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The very first thing that most PF Bloggers will recommend to anyone within earshot is that they start an emergency fund. Just a small recap;

Emergency Fund - An amount of money equal to about 3-6 months standard household expenses (including housing, all bills and utilities, and food money) in a safe but easily accessible account somewhere. Emergency funds should NOT be used for anything except true emergencies. That means they are NOT used for making up 'a little shortfall' or to pay off bills.

I found out yesterday that it's a GOOD thing to have an emergency fund nowadays.

You, You and YOU, Come with Me

As a consultant, my job isn't 100% work. There are times that I am on the 'bench' between assignments. The company I work for was acquired by a larger company late last year and they have slowly been integrating the two companies together.

I actually changed jobs WHILE the company was being acquired (which was scary to say the least) and first heard about the merger during my two weeks notice switchover. I was a bit concerned that being the new guy, that I would also be the first to hit the street.

At that point, I had saved up a respectable emergency fund that would probably last a couple of months. But I went into save mode for the first few paychecks to make sure;

• I canceled my 401k contributions for a month before the job change (knowing that a change was coming up, and we were in negotiations for awhile with 2nd, 3rd and 4th interviews going on).
• I upped my W2 dependent deductions.
• I paid off or consolidated as many bills as I could with what I had.

What this allowed me to do is switch to 'Save for the Winter' mode. I was able to (temporarily) put away 75% of my take-home pay into a savings account.

Doing this for a couple of months allowed me to get to the 3-6 month savings mark in a very short amount of time. Once I reached that stage, I switched all this money flow into maxing out my 401k contributions for the year (which took only another 1 1/2 months). And then I went back to my normal schedule.

Stand Over By That Wall

You see, the company that I originally hired on with had a reputation for having a LONG bench, and quite a few people ON that bench. They were high-end business process re-engineering consultants and process improvement gurus. These kind of people don't grow on trees, and when they walk in the door, people stop and listen. The only problem is that they are also high-bill rate, low-engagement type of employees. When they're on the job, they make LOTS of money for the company, but getting them those jobs is difficult at the best of times. With the recession causing companies to reconsider anything 'extraneous' (i.e. anything they can't live without).

So, how did I fall in with this group? I'm a Program Manager and Enterprise Architect (wear both hats) and have a long track record with building accounts and software development teams.  I can deal with clients, corporate headquarters, and all levels of developers and get the ideas across to all of them. I work like the glue that makes it all stick together.

Even with that, I ended up on the bench myself the first few months of my job, because the client I was 'intended' to go work for didn't pan out like everyone thought they would. This wouldn't have concerned any of the employees at the old company, but I've been around long enough to know that most big benches eventually go away.

Would You Like a Cigarette?

The first chance I got, I jumped at a long-term engagement, even though it's 1 1/2 hrs drive from home. It's actually not that bad a drive, just long. The client is great, the co-workers are good, and the work is interesting, so it's not too bad.

The clincher is that I just heard yesterday that 11 other people in my department were let go yesterday. This, out of a pool of about 30 people. It even affected some of the upper-management chain (the manager for those people). It was a shock, but not COMPLETELY unexpected.

It made me think about how a little good planning (emergency fund) and luck (finding a good, long-term gig) can keep your life on track.

Since you can't really 'plan' for good luck, you CAN make sure that you're covered in case of Bad Things ™  happening to you. 

(Bang!)

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