Contingency plans

[mommy4ever]

As I posted, we're in the destructive path of the recession, it's like a tornado, and we have no truly accurate prediction of where it is going. At the moment we seem to be on the outskirts and *should* be missed, however, like any tornado, it can change direction with no warning. Dh at the moment, is not at risk of layoffs.

That said, there's no guarantee. I've done some research. I'd say there's a 95% chance he gets a severance package that will be worth several months wages(approx 6 months). But there's no guarantee, based on what the last company got when the parent closed down.

NOT counting on THAT, but praying if it comes to it, that's what we'll get.

So I have sat down and done some planning. I wrote out the current budget. And worked out the "just in case" budget that I am implementing to maximize savings. And I have a "layoff" budget based on EI only. And that would be dh income is 40% of what he makes but better than nothing.

What SHOCKS me, is that we can make it on the layoff budget. It means NO snowball(well as things get paid down a small snowball will be building, this is based on right here right now payments), but all payments met, there is still a little savings being made, which is important should dh NOT find work we have continued to build the EF even if it's a small amount. Now saying that, dh is willing to work in an area that is hurting for workers, even though he hates it. He won't be unemployed for long. With any luck, he'd find something quickly that will "do" AND we get the severance package and the can REALLY build our EF.

So, I'm implementing our "just in case" budget. Meaning, I'm cutting back what he "earns", automatically scaling back his weekly want by $200 and putting it in savings. From my income, I'll be also adding to the EF. So Each month, we'll be tucking away almost enough for the bare minimums for 1 month! Actually a little more than that, as I have kids activities and our campsite budgeted in there. I'm planning on working bingos to pay for the sports, so that will be something for each bingo worked the amount to be credited for the sports will be transferred from the FA to the EF. AND there is still a snowball being made!

[homesteadmamma]

Don't count on the severance package. First it might not be there. No company has to pay it. Second the tax man takes a huge chunk of it. My dh got a severance pkg when his company sold and they no longer wanted the older employees. The tax guys were there immediately, with their hands grabbing at it. Even putting it into a RRSP didn't help because when you take it out, they grab it then.

Second, unless you are extremely committed to not spending that severance pkg, it's tough when you get a huge chunk of money all at once. In many cases, people go and blow it. (I'm not saying you will, please don't get me wrong. I'm saying many people do. It's kinda like winning the lottery, kwim.)

I think you're wise in what you are doing. There is no job that is guaranteed at this time. Dh thought he would stay with that company until he was 60. It didn't happen and in today's economy it's even worse. You've got a great plan and I'm thoroughly impressed with how you are working on it on a regular basis. Great job!!

[dcompton]

It sounds like you are really on top of things. You are wise to have good plans and to be implementing now. It's always better to get the umbrella before it starts raining.

[peanut]

That's quite a plan. I think I need to talk to DH about things. He thinks we're fairly secure, but I see our stockpile dwindling here. Granted, I'm trying to use up the freezer contents. But still, the cupboard is looking a little bare! Food no longer goes on sale here it appears. At least not the stuff we need to eat. However, I have a bit leftover in the grocery budget every pay period. I think it's time to put it to good use.

DH and I have been talking about xeriscaping the yard...and putting in raised beds for vegetables. Our community always suffers water shortages in summer.

Our province is offering a rebate to people who replace their big old toilets with newer more water efficient ones. Might talk to DH about taking advantage of that. But probably not. We put a low water use toilet in upstairs and it plugs more frequently, meaning we need to flush it more often to take stuff away. Not much of a water savings if you ask me!

Having said that though, we just replaced a low flow shower head with a regular one. My hairdresser was complaining I wasn't getting the shampoo out of my hair completely. Well, I stand under the darn shower 10 minutes trying to get it out. We switched and I don't have to stand near so long.

So I think you have to be careful about thinking 'low flow' and 'water efficient' are totally a good thing. Sometimes you need that extra flow to get the shampoo out! I'm thinking the shorter time under the regular showerhead is using the same amount of water as the longer time under the low flow showerhead.

As for other aspects of our contingency plan...we have a recession proof government job here...unless the government goes under. DH works in a library and the usage of those places goes up during a recession. It would be difficult to see him laid off. He's in a union position and a manager with seniority. HOWEVER, if prices keep going up like they have been, it could get tough.

Truth be told, I'm more worried for my girls and their respective men. They are basically all unskilled labor. High school diplomas, but no trade or university degrees behind them. That worries me. I keep passing food on the sly to DD#1 when I can. But her DH is firm that he doesn't want to depend too much on us. A noble idea, but I don't know how realistic it will be in the future...

[mommy4ever]

Based on Alberta Law, based on length of employment, dh would require 6 week notice of termination or 6 weeks pay, plus all his vacation pay. Period. So regardless we'll have a few weeks cushion by way of notice, or pay.

The company has given packages to all the laid off staff so far, based on the reports I've researched, so there's still that possibility. But you never know. It's a hope, not a counting on.

Now if we do get the severance, it's being whisked out of the general account asap. We'll be transferring only what is needed until we get new work, just like a paycheck being deposited. IF not, well, then not. I hope that it doesn't come to that. But we'll see what happens. Being pro-active here. And optimistic at the same time..lol

[Momto2Boyz]

Ok, I'm knocking on wood right now, before I even start this post!

Dh's boss just inadvertantly gave us good news last week. They are in a pay freeze, and DH is just getting ready to hit one year. They are union, and his boss told him that when they hire 3 new guys in March, he is going to try to slip in DH's full pay scale paperwork and see if it flies.

Dh told me this and I got so excited and he couldn't figure out why. I wasn't even excited about the raise (although that'll be great if it goes through), I'm just so excited that they are hiring 3 more guys, which means they aren't planning on any lay-offs any time soon! (again, I'm knocking on wood)

Having said that, we are stockpiling all of our money. We were going to buy a new car, but decided that it can wait until late summer at the earliest. Don't really need it, and I feel safer having the money in the bank right now!

I think the best thing you can do is have a plan in place, and if you can keep the money in the bank!