How would you handle a job loss?

[LivingAlmostLarge]

DS and I have been discussing this on an investing thread but it deserves its own. We are discussing if you lost your job do you go on vacation? Do you go on vacation but scale it back? Instead of Europe go to smokies vrbo? Driving vacation instead or flying? Or no vacation? What affects your decision? Age? Ef? Kids?

So when we chose to live without income for a year 5 years ago we did not go on vacation for a year until DH landed a job offer. Then as soon as an offer came in we went on a driving vacation. Why? Because we had to rebuild. Our savings we had lived off of so we did not want to dig the hole we were in any deeper.

Now if DH were to lose his job would we go on vacation? I can honestly say it depends. It depends on if DH gets a severance package. If he did then yes. If he didn't then probably not. I say probably because could see us camping for a weekend or week. I also say that we would likely take a vacation as soon as DH landed an offer and was intending on taking it. Probably a driving one because again we would want to shore up what we spent out of savings.

We are 40 and 42 with a 10 and 7 year old. So we are not really there at fire. We are pretty close but I would prefer more security. And I worry about college. If we were older I might feel different. I also might feel different if we had less saved.

But right now I also think about being single income at a time when we can't see if we are in a recession and how bad it is. In 200I crash I think we knew finding a job would be hard so I probably would have not vacationed.

[bjl584]

I think it really depends on your personal situation.

If I were to lose my job I would cut out all wants until I found new employment.
But that's just me given where I am financially.

[disneysteve]

I'll share my answer here as well.

At the beginning of February 2000, I quit my job somewhat suddenly. I had nothing lined up and no prospects for another job. A short time later, maybe a few weeks, I came downstairs one Tuesday morning and asked DW if she wanted to go to Disney World. She asked when and I said how about Saturday. Sure enough, I called and booked rooms at the EconoLodge and Friday morning the 3 of us and my mother drove down to Florida. We stayed for 10 days and then drove home. A couple weeks after that, DW and I flew out to Las Vegas for a week where I was attending a professional conference that I had booked while I was still working.

I ended up being out of work for 3 months before I started my next job. We lived off of our EF and I sold on ebay pretty much full time during the time I was not working. I don't regret a second of it.

How about now? What would I do if I lost my job tomorrow? Assuming things were open normally (not still closed due to COVID), sure, I'd happily take a vacation or two. I'd take advantage of having the free time to do it. We have substantial cash reserves, well beyond a 6-month EF. We've got at least 15 months worth of expenses in our Ally account alone. I could never return to work again and we'd have enough in savings and investments to last us about 16 years and that's not counting Social Security benefits which we'll be eligible for in about 6 years.

Now that doesn't mean we'd take a world cruise and spend tens of thousands of dollars but a reasonably priced trip like a week in Disney World (runs us about $3,000 or so) would certainly be fair game.

[riverwed070707]

ohhh I dream about this often. Getting laid off or quitting the rat race and just taking a mini retirement. Top of wish list would be to take DD to southeast Asia for 4 months or so. Realistically, if it were to happen tomorrow, we'd probably road trip - obviously in part due to the current situation, but mostly because of our home commitments and if I'm being honest, I wouldn't want to leave my dog He's a great road tripper though.

[disneysteve]

Realistically, if it were to happen tomorrow, we'd probably road trip - obviously in part due to the current situation

Yeah, it would suck to be handed that opportunity today and not be able to go anywhere anyway because of COVID. I'd just be stuck at home like everybody else.

[LivingAlmostLarge]

I'll share my answer here as well.

At the beginning of February 2000, I quit my job somewhat suddenly. I had nothing lined up and no prospects for another job. A short time later, maybe a few weeks, I came downstairs one Tuesday morning and asked DW if she wanted to go to Disney World. She asked when and I said how about Saturday. Sure enough, I called and booked rooms at the EconoLodge and Friday morning the 3 of us and my mother drove down to Florida. We stayed for 10 days and then drove home. A couple weeks after that, DW and I flew out to Las Vegas for a week where I was attending a professional conference that I had booked while I was still working.

I ended up being out of work for 3 months before I started my next job. We lived off of our EF and I sold on ebay pretty much full time during the time I was not working. I don't regret a second of it.

How about now? What would I do if I lost my job tomorrow? Assuming things were open normally (not still closed due to COVID), sure, I'd happily take a vacation or two. I'd take advantage of having the free time to do it. We have substantial cash reserves, well beyond a 6-month EF. We've got at least 15 months worth of expenses in our Ally account alone. I could never return to work again and we'd have enough in savings and investments to last us about 16 years and that's not counting Social Security benefits which we'll be eligible for in about 6 years.

Now that doesn't mean we'd take a world cruise and spend tens of thousands of dollars but a reasonably priced trip like a week in Disney World (runs us about $3,000 or so) would certainly be fair game.

How old was your daughter in 2000? Did you worry at that time for college or retirement? How many years were you working at that time? Would you consider retiring now if you were laid off?

[disneysteve]

How old was your daughter in 2000? Did you worry at that time for college or retirement? How many years were you working at that time? Would you consider retiring now if you were laid off?

Our daughter would have been 4-1/2 when I left my job. I had been working for just over 6-1/2 years at that point. Yes, we were saving for college and retirement. I was also still repaying student loans,

Would I retire now? No. We're a ways from the number I'd like us to have before I retire. Could I? I suppose, but it would put a crimp in our spending for sure. I'm not interested in doing that.

[ua_guy]

Like others, we've saved well beyond a 6 month EF and don't have a mortgage but we do own a house, so income continues to go to savings, retirements, and our expenses are pretty low. This leaves us with the potential to idle or shelter for a very long time while we figure things out. No children to feed. We've discussed hitting the road in our RV for 6 months to a year if we ever find a time to take a break. It wouldn't be time to retire yet (38 and 41), but we wouldn't be destitute if we were suddenly jobless.

[disneysteve]

This leaves us with the potential

Exactly. Living below your means and saving aggressively gives you potential and flexibility.

[corn18]

Exactly. Living below your means and saving aggressively gives you potential and flexibility.

That's where we are. That has given us the opportunity to FIRE next March @ 55 and 51. Kids are off on their own. House paid off. Expenses under control. Just need to engineer a RIF with a package and we are set.

[cypher1]

I think it really depends on your personal situation.

Definitely agree, as everyone's situation is different. I have close to 12mo EF, as well as budget for tuition. If I lost my job tomorrow, first thing is update my resume (which I did a few months ago). it doesn't change my plans of school (besides taking an extra course for next semester), and traveling. International travel is still game on, but a road trip at the very minimum for such short notice.

[kork13]

I'd likely still go on planned vacations, but trim costs where feasible. We have a solid EF plus other cash & investments accessible if required. If I lost my job tomorrow, I'd try to impact my family as little as possible until I got a new job/income stream, and our savings would allow that no problem.

[LivingAlmostLarge]

That's where we are. That has given us the opportunity to FIRE next March @ 55 and 51. Kids are off on their own. House paid off. Expenses under control. Just need to engineer a RIF with a package and we are set.

Would you travel? Or are you there since you are so close to FIRE? What would you have done if it had been 5 years ago Corn you found us but before you were FIRE?

[LivingAlmostLarge]

I'd likely still go on planned vacations, but trim costs where feasible. We have a solid EF plus other cash & investments accessible if required. If I lost my job tomorrow, I'd try to impact my family as little as possible until I got a new job/income stream, and our savings would allow that no problem.

So you would live the same? And if you were out of work for 6-12 months? I know you are 30s kork so no changes?

[ua_guy]

That's where we are. That has given us the opportunity to FIRE next March @ 55 and 51. Kids are off on their own. House paid off. Expenses under control. Just need to engineer a RIF with a package and we are set.

I didn't know what FIRE is, but wondered if it meant "F*** it, retire early".

A google search says I wasn't too far off!