Are You Ready To Be Fired?
People lose their jobs and income. It happens. It could happen to you. In my own wonderful country, our government was shut down for the better part of a month, and many government employees were without several paychecks. This is an awful situation in a country where 40% of adults couldn’t cover a $400 emergency. Not getting paid for a month is a heck of a lot more than $400 of emergency.
I sympathize, I really do. Through no fault of their own, millions of people suddenly have no income for a sustained period of time. I'm sure many of them are completely stressed about where their next mortgage payment or money to pay for their desperately needed medication is going to come from. I wonder how many families will be made homeless because of this interruption to their income stream?
And this could happen to you too. Again, through no fault of your own, you could find yourself without income for weeks or months at a time. Economies and businesses shrink, jobs end, unexpected illnesses or injuries happen. As with so many things, whether you come out the other side of a job loss or emergency in decent financial shape comes down to preparation and planning. In order to prepare and plan, you have to be willing to grapple with some difficult topics, which are easier to avoid than contemplate, but the potential downside of not being prepared could be far more ruinous that a few minutes of discomfort. If it helps, put on your comfiest pajamas, light a nice candle, groove out to some quiet music, and write your plan down in a pretty journal. Make the process connected to as many positive things as you can so that you can work through the stress of dealing with an uncertain future.
The first step to being prepared for being fired is to have 3-6 months of expenses saved up in cash. In order to do this, you need to know how much you spend per month. A spending tracker app like “Spending Tracker” (which is free on iOS and Android) will help you know your monthly expenses. Then, you need to figure out how much you need to save and reduce your expenses so that you have enough money so you can cover 3-6 months of expenses or moving or both. If you’re in a field where jobs are plentiful, you can probably get away with having closer to 3 months, but if you’re in a job that is hard to find or the field is shrinking, you need to have more like 6 months of expenses, or even more. Have enough that you can sleep easily, knowing you’re covered. Personally, I keep 7 months of expenses in cash, and I’m going to expand that to 8 months soon.
Do not rely on having a UAE credit card because your account can be quickly closed if the bank finds out you no longer have a job. Also, make sure you are not in debt in the UAE, because that could make it illegal to leave the country or return. Check and see what you could realistically sell your car for, and if that is more than you have left on your loan, you need to figure out how to pay the difference.
Another thing to help you sleep at night might be researching and purchasing long-term disability insurance, which can guarantee you a level of income in case of medical emergencies. Several companies in the UAE offer it, and the cost isn’t that bad! Make sure you find a product that is right for you.
The last thing to think about is actually an advantage we have as expats. We can survive in other countries. We don’t have to stay in a place with a high cost of living. Personally, if my job ends for any reason, I plan on heading to South East Asia so that my emergency fund lasts longer. This is the concept of geographic arbitrage, where you go to a cheaper place to make your cost of living lower. 3 months of expenses in the UAE is more like 6-7 in Thailand, if you live frugally.
I know that this can be unpleasant to think about initially. It’s hard to contemplate an uncertain future. But the benefits of being as prepared as possible are also very rewarding. If you get your financial house in order, it will give you the freedom to escape a bad situation and not be trapped.
This doesn’t only apply to being fired, it might just be you getting fed up with your job and wanting to try for something else. If you have this plan in place, you’re ready to take advantage new opportunities without worrying if you’ll have to eat cat food!
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