THE CAREER CHANGE FINANCIAL PLANNER

It’s sunny, dry, and brutally hot.  The perfect day for Pink Slip Lemonade, you might argue, if you were imagining yourself poolside at an all-inclusive resort in Palm Springs, or in your own backyard in the dog days of August, surrounded by friends and family.  But what if instead you found yourself, as Man vs. Wild’s survival expert Bear Grylls once did, deposited alone in some dreadfully remote corner of the Sahara Desert?  In that case, you’d have only one thing on your mind: water.

In my article Survival Skills: Man vs. Wild Economy in last month’s NEW MEANS News, I discuss how cash is the water that enables an unwitting participant in a wild economy to survive.  For those in or perilously close to the land of the laid-off, the case for cash cannot be overstated.  Without reserved cash (water) to get you through a dry spell when access to a fresh supply is cut off, the system starts to break down, and things start to get ugly, in a hurry.

So if you do one and only one thing to thing to survive the wild economy, my recommendation would be this: calculate how much money you’d need to cover living expenses through a period of unemployment, and pull out all the stops to fill up your Emergency Fund with that amount. 

• How to calculate?  Use the New Means Cash Flow Questionnaire, mint.com, Quicken, MS Money, or pad/pencil to figure out what you need to pay the bills each month.  (Don’t forget those paid annually or semi-annually like real estate tax.)
• How long?  Research how long it’s been taking others in similar situations to find new work.  Check both online and locally, perhaps via job search networking groups such as Network for Work.
• How to save?  Read the Survival Skills article for ideas on how to scrape together cash, even if you think you’ve exhausted all the possibilities. 
• How to invest it?  Put this money in the safest, most stable vehicle you can find: a savings or money market account, maybe a portion in a CD, preferably all FDIC-insured.  Yes, it will earn a paltry return, but making a killing is not its job.  Being around if and when you need it is.

Then, once back in a safer, more predictable environment, you can put this precious ingredient (cash/water) to more interesting use – as a key component of Pink Slip Lemonade. 

Tags: Career change math, Career Change To Do List, Escape Fund, Involuntary career change, Job loss, Pink Slip Lemonade, Pre-transition To Do List // Add Comment »