Easy: Plan A can go away without notice.
J Money of Budgets Are Sexy was relieved of his Plan A. He was fired from his ~$70k/year job with basically no notice.
The good news is that he was going to give his two weeks' notice the next day. How's that for timing?
He had been planning for this day. He made it a goal in August 2010 to save up $50k so that he could try working for himself. He was 92% of the way there when he was fired. I'd call that close enough.
He was ready for Plan B when it arrived.
He's been blogging at Budgets Are Sexy for almost three years, so he had begun planning when things were probably just jolly at his day job. He had been there a couple of years already.
In 2010, though, there was some serious writing on the wall. In June, he got a 10% cut in salary. In September, a whole bunch of his benefits were taken away, including his 401(k). I asked him in the comments whether he lost what he had already put into his 401(k), and at that time he said that he hadn't been paid all that he was owed. When a company starts getting dodgy about your vested retirement funds, that's a gigantic red flag.
I've heard other stories like this. The writing on the wall starts with cutbacks. The garbage is collected less often. Salaries are frozen. Then they're cut. Hours may be cut. Benefits are taken back, and accounting for work done becomes more overt.
Jobs are cut further down the line, maybe as a last resort. Why? A lot of business knowledge walks out the door when someone is fired. A new person would need to be trained. That, and firing someone you've worked with for months, or years, is a painful experience. People avoid this as long as they can, but sometimes there really is no other choice.
J's a smart guy. I don't think the writing on the wall was lost on him. But the fact that he was planning his escape hatch out makes the difference between depression and enthusiasm when the hatchet falls.
He's enthusiastic about his future, partly because he has his Plan B ready to go, and almost fully funded.
I'd like to say that I'd be in the same position if I were to lose my job, but I'm not. Are you?
I’m also not ready with plan B, but that’s part of my financial plan.
It must be incredibly freeing to know you don’t need your job.
Seeing what’s going on in the economy,and witnessing family and friends lose their jobs I’m starting a plan B.
I’m trying to pay off all credit cards in 6 to 12 months, and not create any new debt, and I plan to generate an extra income, in case plan A happens.
I will be prepared.
The past few years have been difficult for most American’s and being prepared with Plan B is such a great idea, and seems so obvious.
Although it’s so obvious I am also victim to procrastination. 2011 will be the year for the start of financial freedom with the creation of Plan B.
Day 3 of working for myself and so far I’m feeling pretty damn good about it! 🙂 We’ll see once I start missing those pay checks, but hopefully I’ll have other projects lined up to replace part of it… right now, I’m in la la land (that’s a good thing).
Happy holidays all!
Well, I don’t think we have much of our plan implemented yet, but it’s a start.
We have a rental property that’s paid for that brings in $180 after expenses and accounting for vacancies. We also live on one salary(the higher one of course!). We don’t have savings because we are still digging out of debt. But our sole debt payment Is less than $500. we would be able to save all of our unemployment benefits if we lost the higher salary and cut back. We also could still save the rental income.
We both have recession resistant jobs so we are not too concerned but we haven’t inflated our lifestyle either. Neither one of us wants to start our own business. So we just plan to rent out the condo we are in right now (it’s paid for) when we get a house and have $400 rental income coming in and have a huge emergency fund and live on one income again once the house is paid for. That’s all we really plan to do.