What would happen if...? (Future finances)

heartbreak_star

ringo_24601 wrote: »

Just as a sidenote, in the event of redundancy, my firm only uses the statuary rules, which means in the event of me being canned it would barely cover 2 weeks wages. I've been with the firm for 4 years.

So don't expect redundancy payouts to actually cover you until you find another job

Yup, finding this out at the mo!

HBS x

[Deleted User]

heartbreak_star wrote: »

Yup, finding this out at the mo!

HBS x

That sucks. It's started at my work.. thankfully I'm safe but my mates aren't, and we have all lost out on our bonuses for the year (10% of salary normally ) . My job search has changed from "find the ideal job" to "find a safety net"

Primrose

Over a very long relationship we have experienced the first three of these contingencies. Our answer was to build up the biggest emergency savings pot we could, plus other savings as well. This was our first "grown up" priority on marrying and all other "nice to have" things like extra furniture and decent holidays were put to one side until this target had been achieved.

We aimed for six months expenditure including mortgage payments. I can't tell you how much this reduced the stress when the firstredundancy came completely out blue, followed by a prolonged illness for one of us.

all of these stressful events are hard to handle. The reality is that you can live for the day and spend your money now or buy peace of mind and build up your savings as much as you can so that if such misfortunes hit you, you at least have rhe financial wherewithall to cope. Dealing with the other element of stress and anxiety they cause is anither matter altogether but if you have the foresight and ability to reduce potential stresses on yourself you will find life essier to cope with. People must make their own choices.

LilElvis

matchboxfull wrote: »

I don't know if this thread has a natural home on any particular part of the forum, but it's kind of about planning around your family, so I am putting it here.

Basically, I am just being nosey. We're starting to look at being proper grown ups with money and asking ourselves lots of questions. I wanted to know how other families answer these questions. They're all about how you'd cope financially with things going awry. Things like:

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

cash from current account

b) What about something more expensive, like a car or a boiler?

if <£10k current account, otherwise savings

c) What would happen, financially, if one of you lost your job through redundancy?

I'm a SAHM so not relevant. Husband would jump up and down with joy! He would get a good package and shouldn't have any difficulty getting another position - he is already considering self employment. He could start claiming on at least one of his pensions, though it would reduce the amount the earlier he starts drawing it.

d) And what about long-term ill health?

insurance supplied by his employer, I think 75%

e) And of course, finally, what would happen - money-wise - if one of you died?

house is effectively paid for, more than enough cash and both of us have good pension pots with spousal pensions

I'll put my answers in the comments. I'd love to hear your answers too, if only to get some gauge on what is normal.

Answered above

tiger_eyes

a) + b): I have an emergency fund of around £5-6k that would cover pretty much anything that could reasonably happen, from replacing a fridge to buying a car to unexpected bills from my freeholder. If desperate, I have unused credit available from cards and overdrafts and I save with a local credit union to get access to cheap loans if need be.

c) I run my own business and would not get redundancy if it collapsed. I think it's very unlikely that business would collapse overnight. More plausible that business could start to decline over time due to market changes. I'd live off savings while looking into other related business opportunities before I'd consider getting an employed job. If desperate, would stack shelves at supermarket.

d) Tough to answer this without specifics. I would guess most types of ill health would still allow me to work, so I'd try to cut my outgoings and make it through. If desperate, would sell flat and move back in with long-suffering parents.

e) If I died intestate, my parents would handle everything. They'd sell my property, repay the mortgage and inherit any money left over. No partner, no dependents, no complications.

MallyGirl

matchboxfull wrote: »

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?
buy using offset mortgage facility

b) What about something more expensive, like a car or a boiler? buy using offset mortgage facility

c) What would happen, financially, if one of you lost your job through redundancy?
happened last year - cut back a bit but luckily he was out of worth for only 5 months so we hadn't spent all of the redundancy package, although a massive tax bill has just caught up with us so we haven't much of it left now

d) And what about long-term ill health?
cut back, have a dread diseases type insurance policy, wouldn't need all the vehicles if it was really long term so 1 would be sold
e) And of course, finally, what would happen - money-wise - if one of you died?
work would pay out life insurance if it was me, have small level term assurance policy which would pay some, more problematic if OH as he has no personal life assurance at the moment
I'll put my answers in the comments. I'd love to hear your answers too, if only to get some gauge on what is normal.

answers in green

alan_blank

What if I could help every 11 year old in the country to learn to use a current bank account ( using an already pfeg quality marked product) for just 5 pounds per school? (20,000 schools). Would Martin support this?

motorguy

matchboxfull wrote: »

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?

From our monthly salaries. Just had to replace our American style FF, £1,000 out in January.

b) What about something more expensive, like a car or a boiler?

Repair or replace. One of our cars is on finance, the other two were cash purchases. One of the car is a non essential weekend type toy, so it wouldnt need to be replaced. The second car cost £6K but if it suffered a catastrophic failure a replacement at £1,000 would be fine (i wouldnt want to draw £6K out of savings but could probably recover to a £6K car again in maybe 6 months if i wanted to) Probably on the expensive one on finance - possibly downgrade in short term if it was a very terminal and catastrophic failure that effectively made the car worth scrap value only.

c) What would happen, financially, if one of you lost your job through redundancy?

Been there! Tighten our belts short term until the other person got another job. Our essential outgoings are less than half our total income anyway.

d) And what about long-term ill health?

Covered on my wifes side with sick pay from work for a year. If it was me, then as above tighten our belts until the situation improved.

e) And of course, finally, what would happen - money-wise - if one of you died?

Both of us have life assurance to cover mortgage, so mortgage would be cleared, car finance on our main car cleared and probably a small lump sum remaining

SmlSave

a) What would you do if something like a fridge, washing machine, or set of tyres blew up? How would you pay to replace them?
we have £6000 emergency savings
b) What about something more expensive, like a car or a boiler?
if there weren't enough savings then we'd get finance or put on credit card
c) What would happen, financially, if one of you lost your job through redundancy?
we can cover the bare essentials on just one wage but it wouldn't be fun
d) And what about long-term ill health?
we have life insurance and are lucky to have supportive family
e) And of course, finally, what would happen - money-wise - if one of you died
If DH dies then I'd get a large amount plus the mortgage paid. If I die the mortgage gets paid and DH is the higher earner

Gloomendoom

ringo_24601 wrote: »

Just as a sidenote, in the event of redundancy, my firm only uses the statuary rules, which means in the event of me being canned it would barely cover 2 weeks wages. I've been with the firm for 4 years.

So don't expect redundancy payouts to actually cover you until you find another job

So does mine. It was a bit of a shock to find out what that actually means when I faced redundancy a few years ago.