Expect the Unexpected

It seems that everywhere you turn today, there is doom and gloom about the state of the economy. Debt ceilings and deficits. Taxes. Unemployment. Here in Alabama, unemployment is currently higher than it was during the recession. If the recession is over, why are we still hemorrhaging jobs?

Sharon, the author of one of my favorite blogs, My Year of Spending Less and Living More (Musings from a Mid-Life Mom), has an excellent post today about planning for a potential layoff. She goes into detail about her plans to further cut spending in order to stockpile cash in the event a layoff does occur.

As the only adult in my household, the thought of a job loss gives me the shivers. I currently have $8000 saved as my own personal little emergency nest egg. Once I get out of debt, I will add to it, even as I continue to save for a home and for Princess Penelope's education. Dave Ramsey wisdom says that I should put aside the $1000 for a mini emergency fund, put the rest toward debt, and then I would be out of debt completely in about 2 months.

That's a good thought, and I agree with it.... EXCEPT, that $8000 allows me to sleep at night. While my current position is secure, I know that could change as it did with many of my colleagues on July 1. I knew there was a possibility of job loss with contract changes back in the spring. Had I completely thrown all of that $8000 to debt in the spring, I'm not sure I would have ever slept between March and July 1, because my safety net would have been gone. There's something to be said for a decent night's sleep.

I really need to have more in my safety nest egg. But right now I'm comfortable with the fact that should the worst occur, I will be able to ride it out for a while. I wouldn't be in danger of losing my home since I rent from my Dad (how many people are lucky enough to be able to say THAT?). There are places were I could cut the budget further --- and if necessary, I could cut back to minimums on the debt repayment. For now, I don't have the worry that Sharon is facing, however, I don't think an analysis of my budget to identify where I could seriously trim the fat is out of order either. And I may just get to work on that tonight and then get another good night's sleep!