The phone call from your child’s teacher? It isn’t to say what a joy he is in class.
But, back to our topic at hand. You will be laid off. Maybe not today or tomorrow, but the way the world works, many (if not all of you) reading this blog will be laid off at some point in your life.
For the record, I’m not opposed to it. Employment-at-will keeps businesses strong and the economy moving. Put too many protections in and it becomes difficult to get a job to begin with.
But, back to my point. You will be laid off at some point. Please be prepared. Even if you say, “My company offers severance and I would be able to find a job before my severance expires, so I’m not concerned,” could you go a month without a pay check? If not, please start saving money now. There may come a time when you have to go a substantial amount of time without a pay check.
I regularly get people crying to me because it takes a month to begin severance pay where I work. It’s not that money isn’t coming, it’s that they can’t pay their bills today.
So, my doom and gloom message is a little reminder. Money in the bank=happiness. No money in the bank=teary calls to Evil HR Lady. All I can do is sympathize with you. I can’t pay your mortgage.
And many people out there don’t get severance. Your company is never so stable as to mean you have a job for life.
Please prepare? Please?
Amen. It is amazing how much better your compensation package looks when your personal finances assume your next check is your last. Even a voluntary job separation is a financial shock (as I was recently reminded during a move to a new position).
Been there, got the T shirt, then got rehired by the same employer in a different job soon after severance ran out (as far as I know, the only person in a 500-person RIF). Employer gave two weeks’ pay for each six months worked, which was helpful — but that underscores your point, as those in my RIF had a wide range of years of service. Moral: pay off those credit card balances and sock away a month’s income at least.
If you have 2 months savings you will be less likely to take the wrong job out of desperation.
Rule of thumb says that you spend a month job seeking for each $10K of expected salary. The more you make, the more you need to have put by.
I was ready with a cash reserve but failed to figure on the bite out of my retirement plan. Financial planners don’t tell you to account for issues like age discrimination and layoffs. I figured on so many years, so much percent saved from my 35-year-old’s salary. Now at over 50, I see layoffs and lower wages taking a bite out of my plans.
This is very sound advice. I tell people to view every employment opportunity like it is a consulting assignment and to always be prepared with a resume and an active network of contacts. Very few people get the gold watch anymore and most people experience shock, anger, denial or all three when their employment is severed.