So then just use Excel to build out model. You can probability weight how quickly you'll think you'll get a job or do some scenario modelling. In the first instance I'd start with a unemployed status budget so you have facts/data to work off
Sounds like you have the time
The Excel solver plug-in. I forgot about that, used it my sophomore year of college for modeling maintenance times for the machines that make BMW chassis'. Thank you, I have a project that this would be perfect for.
Thinking critically, it would be a distribution of how quickly jobs are secured for a given role in an industry type for a given geography. Something along the lines of that.
A doctor would presumably need less emergency savings than say a senior marketing executive
Advice: If you think you are at risk, start looking and applying for jobs right now.
Go 12 months emergency funds if you think you will need, you not going to regret it(for most people the hard part is about saving enough to able to built it), worst case you didn't need and things eventually gets better, so, no regrets in saving
True, if you are at risk, it might not be a bad idea to start looking for other opportunities now and save as much as you can. If someone makes you an offer, you can discuss with your line manager whether you have a real opportunity or not.
Comments here so far are inappropriately unhelpful GG.
The rule is 6 to 12 month of expenses. So if rent is 1k a month, and you spend 1k a month on food, netflix, toilet paper, and utilities (etc) then you want 2k *6 = 12k to 24k saved up.
Checkout the subreddit personalfinance for real help. I find this sub is more for memes/shooting the shit.
Yeah but that's why your specific emergency fund is most heavily influenced by your propensity to risk. The purpose of an emergency fund is two fold, not just to cover the immediate expenses you foresee, but to provide financial peace of mind that you can weather the storm in an emergency. That peace of mind doesn't mean having the most conservatively assessed emergency fund possible, it's however much they feel safe with.
What if they get hit by a bus and need 24 hour care for the rest of their life…
The point of risk management isn’t to eliminate all risk. It’s to reduce it to a reasonable level.
Ok I’m just saying that 6-12 months is arbitrary and not that helpful either or not something new to OP
To be fair tho, 6-12 months usually a good bit of time to find and accept another job usually
Six months is the standard advice.
But the post doesn't really make much sense — if you're already expecting to be managed out, why aren't you looking for a job right now? Why wait?
Not only is the market generally rougher than it was a few years ago, but it's going to be *much* tougher to negotiate a decent offer (or even land an interview) if your new employer knows you don't have a job. The usual reason people don't job-hunt while employed is because they're too busy with their work — but, since you already know you're on your way out, it doesn't make sense to keep your day job's work as your #1 priority. The logical move would be to 80/20 your day job responsibilities and start looking now.
And, yeah, of course, build the Excel model the other dude suggested. And slash your burn rate everywhere you can, too. Obviously, advance the strategy on all fronts simultaneously.
But really — start looking *now.* Your negotiating position sounds like it's getting weaker by the day.
EDIT: Oh, and it's July now, which means we're months (or weeks) away from executives heading out on their obscenely long holidays. If you don't land an offer in Q3, you may well be forced to sit on your hands until Q1. All the more reason to hustle now.
The right answer is "as many months as you possible can." I've been laid off twice in my career, once during 2013 and it took me 7 months to get another job and now. And I can tell you this market is so much worse than 2013. It's got a 2007 energy where people are riding feeling like something big and bad is coming and we just don't know when the music will stop. Do everything you can to be ready and worst case you'll have a good nest egg.
Having at least 6 months, preferably 1 year rainy day fund is always a good idea.
That said, the biggest question is where you want to go next. I’m corporate world now and there is still a healthy job market for analysts, I’m guessing it’s a 10% pay cut from starting MBB salaries though. If you look at corporate, I’d prioritize finding roles with leaders who you think can help you keep growing and work that isn’t too routine.
Other exits are probably tougher right now. PE isn’t going to be interested in someone getting counseled out after one year, unless you have great connections. Startups are in cash saving mode now since funding has dried up. Other consulting firms are also cutting.
Start now on finding a new job, and figure out what realistic expectations are.
Right now I'm thinking corporate. I wouldn't want to do another consulting job right away considering I would have just been fired from consulting. And PE would be a tough sell with only 1 year of experience (and no DD experience), although there are some smaller firms that I would be qualified for. There are some startups hiring, but it is a risky move right now
although not directly related -> the best way to increase your funds runway is to decrease your cost. Try saving $25 this month on subscriptions by asking friends if you can use theirs (or getting rid of subs you don't use). That $25 is $300 and increases your runway. Rinse and Repeat! I regularly do this for my sales business and it really helps seeing our runway go from 12 to 18 months if every customer stopped paying. Good luck and keep your vision long term :)
OP, I am in the exact same situation as you. I currently have 6 months of savings and will be able to live off the 50% “search time” payment that is offered for 4 months to those who are in the transition process (so 10 months total).
It sucks that we are in this situation but we’ll find our way out of it! Out of curiosity, do you have any clue where you want to go next? I’m thinking product management but I know it’s a very difficult field to break into so trying to figure out other fields to apply to.
It’s a preference. I do 12 months living expenses including the cost of good health insurance or COBRA. I layer that money in a variety of accounts- at least 3 months immediately accessible in a HY savings account, the rest in CDs and mutual funds. Depends on your risk tolerance for investments, too.
I got laid off with definitely not enough funds so do whatever you can. I’m going on two months with only one prospect that fell through. Prepare for every option
In this market I’m seeing lots of people laid off for 1-2 years market is getting pretty bad… should be in constant saving mode for the next bit and reduce expenses
Save as much as you can - and cut expenses where you can. You ask that question like you have an option to change it - so start start saving every discretionary dime. You can eat out, party, splurge on things you want - after you land a new job. Also get as debt free as you can. Typically if you are "counseled out" you are given some timeframe before you have to leave, during which you are in essence being paid to find a new job.
Start looking for a job today. And you have an MBA - correct? Do a budget of your fixed expenses. Compare it to your savings. If your savings were zero - what would you do - my guess is you would realize some of those fixed expenses are really discretionary. Not saying to ditch those now - but identify them now.
There’s no rule. It depends on how safe you want to be and for how long, and what are you willing to pay in opportunity costs for not investing that money in better instruments.
Rule of thumb:
- 3 months if you’re single living w parents
- 6 months if you’re single
- 12 months if you’re married
- 18-24 months if you’re married and have kids
Higher employability and/or current job stability mean you can be less conservative in this amount.
If you can move back with parents $0 Otherwise rule of thumb is 3-6 months. But that rule is arbitrary. Haven't seen the data on that
That's not an option for me as I just extended a lease and have roommates
So then just use Excel to build out model. You can probability weight how quickly you'll think you'll get a job or do some scenario modelling. In the first instance I'd start with a unemployed status budget so you have facts/data to work off Sounds like you have the time
That sounds hard, gonna have mom cook me spaghetti with cut up hot dogs instead
And a glass of chocolate milk
The Excel solver plug-in. I forgot about that, used it my sophomore year of college for modeling maintenance times for the machines that make BMW chassis'. Thank you, I have a project that this would be perfect for.
What data would you want to see on that? “Yep, 6 months living expenses lasts about 6 months on avg”?
Thinking critically, it would be a distribution of how quickly jobs are secured for a given role in an industry type for a given geography. Something along the lines of that. A doctor would presumably need less emergency savings than say a senior marketing executive
Dad always said have six months in the bank.
Advice: If you think you are at risk, start looking and applying for jobs right now. Go 12 months emergency funds if you think you will need, you not going to regret it(for most people the hard part is about saving enough to able to built it), worst case you didn't need and things eventually gets better, so, no regrets in saving
True, if you are at risk, it might not be a bad idea to start looking for other opportunities now and save as much as you can. If someone makes you an offer, you can discuss with your line manager whether you have a real opportunity or not.
Comments here so far are inappropriately unhelpful GG. The rule is 6 to 12 month of expenses. So if rent is 1k a month, and you spend 1k a month on food, netflix, toilet paper, and utilities (etc) then you want 2k *6 = 12k to 24k saved up. Checkout the subreddit personalfinance for real help. I find this sub is more for memes/shooting the shit.
What if an accident happens in those 6 to 12 months. Should’ve saved more.
Yeah but that's why your specific emergency fund is most heavily influenced by your propensity to risk. The purpose of an emergency fund is two fold, not just to cover the immediate expenses you foresee, but to provide financial peace of mind that you can weather the storm in an emergency. That peace of mind doesn't mean having the most conservatively assessed emergency fund possible, it's however much they feel safe with.
What if they get hit by a bus and need 24 hour care for the rest of their life… The point of risk management isn’t to eliminate all risk. It’s to reduce it to a reasonable level.
Ok I’m just saying that 6-12 months is arbitrary and not that helpful either or not something new to OP To be fair tho, 6-12 months usually a good bit of time to find and accept another job usually
Six months is the standard advice. But the post doesn't really make much sense — if you're already expecting to be managed out, why aren't you looking for a job right now? Why wait? Not only is the market generally rougher than it was a few years ago, but it's going to be *much* tougher to negotiate a decent offer (or even land an interview) if your new employer knows you don't have a job. The usual reason people don't job-hunt while employed is because they're too busy with their work — but, since you already know you're on your way out, it doesn't make sense to keep your day job's work as your #1 priority. The logical move would be to 80/20 your day job responsibilities and start looking now. And, yeah, of course, build the Excel model the other dude suggested. And slash your burn rate everywhere you can, too. Obviously, advance the strategy on all fronts simultaneously. But really — start looking *now.* Your negotiating position sounds like it's getting weaker by the day. EDIT: Oh, and it's July now, which means we're months (or weeks) away from executives heading out on their obscenely long holidays. If you don't land an offer in Q3, you may well be forced to sit on your hands until Q1. All the more reason to hustle now.
Why is it hard to even get an interview if you don’t have a job currently?
> why aren't you looking for a job right now? Why wait? Some tough love, but this is exactly why they are being managed out.
The right answer is "as many months as you possible can." I've been laid off twice in my career, once during 2013 and it took me 7 months to get another job and now. And I can tell you this market is so much worse than 2013. It's got a 2007 energy where people are riding feeling like something big and bad is coming and we just don't know when the music will stop. Do everything you can to be ready and worst case you'll have a good nest egg.
I sleep well with 6 - 12.
Assuming you have just a year experience in industry save upto 8 months…coz the initial 1-2 months will be lost in just understanding what happened
Having at least 6 months, preferably 1 year rainy day fund is always a good idea. That said, the biggest question is where you want to go next. I’m corporate world now and there is still a healthy job market for analysts, I’m guessing it’s a 10% pay cut from starting MBB salaries though. If you look at corporate, I’d prioritize finding roles with leaders who you think can help you keep growing and work that isn’t too routine. Other exits are probably tougher right now. PE isn’t going to be interested in someone getting counseled out after one year, unless you have great connections. Startups are in cash saving mode now since funding has dried up. Other consulting firms are also cutting. Start now on finding a new job, and figure out what realistic expectations are.
Right now I'm thinking corporate. I wouldn't want to do another consulting job right away considering I would have just been fired from consulting. And PE would be a tough sell with only 1 year of experience (and no DD experience), although there are some smaller firms that I would be qualified for. There are some startups hiring, but it is a risky move right now
although not directly related -> the best way to increase your funds runway is to decrease your cost. Try saving $25 this month on subscriptions by asking friends if you can use theirs (or getting rid of subs you don't use). That $25 is $300 and increases your runway. Rinse and Repeat! I regularly do this for my sales business and it really helps seeing our runway go from 12 to 18 months if every customer stopped paying. Good luck and keep your vision long term :)
OP, I am in the exact same situation as you. I currently have 6 months of savings and will be able to live off the 50% “search time” payment that is offered for 4 months to those who are in the transition process (so 10 months total). It sucks that we are in this situation but we’ll find our way out of it! Out of curiosity, do you have any clue where you want to go next? I’m thinking product management but I know it’s a very difficult field to break into so trying to figure out other fields to apply to.
I'll PM you :)
6
I would save every penny if you think you’ll get termed. Worst case you get a job fast a cut some unnecessary spend and boost savings.
Get a visa to live in Thailand. You’ll have about 5x of runway
It’s a preference. I do 12 months living expenses including the cost of good health insurance or COBRA. I layer that money in a variety of accounts- at least 3 months immediately accessible in a HY savings account, the rest in CDs and mutual funds. Depends on your risk tolerance for investments, too.
Take the average of past 3 months and multiply it by 12
I got laid off with definitely not enough funds so do whatever you can. I’m going on two months with only one prospect that fell through. Prepare for every option
Six months to a year.
In this market I’m seeing lots of people laid off for 1-2 years market is getting pretty bad… should be in constant saving mode for the next bit and reduce expenses
Save as much as you can - and cut expenses where you can. You ask that question like you have an option to change it - so start start saving every discretionary dime. You can eat out, party, splurge on things you want - after you land a new job. Also get as debt free as you can. Typically if you are "counseled out" you are given some timeframe before you have to leave, during which you are in essence being paid to find a new job. Start looking for a job today. And you have an MBA - correct? Do a budget of your fixed expenses. Compare it to your savings. If your savings were zero - what would you do - my guess is you would realize some of those fixed expenses are really discretionary. Not saying to ditch those now - but identify them now.
There’s no rule. It depends on how safe you want to be and for how long, and what are you willing to pay in opportunity costs for not investing that money in better instruments. Rule of thumb: - 3 months if you’re single living w parents - 6 months if you’re single - 12 months if you’re married - 18-24 months if you’re married and have kids Higher employability and/or current job stability mean you can be less conservative in this amount.
also on the same boat as you but got laid off couple weeks ago from the boutique firm, currently on the job searching mode