It’s funny how recessions and depressions work. Rather than just resetting in one day, it strings out over many months and potentially years. So far, the water is relatively cold in the pot at my house. Both my wife and I are still employed, although layoffs are coming at my company. I suppose the fact that layoffs are coming at my company probably increases the temperature in the pot a few degrees. At this point, things are at DEFCON 5. Okay, maybe 4 is more appropriate. The point is, we aren’t feeling it much yet, other than the pressure that things could change.
As it stands now, things could go a few different ways for us.
The water in the pot might stay cold
Our hope is that both my wife and I stay employed through the economic downturn. If that’s the case, we’ll come out on the other side of this with a much larger savings account and feel pretty good about the direction we are headed. Even if it appears that we won’t see an impact to our employment, we have pulled the belt a couple notches tighter and are actively saving to give ourselves more of a cushion in case the water starts to heat up.
The water in the pot might reach 110 degrees
If the water makes it to 110, that means my wife has lost her job. We will still have enough income to pay all of our bills and will have adequate health care for our family. This will warm the water up to the point that it might not be comfortable over the long term, but we will avoid the nasty burns. This is actually not a very likely scenario because my wife is such a critical part of the operation where she’s at and there are a couple other people that would go before she would. They would have to reduce employment by nearly 50 percent in order for her to get laid off. Crazier things have happened though.
The water in the pot hits 120 degrees
If the water gets to 120, we are on borrowed time. That means that I have lost my job. We can’t meet our monthly bills on just my wife’s income, but we could barely meet them with my wife’s income and my unemployment benefits. Unfortunately, those only last for 6 months. In this scenario, we’d be looking at losing our home within about a year or so if I couldn’t find meaningful employment. Our savings would help us string this out as long as possible, but if employment prospects were poor, we would probably consider trying to sell our house within 3 months of the job loss, just so that we didn’t start burning through all of our savings and investments.
The water in the pot hits 150 degrees
This is probably not a very likely scenario either. This would mean that my wife and I both lost our jobs. If this happens, we are cooked within about 9 months. Our goal would be to sell the house and move to the lake house that we finished last year. It’s paid for (on paper) and would let us drastically shrink our bills.
So, as I fret about where we are headed, I find it’s pretty healthy to think through the various scenarios. They are all workable. Some aren’t ideal, but the main thing is that we have a roof over our head and food to eat.
Have you thought about what you would do?
We also are tightening the belt, saving as much as we can. We’re hoping things will stay fairly calm for 3 years, then we’ll have the house paid off and we’ll be able to stay afloat with barely any income. We have been spending hours and hours working and trying to build multiple income streams for our business. We have an emergency fund that would probably last a year. Lets hope this is the worst (although I doubt it).
I feel the same pressures right now. Unfortunately. The layoffs have been coming quickly at this job. Unfortunately I don’t know what to expect. It is just a matter of time before something happens. If you have to be able to lean on individuals to make it through it is always a good time to have family.