This has been a rough week for people I love.
To focus only on the finance side of it, two of my friends lost their jobs this week. They work in completely different industries, and even work in different countries, so the only similarity is that they’re both victims of the tough economic times that everyone is going through. One friend is more lucky than the other. One will continue to receive pay for a while, the other only got a week’s notice. She will have one more paycheck coming and then that’s it.
I’m not going to discuss their financial situations, mainly because I’m not privy to all of the details. But I will say that this has made me take a closer look at my financial situation. I’m always planning for the future. Not so much the near future, but the far off future. I have a Roth IRA. I have a TSP (government 401K). When I bought my house and my tax return increased, I changed my withholdings and dumped the extra money into the TSP. I’m not to the point of contributing the max, but I’m moving in the right direction.
Because I work for the government, my job is a little safer than many. That’s not to say that I can’t lose my job if there are cutbacks. But I’ll have a decent amount of warning, and opportunities to find another job. The problem is that I’m not sure I’m prepared for that. I have an emergency fund, but I don’t think it’s large enough. I have enough to live comfortably for 6 months. I could definitely stretch that if necessary, but not for a whole lot longer. The mortgage must be paid, after all.
Given the current economic climate, I would feel more comfortable if I had a bit more set aside, possibly enough to live on for a year.
But I don’t. And I don’t know how feasible it is to get there at this point. Obviously, it never hurts to save more, but at the same time, I feel like I finally have a good balance of spending and saving, allowing me to squirrel away money while still continuing to make small improvements on my house and fund my running addiction.
Maybe it’s simply time to tighten the purse strings again. Make sure that what I’m buying is things I actually want to buy. Every dollar helps.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.