Preparing for a layoff

[TBH]

I work for a company that went bankrupt 8 years ago. We've been taken over by another institution, but our side of the business is always operating in the red. Once or twice a year, there's a big layoff scare. My position was eliminated 3 years ago, and the person in it laid off. It was recreated 2 years ago, and I was hired.

The latest layoff scare has me worrying.

Anybody have ideas for how to prepare for a layoff?
What expenses could you slash quickly if you had to?
What would you do now to make the anxiety more bearable?
How much should you have saved?

Any ideas greatly appreciated, and I'll do some thinking about this tonight while I'm NOT falling asleep and post some ideas tomorrow.

[34saving]

Well, I can't believe I'm writing this in this forum, but . . .if you have a house, now's the time to get a HELOC. (No fees and you don't have to use it, but it can be good security . . .) Cell phone and cable could be slashed in most circumstances. As far as savings . . .well, how much of that money do you need?

[sweeps]

How to prepare for a layoff

[TBH]

Sweepsplayer, thank you. Your post was very useful. I am very bad about searching the archives before I start a new thread.

Some ideas I've had today while I've been mulling this over:

1. No job means no daycare. That's a huge savings right there. If we can afford it, we'll keep him in a couple of half days to keep our spot and so he gets to see his friends.

2. We're diversified in the job market in the sense that between the two of us we have 3 part time jobs. So one job's loss is not as devastating as it would be if the whole family was relying on it. Unfortunately, the job that feels shaky is the one that provides the health benefits.

3. My other part time job is not very reliable in that i don't get paid when school's not in session, and hours change every semester. But I may be able to pick up more hours in the fall if I need them.

4. We have 5 (maybe more) months living expenses in ready money, but if only one of the 3 jobs goes away, we will only need to take 1/3-1/2 of our living expenses from the emergency fund. So the E fund will last even longer, possibly well over a year.

5. I could pick up a temporary weekend job, perhaps at Borders or Starbucks or something, near my house.

6. I should review my professional memberships anyway. Maybe it's time to seriously think of leaving academia in order to go corporate?

7. I did a freelance project recently. Could look for more. The problem is if I start marketing myself it will take a while for anything to pan out.

8. I've been thinking of selling some jewelry I never wear. Should probably do that now and use it to pad the E fund.

[Russell]

Originally Posted by claire

1. No job means no daycare. That's a huge savings right there. If we can afford it, we'll keep him in a couple of half days to keep our spot and so he gets to see his friends.

How about taking in another kid to baby sit ? your kid will have company and you'll have some income while you look for a replacement.

[Bluezy]

Claire:

My prayers are with you. It can be an unsettling to anticipate a job loss.

I agree that you should consider taking in a child during the day. Why pay out the enormous amount of money is costs for daycare when you coul dbe receiving it? Your baby would have a playmate. You could also take your baby to a play group on weekends (one that doesn't charge anything) so baby can have interaction with buddies.

[baselle]

Health care - if you have a need for glasses or the dentist, its time to get that taken care of before you're gone. Also, you probably want to look into how to sign up for COBRA. At least with a layoff you can apply unemployment, which should stretch out the e-fund a bit more.

Starting on looking for another job eases my mind - I'm in control. If you're lucky, you'll have something lined up before the layoff happens.

[Fern]

Good advice from baselle.

To cut back expenses, eliminate any optional expenses such as those related to entertainment, hobbies, eating out, expensive cable, Internet or phone services. Get free DVDs/videos (or read a book) from library. You can use the computers at the library for free as well, for your job search, if you'd like to save on high speed at home.

Defer any major planned home improvements.

if you have a medical savings plan, where $ is withdrawn from your paycheck, start sending in those forms for reimbursement. I guess you could do it after a layoff, but why not get ahead of the curve? Basell also had good advice about using your current health insurance to take care of any health products/services you know you'll need.

I would defnitely start that job search and sign up for email notification of jobs that interest you on sites like monster. com.

If you prepay on a mortgage, stop doing so in order to bank some more accumulated savings for your emergency fund, which you'll need to live on for a while. For the same reason, consider holding back from making your 2006 IRA contribution if you havent done so already, in order to funnel that money into readily accessible cash.When you're unemployed, it's more critical to pay the mortgage than to save for retirement.

When you sit down to consider where to cut costs, focus first on big ticket savings, not the small stuff. Examine your car insurance and homeowners insurance. Can you increase deducitbles? Drop collision on an older car? are you taking advantage of all the credits you can for being a safe driver, having air bags, etc.? Car insurance rates are affected by the average mileage you drive daily. If you are laid off, or even if you've changed jobs recently, revisit what info the insurer has for you on record. If you have a smaller commute, it will save you $$.

Focus on ways to cut the grocery bill, since that's a sizeable portion of any family's budget. Going back to coupon-clipping, switching grocery stores (perhaps now you opt for convenience rather than cost savings), signing up to receive emails on sale items every week, going back to buying regular produce rather than higher priced organic produce, eating less meat, etc.

[Fern]

Oh...if you're really concerned about a layoff, reduce or eliminate 401 k contributions, again to increase your access to liquid assets.

[Russell]

Claire, I found this article for you:

https://www2.iraservicecenter.com/rc... rowNumber=10

Some good hints and advice there, goodluck!

[PrincessPerky]

I have a running list of 'luxuries' that we would give up before asking for government help, or if DH is laid off, though it is more likely he will be moved (been moved quite a few times when his job dissapears)

I wont tell you mine cause you prolly have no desire to go down that road that far, but making the list keeps me feeling spoiled while I still save, I pick and choose what to keep and what to ditch. I make it thinking of what I NEED and what I want, if it is just a want on the list it goes, to be eliminated or savored. (needs are really very simple, wants on the other hand....r)

[Tree0164]

Claire
You sound like you are in good financial shape if a lay-off should occur. I would continue to try to save additional funds towards the emergency fund. 5 months is decent especially if you don't have to access all of it.

The things I would be cutting out is entertainment and eating out. Any club memberships like the gym, or AAA.

Good luck and keep us updated.

[lrjohnson]

I do not know enough of your details to know if this is really off base, but would it be possible to consider not replacing the job? You mentioned having another PT job, doing some freelance, and saving a lot on daycare-that's what made me think along those lines. Now, if your profession provides you great professional/personal satisfaction, or health insurance you may not be able to do without, than I can see a job as required. But, if you have been unhappy about the grind, perhaps now is an opportune time to consider really slashing expenses, and spend more time with friends, family, child, gardening, camping, hobbies, whatever. Especially if the freelance work you do is something you enjoy. Extra time at home can also lead to more savings-more time to cook from scratch, garden, less gas expense, less pantyhose, what-have-you.

Myself, I have a 9-5 FT with benefits, but I'm lucky enough to enjoy it and have a short commute and low/no "professional" expenses. My Guy, on the other hand, just quit a job that had great benefits and money but that was realling bringing him down. For him, working part time, and then studying what he likes for fun, and doing more puttering, etc., is working for him well. For him, having more time and energy and feeling relaxed compensates for his way scaled back expenses. His frugality is actually neat in that I've scaled back even more-we've discovered more ways to save that I might not have if I had a partner who had a lot of income. (We split everything 50/50 from separate accounts.)

As a practical matter, I would investigate what health insurance might be available to purchase as an individual. A lower cost very high deductible plan might work if you do not have a lot of medical needs. If you have pre-existing conditions, having continuous coverage is extra important to ensure certificates of prior coverage, and looking for a workable plan now will be less stressful than when the layoff hits the wall, even if you do take the COBRA option. If you and Pop have low/no needs but want the little one covered, many states have plans for families that subsidize "regular" health isurance for kids, for families that are middle income and may have actual property and savings. For example, if CA it's "Healthy Families" and Blue Cross, etc. is available for families who have income less than 250% of the Federal Poverty Level at a cost of approx. $10/mo-many states have similar plans.

As I said, I may be off-base, but sometimes not working a "regular" job isn't an option we consider. Regardless, I wish you the very best in sorting things out and planning for a good future and a good now.

[TBH]

Originally Posted by lrjohnson

I do not know enough of your details to know if this is really off base, but would it be possible to consider not replacing the job?

lrjohnson, I like the way you think.

I would love to be able to do this. It may be possible, but the situation is sort of complicated. Since my son was born two years ago, my spouse has been working full time and I've been working about 25 hours a week. We agreed ahead of time that I would get to work PT for 18 months or so, then he'd work PT and do more childcare while I became the major breadwinner. He just went down to PT in September.

I could actually get health insurance for myself thru my other PT job (yes, both my PT jobs have benefits, shockingly). But the PT job that's not under discussion here is also always at risk. It's a union job, so it pays great, but all hours are assigned based on seniority. There are two people with more seniority than I have who are always talking about taking more hours. Hours are determined each semester. So I could find myself at the end of the semester with NO HOURS at all because the other two took them all. Plus, that job doesn't pay me during semester breaks, so it would just take more planning to make that job play a bigger role in our finances.

And the freelance work--I've only done a bit, and I don't know how long it would take me to ramp it up to actually pay the bills.

But hopefully this is all moot. Things are looking a little less dramatic at my primary job. There's still a very good chance that there will be a "business interruption" for 3-6 months if the building we're in gets sold suddenly. My boss describes this as a time "when we all get paid to sit at home and look for another job".

Thanks for the thoughts, everyone. It helps to have all your experience and support.

[baselle]

Originally Posted by claire

l
But hopefully this is all moot. Things are looking a little less dramatic at my primary job. There's still a very good chance that there will be a "business interruption" for 3-6 months if the building we're in gets sold suddenly. My boss describes this as a time "when we all get paid to sit at home and look for another job".

That is good news. Unfortunately, these days with many company promises falling by the wayside, its hard to believe the "all" part in that last sentence. Your boss might get paid; you might not.

I would consider this a wakeup call to finish your preparations because knowing a completed plan is in place will give you peace of mind.