How long could you manage if you were fired tomorrow?

jamesd

Until death. It took me about five to six years to get to the point where I could meet my normal living needs indefinitely and now I'm well along on my maximum retirement target planning.

gadgetmind

jamesd wrote: »

now I'm well along on my maximum retirement target planning.

Ditto, but I can't drraw down pensions for another three years, and eating into cash and ISAs now would be suboptimal.

Davewils

One of the things that i didn't really realise when I first started thinking about this was just how little, comparatively, paying off a single debt affected my monthly outgoings.

For example. I could save up in cash about £1500 in 3 months, and this cash would keep me for 1 month if i lost my job. OR i could pay off a £1500 card balance. The first option would keep me going for a month to find a new job, the second would just reduce my monthly outgoings by about £35 and leave me with no cash.

Given these two options, I quickly decided that actually my priority should not be debt reduction per se, but increasing cash-on-hand till i had a buffer, then look at paying off debts.

HOWEVER, as long as i used the £1500 to pay off a debt that was re-usable, like an overdraft or a regular use credit card, then i could get the best of both worlds; save myself the monthly outgoing AND have an empty card/overdraft sitting there incase i need it (it gets a bit more complicated if you follow this approach and the card company decides now to reduce your limit or close your account though!).

So whilst paying off a store card is often the best first move a debt ridden person can make to reduce their outgoings, it may not be the best idea if you don't have this buffer of cash. You cant pay your mortgage/utilities etc with your Argos Card!

ANYWAY...

I also discovered that I could save far more money, by getting rid of unnecessary Direct Debits. I managed to save £70pm by removing some Direct Debits (like Office 365, credit expert etc) and 'upgrading' my phone contract (saved £25 pm).

If i wanted to make that by paying off debts, I'd have to spend around £3000 !

noggin1980

Davewils make sure you have something like a topcashback or quidco account too can make hundreds each year just by moving your insurance, phone, tv package, gas/electric etc etc as well as the massive savings you will get if you havn't moved these things for a long time.

Even if you arn't willing to leave something say virgin media its worth ringing up to cancel and be offered a deal, the best deals come from not accepting the offer as you cancel and wait for them to call you in a couple of weeks with a big offer, if that call never comes you can always ring back and say you've decided to stay.

back on topic I'm badly disabled and can't work unfortunately but if my wife lost her job we are in the fortunate position of being ok for a few years, of course it would seriously hurt prosperity in retirement for my wife.

AndyT678

Davewils wrote: »

Given these two options, I quickly decided that actually my priority should not be debt reduction per se, but increasing cash-on-hand till i had a buffer, then look at paying off debts.

This only makes sense if you think you are very likely to get fired in the next 6 months or if the debt is 0% or very low interest. Otherwise you're incurring cost to borrow money on the off chance that you might just happen to need it at some vague point in the future.

To answer the original question...

For me probably 8 - 10 years with some economies - more if we downsized the house. It would also depend on the nature of the firing i.e. whether my share matching vested or not and whether the missus was simultaneously fired.

moneyfoolish

I was made redundant a couple of years ago at the age of 68 which was actually quite nice as I got a bit of money 3 years after I would normally have retired. By the time I even gave the possibility of being made redundant a second thought I had enough savings and a large enough final salary pension not to have any worries. However, I have tremendous sympathy for working people nowadays. The vast majority must suffer a huge amount of stress with redundancy being held over them like the sword of damocles for the whole of their working lives! Most of my working life was spent with the absolute certainty that if you wanted to work there was a job for life. Sadly, that is no longer the case and most normal working people do not earn enough to support their families, pay their taxes and mortgages and still have enough money left to save adequately.

MadMat

If either one of us was out of work we could pretty much carry on indefinitely, although at a reduced lifestyle - the sky account, the gym membership, one of our cars etc would have to go

If both of us were out of work we'd be up the creek without a paddle in 3 months. maybe 4 if my brother ever pays me back the cash he's borrowed since getting a mortgage

Mat

racing_blue

Interesting question that- how long could you live without working.

I'd argue that in the developed world with a social state, the answer is always the same as Jamesd's: until death.

The question becomes, if you couldn't work, what lifestyle adjustments would you need to make? Or... how long until you had to make lifestyle adjustments.

If I had to retire tomorrow aged 40, and never work again, could I form a financial plan which would see me through until the final curtain? I guess. I'd have to sell my house, cars, tiaras (no, not really tiaras). Find somewhere very cheap to live, start subsisting a bit, maybe barter and develop the skills for an exchange economy. Throw myself at the mercy of the state later on. I'm probably not going to choose this, but if it was forced upon me, I'd float. Probably have a good enough life actually. Plenty of people out there doing it.

droopsnoot

It's good that you've had your "epiphany" at a time and place where you could do something about it, rather than simply existing month to month and not giving it any thought.


My first job was at a company that went from fine to not being able to meet the full pay-day costs seemingly overnight, and that was my wake-up call. At that point I had credit card debts (hundreds, though, not anywhere near the amounts that many people have nowadays) and a car loan, and it made me resolve to pay off more than the minimum credit card payment every month. Unfortunately it's made me a bit wary of getting into any kind of financial commitment that I can't pay off straight away, which might not always be a good thing.

missyrichards

racing_blue wrote: »

If I had to retire tomorrow aged 40, and never work again, could I form a financial plan which would see me through until the final curtain? I guess. I'd have to sell my house, cars, tiaras (no, not really tiaras). Find somewhere very cheap to live, start subsisting a bit, maybe barter and develop the skills for an exchange economy. Throw myself at the mercy of the state later on. I'm probably not going to choose this, but if it was forced upon me, I'd float. Probably have a good enough life actually. Plenty of people out there doing it.

Yes, that is true.