How Many Safety Nets Do You Have?
Between Mallory Schlossberg’s piece on unemployment (go read it right now) and ThinkProgress’s story of Kirk, the man who reportedly sent out 432,000 job applications but can only find seasonal work, I’m sitting here in my home office thinking about safety nets right now.
How many nets would each of us crash through before we ran out of options? It’s not the world’s happiest thought, but it’s certainly something I’ve wondered about more than once in my adult life. (By “more than once” I really mean “more than once a month.” Adulthood is scary.)
Safety Net One: Bank Account
I’ve heard that you’re supposed to have anywhere between three to six to eighteen months of emergency savings squirreled away in a bank account. I believe that is “financial advice for adult humans, STEP 1.”
Well, I’ve got one month of emergency savings in my bank account, and that is hard-earned. I could have more if I were not aggressively paying down my debt, and I think that’s the choice a lot of us make: pay down the debt more quickly, or build up emergency savings? (And for many of us, “debt vs. savings” isn’t even a choice: our debt load requires us to pay down the debt first.)
So. I’d be okay for one month.
Safety Net Two: Credit Cards
You had better believe that if something happened, I would immediately stop “aggressively paying down my debt” and start “aggressively racking up more debt.” The credit companies would love this. I’ve always been such a good customer.
It’s interesting—and I’ve thought about this many times, probably every time I worry that I could lose my tenacious and tenuous grasp on financial security—that every single one of my bills, including health insurance payments, can be put onto a credit card… except one. The biggest bill of them all. Rent.
You can’t put rent on credit, at least in my situation, because you have to pay it by check. People who do P2P rent transfers, and I’ve heard they exist, might be able to swing something through PayPal, but for me, I have to make sure I have at least $675 in liquid cash every month.
$675 doesn’t feel like that much, right now, but there have been months in my life when making rent was everything.
Safety Net Three: The 401(k)
Oh, I know that you’re supposed to hold on to your 401(k)—which is actually, in my case, a 403(b)—no matter what. It’s one of the few assets they let you keep after bankruptcy!
But if it came down to raiding the 401(k) or losing my apartment, I’d probably pick the apartment and gut the 401(k). And yes, I’d do this before I’d do the “put my stuff in storage and couchsurf” move, because I’d be gambling on the idea that stability is a better way to find a job—gaah, I just realized that all this time I’d also be continuously job-hunting—than instability.
Plus, moving my stuff into storage units isn’t cheap. If I had enough money to do that, I’d have enough money to pay for one month of rent, and I’d always pick rent.
Anyway. Yes. I’d absolutely drain the 401(k). I did it in 2012 with my Roth IRA. When I needed money and had limited options, I got that $5,000 out of there so fast and happily paid the taxes and penalties. (If I’d kept that $5,000 in there until I was 65, it would have grown to $36,255.13 at a 6% annual return, or $18,971.56 at a 4% annual return.)
Right now, even with the taxes and penalties, my 403(b) would buy me a year. I’d like to think that would be all the safety net I’d need, but I know that isn’t necessarily true.
Safety Net Four: Moving in with Mom & Dad
I think this is Safety Net Four. Would I try moving to the deep suburbs of Seattle first? Would I couchsurf? At this point, we’re looking at something like a year and three months of unemployment, which seems like a scarily long and scarily short amount of time simultaneously.
Moving in with Mom & Dad feels like it’s the very last safety net not because it would be such a terrible thing to do—my parents are awesome, and I moved back home as an adult during the summer before grad school—but because 1) it’s a huge thing to ask for, even though we all love each other and would say it was for the best, and 2) it would require pushing the reset button on every other aspect of my life. It would be me leaving my social and professional network behind, moving to a town where I know exactly two people, and starting from scratch.
That’s not completely fair, of course, because so much of professional networking happens on the internet anyway, and I could certainly freelance from my parents’ house as well as I could from anywhere else. But I’m also assuming that if we get to this point, I will have gone over a year without any type of job, freelance or no. So I’m guessing my professional contacts will have all gone stale by this point anyway. I mean, I will have sent Mike Dang so many emails re: “DO YOU KNOW OF ANY JOB LEADS FOR MEEEEEEEEEE” that it’ll have started to get weird.
So why not hit “NEW GAME” instead of “CONTINUE?”
And that’s sort of where privilege comes in, this idea that I can start a new game if it comes to that, that I always have the option of playing Lorelai Gilmore even though I’ve still never seen a single episode of Gilmore Girls.
But those are my safety nets, as far as I understand them. They’re the boxes I tick off, in the night, when I worry about my future.
What about you?
Photo Credit: Kevin Jones