Plumping Up Our Emergency Fund
I have a very good chance of getting laid off sometime between now and the end of 2009. The company I work for is undergoing significant restructuring and I’m not certain that the organization I work for is all that important to the company’s bottom line. If cuts need to be made I have a feeling they will be made in my department. Of course, there is a chance that the company would keep me, because my performance ratings are higher than many of my colleagues. But at the end of the day, if the functions I serve are no longer required, I will certainly be out of a job.
In order to prepare for the worst case scenario my husband and I are plumping up our emergency fund. We’re aiming for the equivalent of nine to twelve months of post-tax salary. This should serve us in the worst case scenario: if the economy truly tanks and jobs are simply not available.
I am most worried about health insurance. We currently purchase health insurance through my employer at a much lower rate than my husband would pay through his company. I have been extremely happy with our insurance carrier. Without them I would have racked up hundreds of thousands of dollars over the last few years. Most importantly I like the flexibility that a Point of Service plan provides. I don’t have to ask permission to see specialists, which is very important to me. If I lose my job we’ll have to decide if we should bridge the gap with COBRA or move onto my husband’s insurance plan.
In the mean time I am also trying to cut down on discretionary spending. I relieved many of my shopping urges back in September when I went on a small buying splurge. Since then I’ve tried to stay out of stores that might get me into trouble. I’m also keeping very close tabs on our credit card bills, which helps reinforce the notion that I shouldn’t be spending money.
I have decided not to cut back on contributions to charity this year. We typically donate money to a number of causes between September and December and I am keeping pace with last year’s donations. I have also decided not to cut out season basketball tickets. We’ll cut back everywhere else, but I am not willing to miss out on college basketball. Besides, if things got really awful, we could sell some of the tickets and recoup at least half our money.