How long could you go without getting paid?

[kdonnel]

I have always spent less then I make, making sure that savings was treated like a bill each month. After watching friends struggle during the recent recession I redoubled my efforts.

How prepared are you if your paycheck suddenly stopped?

 

[Christine]

I answered "several months" but it's not that clear cut for me. We are a dual income household. If both of us were without a paycheck, "several" months would be cut in half.

I haven't always been in that position. Since my kids moved out and are out of college, I've been able to sock away a pretty massive savings while still having two car payments and a mortgage. Would be a totally different story if the kids were still here and needing either daycare or tuition payments.

 

[DLgal]

Well, technically we could go on for quite awhile, but it would require maxing out credit cards and pulling from retirement accounts. Maybe 12-18 months? Luckily, our income is reliable and a layoff isn't a possibility, so we don't worry about it.

 

[Soldier's*Sweeties]

Probably about a month. Not ideal, but as a home owning, two vehicle, one income family with two kids it’s reality. If we really cut back we could stretch it out a few...

 

[luvsJack]

Without my paycheck? We could go from now on. Just not be able to do many of the things we are used to but we could pay bills, keep a roof over our heads, stay clothed and eat. And the occasional extra.

We are in the fortunate position that if it actually came to it, dh could up his income quite a bit. I just wouldn’t see much of him. But he could make enough to make up for my pay without having to go into savings.

My check goes to savings, vacations, fun money, etc. so we would wait before he took on the extra work.

Now if he wasn’t working, we would have to rely on savings. And probably 6 months maybe more if we still had my check. If it went longer we could go into retirement but at our ages, that wouldn’t be a good thing to do.

 

[MrsJackSparrow4Life]

We are on baby step #2 so not very long at all. A week or two at most.

 

[1GoldenSun]

We're close enough to retirement age that we could just retire early if we really had to, but our lifestyles would have to be drastically reduced.

If we're talking about just ME losing my paycheck, we wouldn't really even notice, haha. I'm a graduate student and my teaching assistantship barely covers groceries and gas.

If we lost DH's income for a significant amount of time, I guess I'd have to go out and get a real job.

 

[PollyannaMom]

I've been thinking about this a lot lately, knowing there are folks working without pay right now.

Without my paycheck? We could go from now on. Just not be able to do many of the things we are used to but we could pay bills, keep a roof over our heads, stay clothed and eat. And the occasional extra.

If we're talking about just ME losing my paycheck, we wouldn't really even notice, haha...If we lost DH's income for a significant amount of time, I guess I'd have to go out and get a real job.

Same here. I only work part time, and we'd be OK on DH's salary, just more careful.

I assumed losing his when I voted, though, and chose "several months" - but part of that would be because we have a good amount of available credit, or could dip into savings meant for retirement. I expect it would be closer to two or three if we were just economizing and using "easy access" money.

We are on baby step #2 so not very long at all. A week or two at most.

Baby steps are still steps in right direction. - You'll get there!

 

[slpeters]

If one of us was paycheck-less and we were willing to cut back our lifestyle a fair amount we could probably go indefinitely without taking on debt or dipping into retirement. If we were both out of work and we did not downgrade our lifestyle probably about a year. The reality would probably be there would be some cutting back and we could make it a couple years--knock on wood, I can't really imagine us both being out of work for longer than that.

 

[sjrec]

We would be fine at this point in our lives-but go back 30 years and it would be a different story. And we weren’t living above our means-just paying a mortgage, car payment-dealing with unexpected house repairs.

My heart goes out every one dealing with this-I can only imagine the stress they are dealing with right now.

 

[disneychrista]

I was faced with this this time last year. My employer closed down operations and couldn’t pay final pay checks. Because of my position I also continued to work in hope that we could figure out a solution and reopen. I worked for two full months not knowing when I’d get a paycheck.

I had significant savings and with cutting down on a few expenses I was able to make it through. And still have savings left.

I am now working a new job at a 30% pay cut. But thankfully because I lived below my means before I am surviving and not feeling effects of the pay cut.

 

[mnrose]

I'm retired. It's a different question. I think a more interesting thing would be how much of a financial setback (whether that's job loss or unreimbursed medical expenses) could you weather.

I *think* I've planned well for retirement, but the big crap shoot is medical expenses. What's going to happen to Medicare? Social Security? Health care costs in general? My health? These are things that you TRY to plan for, and do it as best you can, but there's still things that can happen that are completely beyond my control that could significantly and permanently affect my financial position. I guess that makes me irresponsible?

 

[mnrose]

We would be fine at this point in our lives-but go back 30 years and it would be a different story. And we weren’t living above our means-just paying a mortgage, car payment-dealing with unexpected house repairs.

My heart goes out every one dealing with this-I can only imagine the stress they are dealing with right now.

Exactly. When my husband and I bought our first home (35+ years ago), we were right on the edge. With our dual income, we could make our expenses just fine, but it was tight. We ate a lot of bean burritos (as in every day ....and it was made from scratch because a pot of beans was cheap and it was what we could afford). If something had happened then (say a car accident that put either of us out of work for any length of time), it would have been all over for us and we'd have been in some deep doo doo very quickly. We bought because it was cheaper than renting. So, renting or owning, we would have gone under quickly.

Today, my life is wildly different financially. I feel very badly for anyone who faces the loss of a paycheck through no fault of their own.

 

[LilyWDW]

Right now I have enough in savings that I could cover my normal take home for 11.5 months.

But that is only because my dad died and left me some. Before that I was sitting at 2.5 months. Along with putting all that into savings, I was also able to pay off one debt of 3k (credit card) so all the debt I have left is medical or student loans. Luckily we are getting a 2% raise starting in February AND I halved my Heath Insurance premium due to meeting specific criteria. That money will get funneled into my savings while the money I am now saving from the paid off debt will get funneled into the medical stuff.

It took me a long time to get here though. At one point I was working 4 part time jobs to try and make ends meet and couldn't. If my power bill was higher due to heat in the winter, I had to ask for help. And it's not like I keep my heat up very high... right now it is at 65.

 

[L&Lfan]

Several years living off savings and by selling investments but there would be no Disney trips during that time.

 

[tcufrog]

My DH co-owns two oil and gas tool companies. During the last downturn in the oil and gas industry, we went probably more than 6 months without a paycheck. We had pay cuts and lost employer-provided health insurance before then. The companies cut way back and were barely able to keep their doors open during that time. Things are going well now and we're finally at the point where the companies can reimburse us for back pay. The oil and gas industry is very volatile. Anyone who wishes to make a living long-term in this industry lives conservatively and saves all of the extra windfall when times are great. We've weathered two major downturns that way. It's stressful but you can do very well financially if you make smart choices.

 

[GreatLakes]

Quite a while. If either my wife or I were out of work we could survive long term on just the other salary. We don't both have to work, we choose to. Add in the savings from not needing daycare during that time and we would barely notice.

If we both lost our jobs, a few years with some lifestyle adjustments. I have our personal financal situation entered into the same FPRM software I use at work so we can run scenarios and stress tests so it would be pretty hard to really surprise us.

 

[Christine]

Exactly. When my husband and I bought our first home (35+ years ago), we were right on the edge. With our dual income, we could make our expenses just fine, but it was tight. We ate a lot of bean burritos (as in every day ....and it was made from scratch because a pot of beans was cheap and it was what we could afford). If something had happened then (say a car accident that put either of us out of work for any length of time), it would have been all over for us and we'd have been in some deep doo doo very quickly. We bought because it was cheaper than renting. So, renting or owning, we would have gone under quickly.

Today, my life is wildly different financially. I feel very badly for anyone who faces the loss of a paycheck through no fault of their own.

Some would say you should have never put yourself in that position all those years ago. Or that maybe you bought your first home above your means.

Those two statements may be true but, right or wrong, thousands of people in this country put themselves in that position when they are starting out. I know I did. There wasn't a cheaper house that I could have bought than the one I did (had a mortgage of $757) and it was tough. I think there are just times in your life when you are starting out that you take a financial risk knowing it won't be forever, but man, if something goes wrong during that time it's all over very quickly.

 

[Boardwalk Jedi]

Some would say you should have never put yourself in that position all those years ago. Or that maybe you bought your first home above your means.

Those two statements may be true but, right or wrong, thousands of people in this country put themselves in that position when they are starting out. I know I did. There wasn't a cheaper house that I could have bought than the one I did (had a mortgage of $757) and it was tough. I think there are just times in your life when you are starting out that you take a financial risk knowing it won't be forever, but man, if something goes wrong during that time it's all over very quickly.

Yup. We live in a high cost of living area, so there really wasn't much of a choice when we bought our second home. Our first, we got cheap and put a lot of work into. Our second house came at the height of a seller's market.

 

[mnrose]

Some would say you should have never put yourself in that position all those years ago. Or that maybe you bought your first home above your means.

Those two statements may be true but, right or wrong, thousands of people in this country put themselves in that position when they are starting out. I know I did. There wasn't a cheaper house that I could have bought than the one I did (had a mortgage of $757) and it was tough. I think there are just times in your life when you are starting out that you take a financial risk knowing it won't be forever, but man, if something goes wrong during that time it's all over very quickly.

Like I said, I would have paid the same in rent, so it's not like I sent my monthly costs higher than they would have been. My mother gave us the downpayment. It definitely worked out for us, as the home doubled in value in 4 years time. But, with any bad luck, we could have gone bankrupt. Fortunately, it didn't. But, I totally get why people stretch to get into that first home.