income shock game-day scenario

[polarbearfans]

Barely. We would have to give up some luxuries like Netflix to eat, but otherwise we could live on our lowest income.

[illgetthere]

I've been laid off twice in the last year and a half, and h is a disabled vet. We can cover all of our bills and most of our spending on H's disability. My unemployment gives us a surplus every month. I'm so thankful we try to keep a low overhead

[badtzmaru22]

BTDT, three times. All pre-kids. At the time of the first two, DH was making about 80% of our income.

Layoff #1: he got a few weeks severance, and then unemployment. He had. New job about six weeks later, so we were ok. We didn't have much in savings at all, and I was working part time, not on purpose (shitty area, was always hard for me to get a decent job). We didn't have health insurance.

#2: was the worst. We had a little more in savings this time (for us. MM would still cry. Maybe three mortgage payments total?) but he was off for six months. He did get unemployment. We cut everything, and I picked up a waitressing job. He had to work with his dr to get free meds to stay on them. Eventually, he got a job out of state, and we managed to sell our house in three days, in 2009! And that is really what saved our butts.

#3: was a blessing, frankly. His job had been god-awful with rotating shifts. He debated going back to school, but ultimately found another job in his field that was much better. He had been off about three months, and got unemployment. We had health insurance this time though, through my work, and I was working FT making better money than any other time, though still not enough to live off of.

It would suck much more now, with kids. We were lucky.

[UnderProtest]

We'd be fucked in the short term as his company currently pays our housing (in a VHCOL area) and I'm a stay at home mom. If we could move back to the States immediately, we would be fine for quite awhile as we would be able to pick a cheap place to live. We COULD live with my parents, but there would be no work available for him in that city so that wouldn't make any sense. But the process to move back to the States on our own dime could be very expensive and lengthy. The preschool requires an entire term's notice to get your deposit back (so 4 months notice) and the deposit isn't anything to sneeze at. We are technically in a lease for another year but there is a business break clause so we would be able to get out of that. Picking and scheduling movers for an entire house international move probably wouldn't be a quick proposition either. Eeeek, you are giving me anxiety just thinking about it.

[Deleted]

Just did this for 8 months while DH was on medical leave. With our basic expenses we need about $1500 on top of my paycheck, but we had significant expenses related to his medical treatment & traveling for it. We ended up spending $15,000 of our efund plus a fair amount that our parents gave us to help. For a long time we were living in a Manhattan hotel for 1-1.5 weeks out of the month.

We didn't cut cable etc, because all DH could do for a long time was watch tv. I cut my significant miscellaneous spending and tried to be better about meal planning.

Including our investments, we could make it work like this for about 3-4 years, more if we applied for SSDI.

[gt7301b]

If we had unemployment and cut spending I think we would only need $500-$1,000 a month. We don't have a true e-fund, so we'd probably have to sell some investments in six months or so.

[mskitkat]

Bad things, given that I'm currently the only earner and we just bought a house. We kept an emergency backup of non-retirement investments, so if we sold that all immediately, we'd have about 6 months of no frills living.

[Deleted]

We've been living like this the majority of the last year. We cut down spending on big things, but our general expenses are very low, so it hasn't been too bad.

But I also work 3 jobs, so if it was in my main salary alone with no unemployment to supplement? Not good.

[L]

My parents' best financial advice was to live on one income even when you have two.  Easier said than done, yes, but we've tried. And very long recent job searches have made us extremely conservative in increasing our expenses.

If H lost his job, we'd cut all the frills from our budget - no more wine with dinner, no more fancy cheese at the grocery store, no more happy hour, no more eating out. Then we'd stop all non-retirement savings. I'd probably stop our automatic IRA contributions out of an abundance of caution and just make one contribution in April once I see how things stand. It wouldn't be much fun, but we could live on my income without touching our savings, and any severance/unemployment would be extra. If I lost my job, same plan only we'd probably still be able to drink wine and go on cheap dates occasionally.

The biggest changes would be that we'd put off house buying indefinitely (which we'd planned to do this spring). And if I suddenly became the sole earner, I'd stop being so ballsy about saying no at work so my work-life balance would become nonexistent and I'd probably be on the road Sunday afternoon-late Friday night every single week.

[nessness]

We are about to be in this situation. We should be able to just get by on a totally bare bones budget. Fortunately, while DH is losing his full time job he still has a part time job and another income source (plus we make nearly the same amount), so this we will be losing less than half our income.

[BeagleMama]

With basic expenses, we could last about a year before having to make major changes in home and car ownership.

[v]

We'd be okay for a while (a year at least? probably longer) on investments + other income. Cable, housekeeper, nice dinners out, and vacations would be the first thing to go, as well as stupid little things like mani/pedis (except when an interview is coming -- a $13 mani is required then. And if one of us was unemployed, obviously those 401(k) contributions wouldn't be happening.

If this went on for a long time, we'd definitely downsize our apartment. Right now we're locked into a lease, plus moving is expensive, so that wouldn't be our first step.

And then I have an inheritance that I don't want to touch that I'd touch.

[tacom]

I could pay our rent (all utilities/cable/Internet included), car (insurance/loan/parking... no extra for repairs), and groceries on my income. Can we assume he gets unemployment to cover the rest? If not I'm selling the car and making multiple transfers to get to work.

We've hoarded a crapola of cash for his MBA and the wedding, so if we could cancel the wedding and take out loans for his MBA we would be fine for years.* Particularly because if he wasn't working we would adjust our spending to what it was a couple years ago (no international vacations, goodbye Nordstrom and Sephora, less eating out)

*assuming we stop any and all savings

[heliocentric]

We did this in 2010 for almost a year. With my salary and UE we were able to cover the basics (without having to cut cable, cell phones, retirement, etc.) We didn't have to dip into savings, thankfully. If we needed to supplement with savings we could cover the basics for 2+ years.

Now, if this had happened when we were first married we'd have been screwed within less than 6 months. By screwed I mean probably couldn't pay the mortgage.

[sarapocalypse]

DH and I make roughly the same and we are actually looking at possibly facing going down to 1 income for a bit very soon. We can definitely cover all of our normal, basic expenses just on my income but it doesn't leave a lot of wiggle room for unexpected things. We have an okay e-fund to help offset any of the unexpected things. We will definitely have to cut way back on our fun/random spending but all the important things will be covered (rent, bills, groceries).

[shortstax]

DH and I make nearly identical incomes. Although our income is rather modest, assuming no daycare and the size of our efund, we wouldn't need to make too many cuts (if any) for a good 9 months to a year.

[karinothing]

Sept 22, 2014 23:30:07 GMT -5 spunbutterfly said:

Take kid out of daycare. KOKO.

This is us too.

[drloretta]

We'd probably be OK. DH can pretty easily find a consulting job, so we'd just have to swing him likely being away from home more. If he couldn't find anything, we'd cut back on extras, probably cut cable, and he'd have to stop doing his hobby quite so much. Our e-fund would get us through about 6 months.

[yentl]

We make a similar amount for the most part, but my income is variable and his is not. So if he lost is job, we'd cut out the frills (eating out, travel, shopping). Assuming my income didn't vary considerably, which it usually doesn't, we wouldn't need to dip into savings too much. We could probably get by on just my income for a year or so before we would have to start making bigger cuts like cable, etc, to stop dipping into savings long term, but we could live off one income if we had to. It would just suck.

[protozoa]

Welp, we'd be screwed since DH lost his job a year and a half ago and has not been employed FT since. We'd need to borrow/take money from my mom. Although selling my car would get us through several months, so I'd do that first.

[felicity]

We'd save a lot less. That's pretty much it.

[msmerymac]

If my husband lost his job, we'd be pretty fucked, but it would depend on whether or not he was getting unemployment.

Actually, I just ran the number and with our efund we might be fine for 2 years with day-to-day expenses (so no major car or house repairs or travel). I'm a 1099 contractor, though, so we'd have to work out health insurance, and also I'd probably have to pay more in taxes (my husband zeros out now, and carries all insurance). We'd also probably have to get my H a cheap cell phone. Eh. So maybe more like 18 months.

We would cut:
- my once-a-week office space (for getting out of the house and working away from the laundry and cats)
- routine house maintenance savings
- routine car savings
- routine pet boarding/grooming savings
- dining out
- most or all personal money
- and OF COURSE cable
- put his SL in forbearance, maybe mine too

Not counting the new expenses (heath insurance, cell phone and tax increase) and subtracting the above expenses, we'd be about $1k short per month. I'm not sure what the max unemployment payment would be, but if it was, say, $350-$400/week, we'd be fine until that ran out, and then an additional year and a half on top of that. And *knock on wood* he's never not gotten a job in over 2 years. I think the longest was maybe 4 months and that was right after moving back to the US from a contract job abroad and he was also living with his parents at the time.

If I lost my job, we'd be fine indefinitely, although not saving anywhere near what I'd want, and probably behind on retirement.

[Deleted]

With cash reserves, 3 months with cutting expenses.

If we started using retirement savings, assuming realistically we lost half to taxes, we could carry on for a year and a half.

If I could get a job at half my salary (very possible) we could go on a long time. Would probably sell the house if it looked long term.

If illness were the reason for lost wages, I think send just sell the house and move in with relatives. I'm the breadwinner, so DH would be getting a job. He has years of banking experience, and banks pay benefits generally, so any job should be fine.

[kadams767]

Sept 22, 2014 23:08:06 GMT -5 crashgizmo said:

So here's a question to keep it MM....for those of you who said you would live in a tent or move in with your parents (facetiously or not) would that be before or after cashing out a 401K?

I would pull money from retirement before living in a tent or living with either of our parents if it ultimately came to that, god forbid.  It would take quite the series of catastrophic events to get to that point, thankfully.  But I would take out our general retirement savings that is in a taxable investment fund, then our Roth contributions, and then 401(k).  I would hope by the time we ran through our other savings and the Roth contributions, we would have jobs again.

[AmyRI]

Kids out of daycare.
Fire cleaning lady and lawn mowers.
Decrease food budget.
No travel, large home improvement projects, or charitable giving.

Current e-fund would last 19 months with only these changes and no unemployment income.

If we needed to survive on my income alone long-term (I am not primary breadwinner) it is certainly doable, but we would need to refi our mortgage to 25 or 30 years and my car loan to 5 years.

[CloudBee]

We would be fine if DH lost his job, but would probably hold off on international travel and start budgeting. We could survive indefinitely on just my income if we had to. Childcare would probably be halted or cut back. DH could watch DS, unless he had an interview.

And if we both were to lose our jobs, we could still survive for many, many years on our investments and savings. We've really empowered ourselves by living beneath our means and even waiting a while to have a kid.

While I wish we had a huge house, I'm happy knowing we can float along for a long ass time without worrying about losing it.

There are a lot of expenses would could cut to trim things back. Nix vacations for a while, go down from 3 to 2 cars, spend less on fun stuff, etc.

[mrsukyankee]

If this were to happen right now, we'd be fine for about a year w/o him finding a job and making very few changes (probably wouldn't go on holiday or eat out the same amount) as we have a large amount of savings right now. BUT, we're using most of those savings to do some necessary work on the house which will commence in 4 months, so if that were to happen after we did the work, We would probably have to move into the in-laws house (making them insanely happy) and rent out our house as I don't have a full-time job. But with my DH's background, he should be able to get another job VERY quickly.

[bostonmichelle]

If DH lost his job, we would have to cut a lot of the extras that we still have. Pretty much cut doggy daycare, dog obedience classes, extra payments on debt, savings, dining out, fun money, gas would drop anyways, vacation savings. Depending on what we would have to pay for healthcare, we'd be able to make it 6 months plus with unemployment. At 6 months (when unemployment runs out in my state) if DH didn't find a job in his field he'd have to go work at dunkin donuts or a grocery store or it would be selling the house, cars, living with my dad in about 2 months after unemployment ran out unless we could get free healthcare then we'd be able to limp along for a while longer.

ETA - we also have tons of available credit on our credit cards and could probably limp along for a while longer by racking those up. We could also deplete our 401(k)'s but I'd probably sell the house and cars and go into an apartment before I tapped in retirement or racked up $40k in cc debt.

[gibbinator]

Uh, well, we'd start by selling our house and moving in with the in laws. No more bills!
I don't think I even make enough to cover rent at a cheap apartment, let alone food.
I suppose dh would in theory receive EI for a year, but we'd still sell the house if his position was cut because there aren't any other schools nearby and we'd have to move anyway for a new job.

[Deleted]

Well, I'm "single" so I really only count my own income. I do live with BF right now and he pays part of the housing/food expenses, but I prefer to think of that as a bonus rather than actual income since we're not married and you never know what could happen (hopefully nothing, but gotta plan for worst case!).

So. I lost my job in July. Thankfully I was given severance. If I got fired and didn't have any severance or vacation payout, I would have only had about 1-2 months of expenses in savings (1 month of spending like usual, 2 months if I drastically cut spending, put SLs in to forbearance, etc). As of this very moment, I could make it probably about 3 months if I cut back on spending, since I still have a chunk of severance left and my original savings hasn't been touched. If I was paid unemployment, I could probably swing another couple of months on top of that.

I still technically don't have a stable job since I'm only working a temp job, but ideally this will carry me through until I find something regular.

Also, BF is a grad student so even if I were to count on his income, it's not enough to support us both.