Posts tagged ‘unemployment’
Well, here we are, seven months after I lost my job, more than six months since my last update.
My profession and field — and perhaps also, temperament — is such that employment cycles are inevitable. Full-time job to unemployment to freelance to full-time job and around again. Dot-com boom, dot-com bust, economy surge or crash-and-burn, company buyout, change in management … every two or three years something alters my situation, often dramatically.
Perhaps unsurprisingly, I’ve always found it easy to deal with bills and other financial matters during the periods of steady paychecks. More than easy — satisfying, even almost ‘fun’. But when income is sparse or erratic (or nonexistent), it becomes teeth-grittingly difficult, and my tendency is to avoid the subject as much as possible. (This is one aspect of the clinical depression I’ve been battling my entire life.)
In previous low-income periods my avoidant tendencies have caused me big financial trouble. Instead of checking in on the bank account every few days to make sure all was in order, I’d go weeks, sometimes a month or two. Instead of paying the bills as they come in, I’d stack them up to deal with later — where ‘later’ was ‘the last possible minute or maybe a bit after’. Often I’d miss due dates because I simply wouldn’t think about bill paying for weeks at a time. Late fees would rack up and interest rates would soar. Since at the time I was carrying credit card balances — sometimes living entirely on credit for months at a time — the effects were devastating.
I still experience that avoidant tendency as much as ever, but this time around I’m happy to say I’ve kept the effects to a minimum. At one point this winter I got too disorganized and was late on a couple of utility bills, which cost $5 each in late fees. But I’ve stayed on top of everything else: mortgage payments, credit card bill, bank account balances, tax filing.
What did suffer was the detailed expense-tracking that I’d been doing via Wesabe … and Pocketmint. I haven’t touched either of them in half a year. I felt guilty for abandoning the blog, but I had to triage something, and ‘number of personal finance blog posts’ doesn’t show up on my credit report.
I’ve been working my way back to posting again for the last month or two, and here I am at last. Next I’ll update on our financial situation over the last half-year, and where we stand today.
(Photo by Baron55.)
I’ve been quiet for a while, going through a number of struggles that have left me without the — in the vernacular of my childhood, the ‘gumption’ — to keep writing frequently. I’m trying really hard to get the spark back now, because I know in the long run the Pocketmint project is important to me.
Here’s a little of what we’ve been dealing with: about three weeks ago, the big corporate monster suddenly chewed me up and unceremoniously spat me out. By innocently mentioning what I thought was a widely obvious event, I apparently violated some unknown policy of the parent company (the details of which remain vague to this day) and in under 24 hours received my walking papers — no mercy, no appeal.
This abruptly cut our income by half. Then, last week, Jak learned that due to staffing cutbacks at Microsoft his hours will be cut to half-time. This means one-quarter income, and total loss of health insurance.
The bad news is that the mortgage alone on our house come to slightly more than Jak’s remaining half-salary, so we’re behind before we even start. The good news is that the mortgage is the only debt we’re carrying — we paid off the last of our massive credit-card debt a couple years ago — and we have a pretty decent cash emergency fund. I’ve been putting aside at least 40% of our take-home for the last two years; some of that we’ve pulled out again for major house improvements and additional (Roth) retirement funding, but we’ve got almost $30k in cash savings.
We can put off all the remaining house projects and hunker down to the bare essentials, and make it for maybe 6-8 months like this. Hopefully it won’t come to that; salaried jobs may be rare right now but I should be able to pick up some freelance or contract work. And Jak’s employer will be working on his behalf to try and increase his hours again. Right now he’s burning PTO to keep the insurance going through December. We’re trying to make this work, and hopefully something will get better before it all gets a lot worse, but we’re definitely in a new era now.
We had a talk with the kids last night, resetting their expectations about our way of life — we won’t be going out for sushi anytime soon, or ordering pizza; we won’t be funding any more weekend out-of-town trips for Michaela to watch her school athletic teams. They took it pretty well; Claire immediately wanted to know how we could cut our costs. Someone else must have previously explained to her about the connection between lighting and your electricity bill, because Claire instantly morphed into Lightswitch Nazi, turning off every light in the house that wasn’t immediately necessary, scolding all the while. We were amused.
I also made the point, which I hope Michaela at least will remember, that this is exactly why it’s important to save a lot of what you earn for a real emergency. She tends to spend money as fast as she gets it, which concerns me in someone about to turn sixteen. But only the difference between us and all those people with ‘foreclosed’ signs on their houses is going to be our empty credit cards and our emergency savings account.
If you have a job now and aren’t saving most of your money for emergencies, please start. You may think this is an isolated incident, but I fear it’s not; if the collapsing economy hasn’t touched you yet, it will. Be prepared.
(Photo by sunchild_dd.)
The last time the economy took a sharp downturn it hit me hard. With dot-coms failing right and left, suddenly there was a huge glut of Internet-industry workers. Employment levels took four or five years to fully rebound, during which I got by on intermittent income and credit-card debt.
This time, though Jak and I both work in Internet-related jobs, they both appear stable for the long term — and if one of us needed to find a new job, the market for our skillsets still seems pretty decent. We are making enough money relative to our expenses that we can afford the occasional decadent splurge and still continue to accumulate substantial savings. We aren’t needing to sell our house anytime soon, so even if prices flatten for a bit, it shouldn’t impact us much.
I am noticing the sharp uptick in food and gas prices but am generally able to absorb them. Still gunshy after the Dot-Bust years, I’ve been feeling lucky that this time we seem to be well-placed to ride out the fall. But a recent article in Forbes suggests that my experience is exactly typical for Seattle, which has the highest inflation rate in the country:
While Seattle’s housing market has shown signs of strain, it’s still a far more stable market than most cities in the country. But the simplest reason for inflation is the health of the local economy. When metro area unemployment sits at a rock bottom 3.7%, it’s an employee’s market for wages, because talent is tough to come by. Higher costs for labor on the manufacturing or service side, and more cash in the hands of the consumer, means prices can float higher without much resistance.
So wait — prices are climbing faster here in Seattle because … we can afford them? What a Catch-22. If we couldn’t afford the price increases, things would be cheaper … but a lot more people would be out of work. Like in Detroit, where “unemployment is over 8%, the highest of any big city in the country, and yet inflation rests at the lowest level of cities we measured.” You just can’t win.
Anyway, I’d much rather be here than in Dallas, which ties our 5.82% inflation rate. According to Forbes, it’s not a robust economy but heavy energy use that’s driving up prices there. “There just isn’t much you can do if you live in Dallas and want to conserve energy. Driving is a way of life and … the city is so spread out that residents are traveling long distances. Add in the summer heat and humidity, and Dallas citizens are pumping the air conditioning non-stop.”
Hey, Seattle — bring on the light rail and the clouds!
(Photo by The Lebers.)
