How quickly could you replace your income?

July 30, 2010 · 28 comments

So I’m assuming the majority of PDITF readers operate their lives around some type of budget. Maybe you are a budget nazi….

or perhaps you prefer the informal budget…

It doesn’t really matter HOW you track your money, but simply that you ARE tracking your money. How you budget is up to you, but one thing everyone should do is at least have some type of plan. This means planning for unlikely events too.

So today I thought we could do just that and play the “What if” game. Are you in?

What would you do if you walked in to your office today and were told to go home because you were fired/laid off?

On the surface, the question may not appear that interesting, but when I started thinking about it more, I realized I’d be up a creek without a paddle. Sure my E-fund will help temper the financial strain for a few months, but eventually I’d have to start making some money.

Unfortunately, this is the major dilemma. To be perfectly honest, I highly doubt I’d be able to gain employment at a salary comparable to what I’m currently making. In fact, I don’t even know if I could find a job that paid me $10k or $20K a year less.

I suppose if I was an engineer or the like, I’d be able to rest easy knowing there are a billion different companies with engineering positions, but last time I checked “Special Agent experience” wasn’t a prerequisite on too many job descriptions.

Fortunately, my position is relatively secure so I shouldn’t have to worry about being let go, but I couldn’t help but think about how royally screwed I’d be if I was. Honestly, I’d probably be applying to entry level positions in the $35k-$40k/yr range and try and work my way up the corporate ladder. And if six months down the road, I was still unemployed, you better believe I’d be at the drive-thru asking you “Do you want fries with that?”

How ’bout you? Honestly think about your skillset and the job market in your area. If you were to be fired today, do you think you could find a comparable salary elsewhere reasonably fast? How long do you think it would take? If you answered yes, what field are you in? If you answered no, like me, how much of an income cut do you think you’d be looking at taking?

Hopefully we never find ourselves in this situation, but it never hurts to prepare for the worst.

{ 27 comments }

1 Jacob

I think it would be difficult to find a new job in my area, given my skillset. I work as a software developer, and that gives me a lot of flexibility. The big problem is my location is in the DC area, and there are tons of jobs requiring my skills plus security clearances.

I think my salary would be easily compensated, but would take probably 3-4 months to really find something I would enjoy doing.

I’m looking for a new job in the Salt Lake City area now, because it’s much cheaper and there are better opportunities for someone in my field. I think I will be able to make the same salary there as I do here, possibly even more given the connections I have with friends out there.

2 Jesse

I’m in the SLC area and there are certainly plenty of opportunities here for software dev. There are a few major contracting companies here that always email me asking if I know anyone with software dev experience. There is an airforce base here, so security clearance is also a plus.

3 Katrina

A long time. In fact, I’ve been unemployed since November of 2009. Employers are way to specific these days in experience and if you don’t have experience in exactly (down to the specific type of manufacturing plant, etc.) what the job function is they ignore you! I’m an engineer and job prospects are still horrible. Also, when I do find a job I’m expected my salary to be about 60% of what I was making before.

4 mary m

Interesting question Ninja. I just was in that situation, had to switch jobs due to my branch being eliminated. Since I had 10 yrs of service with the company, I was fortunate to receive a 5 month severance package. I decided it would be best for me to get another job as quickly as possible to bank both incomes, rather than be choosey and let the months slip away over chasing an elusive job that may or may not come. I got a new job within two weeks, it is a complete and total career path change for me – commission only sales for a fortune 100 company. So far I am doing well, but in the 1st year, they say I will earn 2/3 of my former salary. In the meantime, I am eliminating all my debt and padding cash reserves. For July, I made huge strides on these goals. My severance runs out at the end of October, and the seasonality of the sales job will be busier then as well. I am happy with my choice, and I have another backup plan, but I would have been panicked without my severance.

5 SWR

Very interesting question!

Considering I work in retail and for pennies…I would like to think that I could get a job pretty quickly. I’ll say a month to be safe – and we’ll hope that doesn’t happen.

However, I do have a college degree and all of my experience is in higher ed administration. My guess is that I might be able to get an entry-level position at a college in the next year, but that it will be two to three years before I could land a position doing something in the realm of what I am most interested in doing.

(Yes, I’m planning on going back to school in a year -especially considering the current financial state of colleges and universities. Having a Master’s and getting experience as a grad student will be incredibly advantageous in the long run.)

6 Everyday Tips

Well, I don’t work now, so my salary is pretty easy to replace… :) However, I used to be a computer programmer. My skills are so antiquated – mainframe and PL/1, Cobol. Not a real high-demand area. I would have to re-start in a totally different field probably and at half the salary. I would probably end up happier though because my old job was quite stressful. Actually, I know a ton of people that were laid off and did end up happier finding work outside their field of training or expertise. Money doesn’t always buy happiness.!

7 psycharah

I feel very secure in my job, but I think if for some reason my company folded suddenly (very very unlikely), I’d be okay relatively quickly. I could open a private practice and likely make similar money in short order, and probably more money not too long after that. It would be a lot lonelier without my colleagues and I’d have to pick up the business side of things (which I don’t have to deal with at my current company) but I have great supports (i.e., family members who run their own businesses, sister-in-law is a bookeeper/accountant, etc.) so I think that would go fairly smoothly. I hope that doesn’t occur though, because although I could likely make more money that way, I’d be much less happy. It’s a good thing to think about though. I’m grateful that the career I chose due to passionate interest also has very good job security. :)

8 ldub

right now, it would suck – i had to use my e-fund and am not going to be able to rebuild until next month, so it would be a real stretch. that said, i’ve paid down my debt aggressively in the past few years, so my commitments are really low and i could prob. replace about half my income with freelance work fairly quickly. i don’t think there’d be a good market for me to find a full time gig, though – my skill set is one of those that a lot of companies are laying off and instead hiring freelance, job by job now, rather than having an ldub on staff all the time!

9 Budgeting in the Fun Stuff

I think I’d be able to replace my salary super fast (like within a month). First, it is easier when you “only” make $35,000 a year. Second, I have 9 years of customer service experience, a Cum Laude degree, and a surprisingly great interviewing personality behind me. Heck, I could be a manager at McDonald’s for a little more than $35,000 a year if I just wanted to go for salary replacement (a manager at McDonald’s apparently starts at $30,000-$40,000 in my area depending on the branch).

BUT, I probably wouldn’t pursue McDonald’s right off the bat. :-) I’d take advantage of unemployment while looking for a job that I’d like more than what I’m doing now. We can live and even save some on my husband’s $43,000 salary, so I could actually take a few months to find a close-to-dream job. I’m actually trying to think of said job right now so I could be happier without ever being unemployed.

10 Jesse

Dual income homes, if handled right before unemployment, can be a powerful tool for those that are laid off. If you were laid off, and your husband was able to cover most of the expenses on his salary alone, you could do more entrepreneurial stuff like start a business, freelance, etc. It’s not quite the traditional world it once was and now is the best time to start your own business.

11 MattyIce

I think I would be working at a Restaurant within a Week or so making some sort of money. Then while I was working there, I would look for another job. I do not think I would wait to find a comparable salary. My savings does not allow me much time to search, I need more income. It is a scary place to be. I just completed one year at my current job, and I do not see them getting rid of me soon. Hopefully I am there awhile.

12 Heidi

Been there, done that, next question. :)

I was laid off in Sept 2008 and got a new job in April 2009. So that was 7 months unemployed. Things sucked, but we had a tiny, tiny amount in savings and my husband’s paycheck to get us through until I could start collecting unemployment in January. (Long and very complicated story as to why I had to wait 4 months for unemployment that I won’t get into.)

If I were laid off today, we would have to give up one, if not both, of our cars that we bought over the last year. And if things got really, really bad, we would move back to our place in Indiana that we are currently renting out because we can’t sell it (read: underwater). My husband would have to commute to his crew base in Maryland when he was scheduled to work, which would severely limit our time together, but we could make it work. We are lucky enough to be able to move back to a low cost of living area if needed and if we did move back to Indiana, I’m pretty sure I could get my old job back in a heartbeat.

13 Samantha

If I got canned I would be hard pressed to find another job in my industry-teaching. There is a major lack of teaching jobs already, so finding a new position would be next to impossible, I think. Still, I would be more than willing to find a position in another industry. I’d probably try to sub for awhile to take a look at my options, look for other opportunities in education. If I didn’t find anything soon, I would certainly take any paying (legal) job and make the best of it. I don’t think I would wait long to find something with a comparable salary–I hate sitting idle and would be eager to work soon. That’s what emergency funds are for though-emergencies. Losing a job out of the blue is an emergency in most cases and these days there are no guarantees, finding jobs are difficult. Socking money away is one of the best things anyone can do for peace of mind.

14 Jessie

I think I am fairly re-employable. I have two solid years in human resources as a generalist. While I will be more employable in 1-2 additional years time I feel fairly secure.

15 Kaye

Ha ha ha…I find it funny that you noted, “if I was an engineer or the like, I’d be able to rest easy knowing there are a billion different companies with engineering positions.” I am an engineer. There are many different types of engineers, and their job descriptions rarely overlap. Not as easy to get a new job as you think.

16 Rogue Marvel

I left my job when I got married and move, since I had been very successful in the field and company even after only 7 months, I was pretty confident I could get rehired in the same or better position when I arrived. After 3 months of interviewing I leaned that it didn’t matter how good i was in the time i was with the company before, at 23, with only 7 months of experience, in this economy, I wasn’t a good enough candidate. I was passed up for every position by someone with more experience. Then I started getting passed up for jobs in other industries because they found out I might be leaving with in a year (moving after my husband graduates, and while I never told them that directly, they figured it out when I told them my husband was in grad school). I know work in food service for just above mini wage. i like to job wish I was making more, but my husbands loans help pay for or living expenses and I’ll be moving in 6 month so it doesn’t matter much

17 cashadvance1.co.uk

great second income

18 Sara

I could probably get another job at my same employer (I work for a university) but it would definitely take a few months and the likelihood of finding one that’s as good of a fit as my current one is very, very low. But I could make comparable money, which already isn’t great money! haha

19 Brian

I could certainly find another job in my field, locally, relocation would also be an option, but given my current debt, not sure if I could handle a selling of a house and move.

20 Jesse

Personally, I have been a contract worker for much of my career so I am pretty good at handling the initial sting of the layoff as well as preparing for the off time. This go around though, I would NOT be looking for a new job in the traditional sense. It’s a perfect time to get a small business off the ground as the market has no-where to go but up. I would focus on my freelance career and start multiple businesses to create small streams of income to supplement my full time.

Like others have said though, it’s easier to supplement/replace when your income is not quite the bling bling that Ninja here pulls in.

21 Katelyn

My bf’s contract ended suddenly two weeks ago, and on Friday he interviewed for another position and had a job offer that same day for the same income rate :) He is VERY lucky to have the software programming education and experience that he does, and this contract is for 9 months, which helps us be able to plan for our future. Mamas, tell your babies to grow up to be computer science majors ;)

22 Bridget

I have a second job (is that cheating?) so getting fired from one would cause a ripple in scheduling, and then I’d be fine. I’d suffer all of 2 weeks. I guess my savings would suffer, because it wouldn’t enjoy the windfall of deposits from a second income, but some money would still go in and all my expenses would be covered.

If I got fired from both my jobs, I could live off my emergency fund for a very short time (it’s not very big yet), and I would apply like CRAZY for jobs elsewhere. There’s presently lots of job postings in my field (I’m a microbiologist so I’m just lucky that not many people do what I do! Additionally I have a degree in chemistry so I double the playing field of laboratories I can work in) but I’m not above working retail or service jobs either. Hell, they probably pay more than my graduate student stipend.

Is the university allowed to fire graduate students?

23 Small Town Runner

Even though I feel I have a skill set that makes me a good candidate for a variety of positions, I’ve been looking for a different job for about a year now and haven’t found anything. Not even interviews. I’ve been a little bit picky, but not terribly. I think if I got laid off, we’d really be up a creek. I mean, we could probably make it, but we’d have to put off our getting-out-of-debt plans.

24 Stephan

if i got fired tomorrow i think i would be able to handle the change quite well. i have a substantial e-fund so i wouldnt be worried about money for a while at least. this would give me the freedom to look around and find a job that fits my marketing skills. while i think i would be fine, i love my job and definitely hope that this wont happen to me!
Preferred Financial Services Blog

25 April

I’d.be.screwed if I lost my job tomorrow. I’m single, so there’s no other income to fall back on initially. I work as an HR Manager and openings in this field are few and far between in my area. I would reasonably expect to wait 2 years to find a comparable position in my area unless I relocated or commuted 90 minutes or more (one way) per day.

As for my plan – be assured I’d sign on for anything that brought in some bank. The plus to living in my area is that unemployment is about 2.5 to 3.0% below the national average, so I would be able to sign on for some factory, retail, or restaurant work pretty quickly. I would expect to make about $25-$30,000 less per year in doing so.

To borrow from Katelyn – Mamas, tell your babies to grow up to be anything but HR majors!

26 Financial Samurai

There’s no way in hell I can replicate my income without probably 3-4 years of sweat sweat sweat equity!

The irony is, the more you make in your day job, the more you don’t care about side hustle and income, so you just do what you want, and often times the money just follows.

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