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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Shykiwi on September 16, 2014, 02:40:33 PM

Title: Stay liquid in the face of unemployment?
Post by: Shykiwi on September 16, 2014, 02:40:33 PM
Hi, I don't post very often and I am not in the US

When my husband finished his last degree he was offered a temporary job in the government for 15 months.  That job
ends at Christmas.

We sold our house and managed to buy another within walking distance of the train, and it is mortgage-free. 
Living costs are down and I am really happy I read the MMM blog and got the idea. 

Now I am trying to sort out what to do with some leftover money, it's about 1/2 of hubby's annual net salary.
At first I thought I couldn't get Vanguard in this country, you can't get into the Australian one from here unless
you have over 500k.  But to my surprise I found hubby can get Vanguard in his superannuation package with
just a change of the plan he chooses, so that is great.  He can get the world index.  I can also buy into
an index that follows the top 10 or 50 shares of our own sharemarket.

My question is, does anyone have an opinion on how I should handle our 'stash while unemployment looms? 
Should I keep it all fairly liquid and away from an index fund until he has a permanent job?
(I ask myself, what is a permanent job these days, anyway?)
As I said, it's about 1/2 of a years' income after tax.  We are in our early 50s, have no dependents, the house is small and
low-maintenance and we live on about half his net pay each week.  I hope this makes some sense to someone
in the US, but I can explain if necessary. 

Thank you for reading :)
Title: Re: Stay liquid in the face of unemployment?
Post by: tat96 on September 16, 2014, 04:01:47 PM
My personal opinion on unemployment and liquid funds are to make a best guess as to how long you expect unemployment to last.  I know that sounds ridiculous but I believe your husbands career field is probably a huge indicator of how quickly he will get another job.  My wife is a nurse and I am an accountant so we don't keep a lot of liquid cash as we are not super concerned with long periods of unemployment as we can usually find at least poor paying work quickly.  If I was an architect, archaeologist, or had a job in construction I would keep a lot of liquid savings as those fields will probably result in long periods between jobs and are highly affected by economic factors.

Personally, if my wife or I were unemployed I would keep as much liquid savings as I could. 

Hope this helps!
Title: Re: Stay liquid in the face of unemployment?
Post by: SunshineGirl on September 16, 2014, 05:55:48 PM
I would keep it all liquid...but you didn't mention your current asset allocation, so I don't know if you already have some liquid funds. But in the face of looming unemployment with one worker in the household and that worker in his 50s, I think it's wise to keep a year's worth of expenses liquid, definitely.
Title: Re: Stay liquid in the face of unemployment?
Post by: Shykiwi on September 17, 2014, 02:20:44 PM
Thanks to both of you.  I think maybe a year's worth of expenses is a good idea, that still leaves just a little over to invest.
I just wanted to make sure I hadn't overlooked something blindingly obvious, you know?
Title: Re: Stay liquid in the face of unemployment?
Post by: Exflyboy on September 17, 2014, 04:22:42 PM
Yes keep it liquid and then cut down your remaining expenses as much as you reasonably can.

I know UK unemployment bennies are way more generous than the USA, but until you know that you can live on those bennies and how long they will last (indefinitely?) I would keep it liquid.


UK ex pat living in the US