Hi, I’m Denise from The Single Saver. Robert and I are swapping posts today for the Yakezie Blog Swap, so you can head over to my site to read Robert’s article about the 10 Things That Motivate Me To Be Financially Responsible.
I hate horror movies. I especially hate the kind where people get picked off one by one. You know it is coming but you don’t know when, or how, or who is next.
Two years ago I was forced, against my will, to watch such a scene. In fact, I had a front row seat! And just as you see in every horror movie, one by one people were eliminated. It was all done very systematically and was well planned out. The villains had a list and checked off their victims’ names as they went along. They didn’t stop until every person who was on that list had been dealt with.
By the way, this horror scene wasn’t from a movie. It was from real life.
The Day The ‘Muzak’ Died
Two years ago my company’s Home Office went through a major downsizing. 5% of the workforce was eliminated (100+ people) in a single day. Thankfully, I wasn’t on “the list” but watching the scene unfold all around me was every bit as traumatizing, as if I had been one of the people who got the ax.
My company was actually lucky. We had survived the recession quite well, which is why the downsizing wasn’t larger. But still, it was a startling wake up call that jobs can be eliminated in a blink of an eye.
Scarier still, is the fact that most of those who were downsized from my company who were in their 20s, 30s, and early 40s found some form of employment within 1 year. Those who were in their late 40s and older are, for the most part, still looking.
I am in my 30s now. How old will I be when the next big recession hits our country? Will I be able to find employment quickly? Will there be another round of layoffs in the near future that will impact me? Those thoughts have scared me into being financially responsible, even more so than I was before the big layoff.
Fortunately, I have always been fiscally responsible so this change is not that hard for me. The only debt I have is my mortgage and a car loan. But seeing a major downsizing first hand has forced me to look at my finances with an even more skeptical eye. My main goal used to be to make more money than I spent (always good advice). Today, my financial goals are a little more complicated. I want to put myself in a financial position that if I am suddenly without a job in my 50s, I would be able to survive just fine until retirement on a part time salary (as chances of getting another full time job in my field dwindle the older I get). That means I need to eliminate my mortgage sooner than anticipated. That also means I need to invest more into retirement savings than I had been previously.
In addition, the reality of our current economy has convinced me that I need to increase my emergency fund so I will have some financial cushion should I suddenly become unemployed.
Protect Yourself
The last few years have been a scary time from a financial standpoint. The U.S. has gone through the worst recession since the Great Depression, and by all accounts we have not fully recovered. But I think it was also a wake up call for many of us that we need to be fiscally responsible in order to protect ourselves should we encounter more rough times in the future.
I don’t want to ever again experience another of those horror movie scenes like the one I saw a couple years ago. But, should I ever find myself In the villain’s sights, I at least want to have the right tools (debt free, big savings, ability to live frugally) for protecting myself.
What tools will YOU have?
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A very interesting post that resonates with us all. In the end we are all expendable, therefor we have to plan for the worst case scenario. Personally I’m a believer in the rule of 3 which states that something will always fail. Knowing this I would like to set up 2 other streams of income besides a full time job.
Great post! I look forward to reading your blog.
-Ravi Gupta
Diversification of income is huge in case something unexpected comes up!
Thanks for participating in the blog swap! Losing a job is very scary, and it’s a good thing you are taking the necessary steps to prepare for that if it were to happen to you. I hope the rest of your coworkers are doing the same.
Great analogy Denise! I hate horror – in real life and in movies!
Thanks for the comments, everyone. I got very lucky in the last round of layoffs but I know next time I may not be so lucky. The older I get the more being self-employed appeals to me. I am thankful for my job but definitely want to be prepared to live without it, if need be.
Your point was well made! Some twenty years ago, I was part of the executive team that had to determine who stayed who had to go! It certainly is never fun for anybody. Currently, as a teacher I see how budgetary issues make the people in charge do all the wrong things. The best defense under these circumstances is do what is needed to protect yourself. Acting responsibly financially is key for long term success. Surprises in a horror film is part of it, financial surprises in life can be a horror!
Thanks for sharing your story! It really does pay to be prepared, as you never know what lies ahead!
Good thing you didn’t get the ax! But it is a sad reminder that there are still people looking for positions that no longer exist. I think this will be a financial motivator for many people who lived through the “Great Recession”.