Author Topic: Planning for possible job loss (nowhere near FIRE yet)  (Read 689 times)

meerkat

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Planning for possible job loss (nowhere near FIRE yet)
« on: October 08, 2018, 08:58:11 AM »
DH's workplace is having some uncertainty. Others in his group are definitely being reassigned elsewhere in the company but his position is uncertain. He may be reassigned elsewhere within the company also, but maybe not.

We've only discussed it briefly but a few items we touched on -

1) Our three year old will be pulled out of day care. Our son currently goes to school (free) in the mornings and day care (paid) in the afternoons, so DH would still have time to job hunt and interview. If an interview is after school hours I would be able to take time off work using PTO. This would save us $180/week (or $720/month). (Side note: yes that's insane for part time care even for our area. Apparently "part time" means MWF or TR in our area, not mornings/afternoons, so we're actually paying for full day care for ~3 hours/day of service.)

2) I told him that if he gets a chance to negotiate severance, don't sign anything immediately and also ask for health insurance through the end of the year. Adding him to mine would be $390/month. We haven't looked into ACA at all, we'll do that later if this becomes more of a reality. I vaguely know COBRA is a thing, no idea if that'd be worth looking into but again we'll look at that later. For now I'm using $390/month as a max health insurance cost number.

We have twelve months expenses in savings. We're in a smallish metropolitan area so it could take a while to find a new job just due to limited options. We pay extra to our mortgage, our only other debt is a car loan that will be paid off in a few months anyway and the interest rate is low. Also a credit card that we have for rewards, we auto-pay it every month so I don't really think of it a debt.

When I looked at our numbers in January we were living on one salary and saving the other. We make roughly the same amount, though he makes a little more currently. I want to review the numbers with our current spending since it's been almost a year since last time I looked at it, but I also wanted to know what else I need to be examining at the same time, hence my post here. What else do I need to be looking at?

birdiegirl

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Re: Planning for possible job loss (nowhere near FIRE yet)
« Reply #1 on: October 09, 2018, 05:29:25 PM »
I am planning for the same thing and health insurance is my biggest concern also. Also make sure to fund as much as possible in his 401K and/or HSA if you are able.  You might already be there for 2018 but if stays into 2019 might make sense to front load the 401k contributions just in case. 

Sounds like you have a good cash savings to weather the temporary loss of income.  And don't forget unemployment will be there too which helps some. 

couponvan

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Re: Planning for possible job loss (nowhere near FIRE yet)
« Reply #2 on: October 09, 2018, 05:59:10 PM »
I would also look at how much dining out/convenience spending you have done in the past year as that would be eliminated by having one parent at home. Restaurants, shopping on sale vs just paying full price because it's easy, work clothing, work lunches out, travel, extra automatic little expenses that are "treats" (Netflix, hulu, smart appliance subscriptions, etc.). Does anyone get a cell phone reimbursement through work that might need to go back in the budget. Would home repairs go down because you have the time to DIY.  Are there parking fees that would be eliminated - similar with gas to work? Would haircuts happen less frequently? Could you pare back on charity between jobs?  Your home utilities might actually go up since someone is home all day.  If you have a lawn service or housecleaning service, can those be put on hold?  Will you be in a lower tax bracket going forward so that will have a positive impact on your spending? Could you put off home repairs or electronics spending that you've been doing over the past year? 

+1 on getting unemployment in that situation.

In dire circumstances, you might even evaluate if you need the extra car (and the extra insurance it adds) if only one parent is working.

I hope he keeps his position, but these are all things that you might have in your budget and could be reduced if one person is not working.

LifeHappens

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Re: Planning for possible job loss (nowhere near FIRE yet)
« Reply #3 on: October 10, 2018, 07:46:22 AM »
I'm sorry you're going through this. The uncertainty is so stressful

I would stop paying extra on the mortgage as of today. Put the cash in your emergency fund.

Is your DH due for any medical appointments? Get those done ASAP.

Maybe brain storm low-cost meals and free activities you can do as a family and for dates, just so you feel like you have options if the job loss happens.

Bartleby_the_Scrivener

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Re: Planning for possible job loss (nowhere near FIRE yet)
« Reply #4 on: October 18, 2018, 08:15:39 PM »
I've been in that situation before. It sucks. @couponvan has some good suggestions.

Honestly, though, you are in great shape. If you're living on one salary and have twelve months' of expenses covered, you should be able to weather an extended job search, especially if your husband gets severance pay and you can save $720 a month in daycare expenses.

The only thing that I would consider would be taking the extra money that you're paying into the mortgage and using that to pay the car early. After the car is paid, you can take that extra money and the amount of the car payment and strengthen your emergency fund further.

Good luck.