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Budgeting for Layoffs?

Posted by Cliff on Sat May 13, 2006 06:30 PM
from the preparation-for-living-without-a-paycheck dept.
The Almighty Buck
The Waxed Yak asks: "After reading the Slashdot tech worker unionization story, I started wondering: What are other IT workers doing to prepare for potential layoffs?"
"We're all at risk of it, be it from actual layoffs or loss of employment for other reasons. My personal approach has been to live off about 1/3rd of my earnings and bank the rest, even though that means living in a hovel and driving an older car. Worst case scenario, I get to retire early.

I recently became completely self employed, which has made it all the more important to save. I understand many Slashdot readers have families to support, so they don't have the same option for savings that I currently enjoy. As I hope to have a family to support in the near future, I would be interested in tips or techniques to prepare for this situation. Judging by the posts in the unionization thread, many of you are dependent on a steady income to provide for their families. Hopefully this thread can provide some ideas for them as well."
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[+] News: Tech Workers of the World Unite? 1254 comments
okidokedork writes "Wired News reports on the lack of unions in the IT workplace. If you could join a union in your workplace, would you?" From the article: "The rich get richer, the shareholder is valued more than the employee, jobs are eliminated in the name of bottom-line efficiency (remember when they called firing people 'right-sizing'?) and the gulf between the rich and the working class grows wider every year. You see this libertarian ethos everywhere, but nowhere more clearly than in the technology sector, where the number of union jobs can be counted on one hand. Tech is the Wild West as far as the job market goes and the robber barons on top of the pile aim to keep it that way. They'll offshore your job to save a few bucks or lay you off at the first sign of a slump, but they're the first to scream, 'You're stifling innovation!' at any attempt to control the industry or provide job security for the people who do the actual work."
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  • Question or Comment??? (Score:4, Funny)

    by ericspinder (146776) on Saturday May 13 2006, @06:34PM (#15326960) Journal
    The Waxed Yak asks "When I did work for someone else, I saved 2/3rds of my pay, but since I'm now self-employed, I'd like to really brag", "what guestion do I have to come up with so I can say so on Slashdot?"

      • Now that I'm self employed, I don't make any more than I did before. In fact, when you take the "self-employment tax" into account, I make less. I've traded my security in exchange for ownership in what I do. Now that my security is gone, I'm interested in what other people are doing to safeguard themselves. I'm hoping I (and others) can learn something from this thread to increase quality of living without sacrificing security.

        I'm also self-employed. You budget just as you would if you were employed

        • If you're self-employed, you really should be looking into doing a SEP to save for retirement. The big benefit is that money you put in your SEP is pre-tax. You can usually put away quite a bit more than you can in a normal IRA. It's also a pretty simple form.

          Avoid the simple-IRA, because it's not simple and the SEP is usually a better deal.

          Roth IRAs are a great way to save your post-tax income for retirement since once you retire, all the returns remain untaxed.

          Both of these are better than doing just C
            • I had an engineering professor who once said that engineering was making decisions without all the information. If you have all the information then you're just doing technician work.

              Saving/Investing is, in that sense, a bit like engineering. You do your best to make a good decision with incomplete information. There's no way to know what will happen in the future, so you make the best decisions you can and try to recognize the various risks and account for them somehow.

              Another quote I like: Making pred

      • So, if you're through with cheap jabs that are an attempt to be modded up for humor, please contribute something constructive.

        What?!? 'cheap jabs' on Slashdot, one wouldn't think of such a thing. Seriously, 2/3rd of your submission details how great you are, now, 70% of your reply does the same. Good for you, like many (but not all) Slashdotters, I'm very happy for you.

        You know I've heard the stories about 3 year layoffs, frankly I've always thought "what the hell were they doing for THREE YEARS". Th

      • I sympathize with your financial paranoia. I've become convinced lately that networking and being a good schmoozer are what let people keep their job in tough times -- qualities that are usually absent for a geek. You have to look out for number 1.

        It's good that you have savings, but also consider diversifying your portfolio. If it's all in dollars, your might be screwed by the people in charge -- massive budget deficits, trade imbalance, outsourcing manufacturing... The dollar may not be worth as much in
      • I've always had it in the back of my mind that I could get hit in a layoff, so we have been *very* anal about keeping about 6-months of living expenses tucked away. I figure I could find a new job within a month or 2, so 6 months is a worst-case scenario. This is 6 normal months, not 6 months of complete shutdown (cancel everything but the car payment, house payment, and utilities bill).

        I've never understood people who get laid off for 3 years... they've got to have either unrealistic salary expectations or
        • Long layoffs are often just a case of bad timing.

          I had a bit over 13 years of experience as a programmer/analyst when I was laid off in January 2002, mainly weird languages like Fortran and assembler and various macro languages, but also with some decent experience in C, Perl, Pascal, REXX, and a number of other more mainstream languages, experience with RDMSs like Sybase, as well as a LOT of medium- and large-scale applications design and high-pressure support experience.

          I got nothing at all except one 8-m

  • Me personally (Score:4, Insightful)

    by mikesd81 (518581) <mikesd1@ v e rizon.net> on Saturday May 13 2006, @06:34PM (#15326962) Homepage
    Right now I'm a machine operator @ Sealy components. It's a mechanical job. Yes I'm a geek, but I like mechanics too. There's 2 things a people will always have (relative speaking, let's not nit pick here): an automobile and computer.

    Also, no matter how automated a plant may get, there still needs to be a person to fix the machine when it breaks.

    Okay so my point is to always have a back up plan to fall on. You have more interests, I'm sure, than just computers. Capitalize on them. Wheather it be mechanics or landscaping or whate have you.

    In the last James Bond movie to feature Q: "Never let them see you bleed, and always have an escape plan."

  • Other fields (Score:5, Funny)

    by heinousjay (683506) on Saturday May 13 2006, @06:53PM (#15327046) Journal
    Work on your smooth pimp game, round up a stable of hos, and watch the money roll in with a modicum of effort.

    Sure, pimpin ain't easy, but that don't make it hard.

  • Budget (Score:4, Interesting)

    by daeg (828071) on Saturday May 13 2006, @07:01PM (#15327077)
    I'm in a two-income no-kids (DINK) situation. I'm still paying off student loans. We live very comfortably but I have a strict 20% to retirement rule. For the past two years (roughly) we've been putting 30% into general savings. We could reduce it easily since we both work in very steady industries (him: high rate commercial insurance, me: television station). It is nice to know that just on the general 30% savings one of us can be without work for years and we'd never have to tap retirement. BTW - I'm 22, He's 30. Still a long time until retirement and our health care costs are quite low.

    However, as such, that money is invested quite aggressively. I make stock purchases that tend to be risky. Of course, it has paid off even in the short run, with the 30% savings pushing near 45% annual gain (not including additional cash put in).

    I'd rather live modestly for a long period of time than live well and spend a lot only to lose a job and have to risk moving back to a frugal lifestyle.
    • I'd rather live modestly for a long period of time than live well and spend a lot only to lose a job and have to risk moving back to a frugal lifestyle.

      This has been my approach, pretty much my whole life. Even though my family had a pretty good income when I was growing up, my parents both grew up as WWII-era working-class kids with stereotypically frugal Dutch parents. So they taught me not just to live within my means, but within within my means.

      At times I've made pretty good money myself, but I've

    • I'm in a two-income no-kids (DINK) situation. I'm still paying off student loans. We live very comfortably but I have a strict 20% to retirement rule. For the past two years (roughly) we've been putting 30% into general savings.

      However, as such, that money is invested quite aggressively. I make stock purchases that tend to be risky. Of course, it has paid off even in the short run, with the 30% savings pushing near 45% annual gain (not including additional cash put in).

      In other words, you are fooling your

      • Re:Budget (Score:5, Informative)

        by Money for Nothin' (754763) on Sunday May 14 2006, @12:16AM (#15328170)
        Actually, there is a very good reason why investment and savings are considered to be the same thing: it's because they basically *are* the same.

        Look into how a bank makes loans, and what it does with your money when you "save" it with them. They don't keep it locked in a vault for you, like money under a mattress; they loan it back out to people, and pay you out of their fractional reserves when you come calling.

        In essence (and I'm glossing over a lot of my Monetary Policy class in college), the bank is making an investment on your behalf. They charge a higher interest rate to the loan recipient than they pay you to keep your money "saved" with them -- this is how banks make a profit.

        I mentioned being paid out of the bank's fractional reserve. Because the bank has loaned-out money to people (businesses and individuals), it doesn't have everybody's money at the bank -- it's out being spent by somebody else who thinks they can turn a profit and pay back the bank with the money they make. What happens if everybody goes to the bank and demands their money back, and the bank doesn't have enough available -- i.e., what happens if you see a bank run? Your bank borrows what they need from other banks. Worst-case scenario, they go to the "bank of last resort", a.k.a. a Federal Reserve bank. The Fed waves a magic wand (seriously, it is not transparent enough for anybody besides the Fed to know precisely what they are doing), buys/sells bonds through "open-market operations", and as necessary, creates new money -- which causes inflation. In essence, if the Fed can't handle a bank run (the last time this happened was just prior to the Great Depression, and in fact, is considered by most economists now to be the reason the Depression was as bad as it was), we're all hosed. That said, since the Depression, it has handled some monstrous ones (including Russia's failure to repay its bond commitments, which led to the decline of the Ruble, causing the collapse of some big-name financial firms like Long-Term Capital Management [wikipedia.org]). (OK, I'm not glossing-over as much Monetary Policy as I thought I would...)

        Here's a dirty little secret about the FDIC, which insures the money you "save" at the bank: the FDIC only insures about 1-2% of the nation's fractional reserves. Hence, no matter how you slice it, If another Depression-style bank run occurs, we are all fucked.

        In truth, savings and investment are considered more-or-less the same thing by economists today, because in the end, they *are* the same thing.

        Yours,

        A youngster who "saves" in mutual funds... (and in a high-rate savings account, and only what is necessary for paying bills from a checking account. Most of my savings are in my 401k for retirement though...)
        • Here's a dirty little secret about the FDIC, which insures the money you "save" at the bank: the FDIC only insures about 1-2% of the nation's fractional reserves. Hence, no matter how you slice it, If another Depression-style bank run occurs, we are all fucked.

          In truth, savings and investment are considered more-or-less the same thing by economists today, because in the end, they *are* the same thing.

          Point taken, but there's still a difference between savings and investments; with investments, you can l

        • Actually, there is a very good reason why investment and savings are considered to be the same thing: it's because they basically *are* the same.

          No, no financial professional considers them to be the same. (The slicker elements of the of the financial profession like to blur the line - because they make commissions off of investment churn, and none off of savings.) The risk v. reward ratio is, to put it mildly, extraordinarily different. (Not to mention tax issues.)

          In essence (and I'm glossing over a

      • Very lucky is all. I tend to invest in generally low price stock (not penny stocks). One company I remember in particular nearly tripled in value in less than a day when they announced they were getting bought out (a small mining corp of all things). I've also lost a lot (relative) on a few things. I don't think my "strategy" would be viable on a large scale, otherwise I would probably try it at least for a while. I also got in relatively fairly early on the Google thing and sold high.

        Besides, I enjoy my jo
  • What are other IT workers doing to prepare for potential layoffs?

    W-4 employment, along with nearly all IT "skills" is obsolete. Companies and the people who manage them no longer have the huevos to employ people. They would much rather shirk their responsibilities to the communities they insist on shoving their products at. They want it all for free. They want free access to free markets with free labor and free equipment, free buildings, free services and free use of all the infrastructure necessary f
    • W-4 is the withholding form. "W-2 employment" is probably what you're looking for there. :)
    • have the huevos to employ people.

      The eggs to employ people??
    • "We, as a society, allow corporations the LUXURY and PRIVILEGE of being able to operate as corporations in exchange for certain benefits to society, among them the creation of JOBS and CAREERS and the availability of products and services. Business, naturally, is trying to fuck society by keeping the quo and not exchanging the quid, precisely the same way they are unfairly refusing to honor the original deal in the copyright laws. The reason is because they want everything for free."

      We also tax the baJEEZUS
    • Who gave the Libertarians all the MOD points?

      Hell, I've got mucho karma, so I can afford to tell it like it is. :)

      The whole reason people have to save up so much money is exactly because of what cubicledrone said.

      And to the idiot who said all cubicledrone wants is a Government guaranteed job, that's horse shit. I'm a Reagan Republican, I believe a man should work not live on welfare. You Johnny come lately laissez-faire rabid dogs that call yourselves Republicans today, want to snatch every job known to man
      • Sadly, the GP's set of experiences and opinions is hardly unique.

        I myself have been employed at several places where if they could have chained me to the desk, they would have. The only reason that they didn't is because those pesky laws regarding wage and working conditions kept them from doing it.

        The US isn't run by the federal government. It's run by the people who get the government elected.
        • I myself have been employed at several places where if they could have chained me to the desk, they would have.
          ...yet you continue to work there?

          Land of the free??

        • There are plenty of very good jobs with benefits, etc. You just have to choose the right companies. Pick a company that has been around for at least 10 years. Start-ups are nice, but they are not particularly stable. Pick a company whose products you use. Pick a company that is public and whose stock has done reasonably well over the last two or three years. Anything that meets these criteria should be at least a decent job.

          A little secret for you: the HR department's primary purpose is to weed out

        • This is probably going to come off as "flippant" to you, but I'm genuinely curious. I'm a programmer as well, with a number of languages. I did the 80-100 hour (no overtime, of course) wage slave number, and finally quit because it was intolerable. Man can not live on Powerade and Hot Pockets alone (I tried).

          If you know 8 languages (presumably fairly well, that's about the number I'm at, depending on how you count the C derivitives), why don't you go into business for yourself. I realize it's the new ma
        • Good on you for knowing so many programming languages. Work on your attitude a bit, and perhaps someone will want to hire you. I turn down about a dozen candidates a month -- and rarely is it for lack of technical skill. Most of the folks who interview with me mumble, stutter, and babble their way into another interview with another company. Technical prowess is fine, but give me a motivated, intelligent, personable candidate any day. I'm not concerned about your lack of PHP knowledge if you can learn, wa

  • we IT workers are the most advantageous (Score:5, Insightful)

    by unity100 (970058) * on Saturday May 13 2006, @07:09PM (#15327109) Homepage Journal
    when it comes to layoffs.

    Especially programmers, designers, web developers, or any information technology service or counseling / technical support, anything that can be performed remote :

    We have the internet.

    When you get laid off, even in the u.s., you have the chance to put your resume & experience in a post titled 'experienced ..... looking for work/taking on projects' and shortly you get many inquiries.

    Sure wages are not that high, comparable to when you work full time on-site.

    But then again, a hourly $15 should be enough thinking you are working from home ? or from a remote site on vacation - hell, practically anywhere in the world.

    Our professions are the most suitable for the internet - no surprise, as we are the ones that built it.

    That might not seem enough, a mere $15, however there is no limit as to how many projects you can take on or at the same time how many hourly paid jobs you can manage - handle 3 simultaneous work, get $45 in total - no contractor will object to you as long as you handle their work fittingly. That is something you cant do while working on-site : work on someone elses stuff for an hour, get busted, youre in trouble.

    I understand that many have families and people to support, and quite a many have become accustomed to rather high living standards.

    So what ? if we lower our standards a bit in such times, we can work anywhere, anytime.

    And note that, not having a profession that is required to be registered, unionized, guildized etc nowhere in the world, makes us capable of working ANYWHERE.

    Too high taxes in u.s. ? Move to some other country where you are allowed to live in, just start working there. Its that simple.

    On top of that, many countries will be pleased to have more it workers.

    Unionization, regulation and etc are not to our advantage, but to our disadvantage. Keep in mind that organisations always fail to represent the masses they set out to represent - because only the rich, powerful & influential enough can spare enough resources to get on the helm of any of them. Then the result leads to manipulation and molding of the related masses to some other power's interest, and that generally becomes the industry bosses.

    So far so good, were not mine workers, we can easily find ways to sustain ourselves, heck, even prosper (we are always free to use our skills to set up our own job, and we can do it with minimum capital) whenever we get laid off.

    Maybe we are not that safe always, but, for the first time in the world history maybe, we have more freedom than any profession member had on the face of the world.
    • Unionization, regulation and etc are not to our advantage, but to our disadvantage.

      A quick look at the history of the 20th century as compared to the the rest of human history would instantaneously prove you wrong. The 20th century saw the most regulation and unionisation in human history. It also saw the greatest period of social and technological growth the human race has ever seen.

      Too high taxes in u.s. ? Move to some other country where you are allowed to live in, just start working there. Its that simple.

      That may be possible for a multi-lingual 25 year old with no family or friends. How about the other 99% of the population? I've lived in 3 other countries apart from the UK and I'm telling you right now, it's not "simple" at all, and I didn't have a wife and children to relocate as well.
      • As for unionization, the past history is not sufficient to judge their value in the case of it - never before in the world history there has been much flexibility and communication and networking than internet is offering. we are not local, we are global.

        As for families, having a family and roots is ALWAYS hard whether you are unionized or not. What will happen if a plant closes and union gets a deal elsewhere ? Youll move, as a family and thats it. Whats the difference ? At least , in it field, you do

  • May I suggest a subscription to... (Score:3, Funny)

    by linzeal (197905) on Saturday May 13 2006, @07:18PM (#15327146) Homepage Journal
    Backwoods Country Magazine [amazon.com] so you can learn to make it when they shut off your electricity and you are forced to use your 1/8th of an arable land that used to be your lawn to grow corn on and hunt neighborhood cats.
    • You may be joking, but people aren't putting their lawn space to a great enough use. We have all sorts of room to be growing hemp [illegal in the USA sadly, but makes food, paper, rope, clothing], peas, peppers, onions, and fruit bearing trees that would feed our neighbourhoods nicely, and aren't even an eyesore. It's just a myth that someone needs a lawn to look sucessful. Grass is for cattle, gardens are for people. Oh, and wild rabbits would be better eatin' than cats.

  • "Be prepared." (Score:3, Interesting)

    by Deagol (323173) on Saturday May 13 2006, @07:57PM (#15327320) Homepage
    I live in Utah, where long-term food storage is (to put it mildly) a big thing. I'm not LDS ("Mormon" to you unlearned gentiles), but my family has taken to putting away food as part of the rainy day fund. A couple of years ago, I took a year off. I cashed in the pre-tax retirement fund my employer was contributing to, and lived off of that (for the most part). It wasn't much -- about $30k after the 20% withholding, most of which was used to pay off a small loan (some remote land). My salary before my little sabbatical was about $53k/yr. The food storage we had on-hand helped to stretch the remaining $10k, which also had to pay for a mortgage and a hefty truck payment. Having a milk cow and chickens also helps the food go a long way, too. :) Had I not had the truck to pay for, we could have easily coasted along for 2 to 3 years.

    While one can't go wrong with having money in the bank (or a fund) earning interest, my family's philosophy is to reduce monetary need first then put money away. I recently downgraded my job from $45k/yr to ~$17k/yr, and our standard of living hasn't suffered.

    One poster on this thread has mentioned she doesn't wish to "risk" being forced into a "frugal" lifestyle. Our take on things is live frugally by default and you live with much worry in the long run.

    • You misunderstood that other post. She doesn't want to have to lower her standard of living because of a job loss and plans accordingly. That's not any different than what you are talking about.

      • You know what? You own a house. Get out of here. If the rest of us were so lucky... Sell your house, and come live here. My rent is probably more than your mortgage.

        Many times, it is not 'luck' that leads to financial success, but hard work and sacrifice.

        We spend money on what we want and what we need. A few people want savings, so they "spend" some of their money on savings (to varying degrees).

        Your scenario, while it works for you, is not doable for most. You started out with money. You even t

  • A few key things (Score:3, Informative)

    by roc_machine (314714) on Saturday May 13 2006, @08:00PM (#15327335) Journal
    - Keep my resume up-to-date. Most resumes you do will be custom tailored for a potential employer, but keep a generic one on hand and update it.
    - Know what's going on in the job market. For me, that includes jobs in my hometown and network management (netcool, concord, cisco, etc) jobs anywhere in North America.
    - Apply for jobs even if you think that it may not be a good fit for you. At least it provides good experience in writing a resume and cover letter, and possibly interview experience as well.
    - Keep a minimum balance in a bank account, say $7000. These are emergency funds, and I think being laid off counts.
    - If your company has a share ownership plan, get out if it, or at least make routine transfers out to another account. If the company is considering layoffs, there is a good chance they are not performing well, and that includes stock price. The last thing you want is to be hit with a double whammy of being unemployed and seeing your retirement income evaporate.
    - Whatever training you can get at your current job, take it.
    - Lastly, try and stay positive. Enjoy life to the fullest outside of work.
    • Apply for jobs even if you think that it may not be a good fit for you.

      For the love of god, please stop wasting your time... and mine... with this.

      My boss and I are are trying to hire someone, and the majority of the resumes we're getting are for people who obviously don't fit what we're looking for. They don't even bother lying to us to make it look like they are. Listen: We're not that desperate. We're not going to hire someone who just might theoretically be good at what we need after several mont

        • Unless you're hiring research neurosurgeons or astronauts, I really REALLY doubt it takes "years" of on-the-job experience to do whatever the job is

          Maybe that utter cluelessness is why no one will hire you. The beginning of wisdom is understanding what you don't know, and it sounds like you're not there yet. The irony is that it usually takes experience to grasp why experience is important.

          Sorry, kid, but there are a lot of jobs where just being well educated and highly motivated don't cut it. I'm no

    • "Keep a minimum balance in a bank account, say $7000."

      I like to follow the general rule of thumb: first accumulate six months easily-liquidatable assets. That is, six months of your current salary. Then, acquire two years of non-retirement assets--of your current salary. When you get fired, you won't continue to consume income at the same pace. However, you will have a rough guess as to how long you can coast . . .

      Some would consider $7k one-month's assets. It's probably good to have a month in your primary

  • Over here, it's mandatory (Score:3, Interesting)

    by Opportunist (166417) on Saturday May 13 2006, @08:28PM (#15327454)
    In theory, I could rely on the system. When I get laid off, my employer has to give me one month of payment to get rid of me, and I am entitled to 80% of my wage for 6 months.

    Usually, plenty of time to find a new job.

    Retirement is taken care of, too, so that's, at least in theory, no issue either.

    Still, I try to spend no more than 1/2 of my income. Being able to rely on the system is nice. It gives you a sense of security. Not relying on it gives you a feeling of independence, though.
  • So what are the best resources for us engeineering types to learn about investment, stocks etc.?
    • I've learned a lot by listening to Clark Howard: http://clarkhoward.com/ [clarkhoward.com]

      He has a lot of general consumer advice, but he often talks about investments and saving for retirement.

      In general:
      1) save in your company 401k/403B, etc up to the point where your company matches
      2) then save to the max you can in a ROTH IRA
      3) then save more in your company 401K since it's pre-tax
      4) invest additional money in something like mutual funds. Pick ones with no-loads. You'll probably do well with an indexed fund like an

  • Never take vacation (Score:3, Interesting)

    by Ratbert42 (452340) on Saturday May 13 2006, @10:53PM (#15327902)
    At my old company, nobody ever used vacation time until they were forced to. Since the company would pay it out if you were laid off, it was the only severance package most people had.

  • Someone smart once told me that in addition to savings, you should always have enough money spare to be able to walk away from your job and last you until you get a new one. This ranks as some of the best advice ever given - it gives you, especially while you're young, just that little bit of extra confidence to stand up for yourself and to push back on management, which I've found leads to a better feedback loop between you and your managers, removes 'silent grumbling', and has (in the past) lead to a far

  • There was a time when I put tried to save every cent I could - pay down the mortgage, maximize my retirement savings, etc. So what happened? An expensive divorce from a rather greedy ex-wife and most of my savings were depleted. (I was within 2 years of being completely mortgage free at the time) Now I take a more fatalistic attitute - work hard, but live more for today and try to let tomorrow take care of itself, because I may not be around to see it. (I am a type 1 diabetic, which cuts my life expectancy by an average of 15 years anyway) If you die with a million dollars in the bank, you don't get to spend it in the afterlife.

  • Been there, done that (Score:3, Informative)

    by rlp (11898) on Sunday May 14 2006, @12:28PM (#15330036)
    I learned a few things from my last lay off. I was out of work for about six months. Fortunately I had savings to get through it. Always keep at least six months of savings available. I had a lot of stock in the company that layed me off. The layoff was a mass layoff due to the company experiencing financial problems. Needless to say, the value of the stock had dropped considerably. The stock options I'd been 'saving' were worthless. Lesson two - don't invest heavily in your employer, and cash in any options as soon as they vest.

    When you're unemployed, you need to lower your (cash) burn rate. We reduced unnecessary car trips, eating at restaurants, and most entertainment. We also shopped for food bargains and used coupons. We had several services we subscribed to on a monthly basis. Only those that were absolutely neccessary stayed. We kept internet access, as that was needed for my job search.

    We substituted free entertainment for the movies, trips, etc. That included bicycling, local parks, and books and DVD's from the library. One unpleasant surprise expense was health insurance. Companies are required to offer COBRA coverage (i.e. you get company health insurance for 18 months, but your pay. They set the price). Family coverage cost $900 per month! Had I continued to be unemployed, we would have had to switch to a (non-employer) cheaper 'hospital only' plan.

    I'm working now (ironically at the place that layed me off). My wife has re-trained (outside of IT) to provide some employment diversification. My daughter has changed her career objectives to avoid IT.

    If you're in IT, accumulate sufficient savings, prepare a contingency plan, keep your resume up to date, monitor your cash burn rate. Don't over-invest in your company's stock. Don't live beyond your means, or paycheck to paycheck. If you're thinking about entering the IT field - don't do it.
  • The best thing you can do is keep your skills up-to-date.

    It also doesn't hurt to have a hobby that you can turn into a job. An old manager of mine used to do woodworking as a hobby. When he got laid off from a 200k/year job, he decided to retire from tech and be a professional woodworker. Needless to say, he's quite happy.

    • Re:prioritize-future proofing (Score:5, Insightful)

      by tengwar (600847) <slashdot@@@vetinari...org> on Sunday May 14 2006, @03:55PM (#15330805)
      I'm sorry, but I can't take this as a serious answer to the problem of being laid off, because your preparations cost too much and restrict your options and your mobility. You're taking savings (flexible) and converting them to single-purpose items that you probably won't use, and you're nailing your feet to the floor with non-portable assets
      • Backup solar power? Mains power is cheap. Keep the money in the bank, spend it on mains if you have to.
      • Food stores? Really bad idea if all you're worried about is being laid off. If you've kept the money as savings, you can buy the food when you need it. If you buy food now, it's a wasting asset (i.e. its value declines because some of it goes off).
      • Pay off the house? No, keep a substantial chunk of the money on deposit where you can get at it for emergencies, and only after that pay off more than you have to on the house. You may get a lower interest on deposit than you're paying on the mortgage, but if you're looking for work, you are likely to need cash.
      This sort of advice is only useful if you think that the whole of civilisation is going to collapse. As a preparation for personal financial problems, it's foolish.

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