Thursday, June 29, 2006

Frightening me into fattening my emergency fund

OK, I am a bad bad blogger. I only have about $400 in my emergency fund. It was completely drained after our move last year, and then I built it back up, and then took more out to pay down a credit card. I've started to put money back into it (about $70 a month direct deposit) but in general I'm not too worried about emergencies in my life. Boyfriend is a graduate student with a stipend, which even if he stopped showing up to work (as another student did) they would pay him anyway. And I never thought too much about my own job stability, since it is nearly impossible to fire anyone here due to the ridiculous number of hoops you have to jump through to prove incompetence. And since I am not incompetent, I have job security.

Well, I found out yesterday that one of my coworkers' positions is being eliminated. She mainly did our budgets and other business type stuff, and her primary responsibility was to manage the budgets of the laboratory research that was brought in by a doctor who died about a year ago. The trials are all slowly ending and all but two of his lab staff have also been let go. The other doctors on staff thought they would be able to come up with more projects for them, but it just hasn't been happening like they expected. I don't seriously think that anyone else will be eliminated, and my job is paid for by a different study which I alone manage, and which is kind of a cash cow for the department. (Basically I was hired to do this one study, and so the department is financially able to take on a lot of other studies for me to do which aren't funded.)

So this all makes me wonder about the financial health of my department in general. We are not on 'soft' money - ie paid directly from grants - but that is more or less the way the budget seems to be balanced. The cash cow study ends in September 2007. It is kind of comforting to me to know that by that point I am probably going to be moving on to a new job anyway, but now I'm wondering, if that study happens to end early, is my job going to be in jeopardy? What if we don't enroll enough people? It does make me a little worried, and also a little mad since I know that if the doctors (who are extremely well compensated in the six figures, and I doubt the first number is a 1) gave up even 2% of their salary each, they would have been able to keep her on. They would NEVER reduce a doctor's salary or let one go if there was a temporary dip like this.

So I am thinking a little more about beefing up my emergency fund. I don't think that I will be eliminated, but this occurrence does give me a little pause to think about what might happen if the doctors don't bring in new studies to replace the ones that are ending.


B&I said...

It is always good to have a 'fatter' emergency fund because 'emergencies' cannot be predicted ...You can put your money in a high yield savings account like ING or HSBC that way you are just saving up for a rainy day

Grant said...

Just goes to show you that no ones' job is safe!

I'm kind of in the same boat, I should be contributing more, but it gets tougher and tougher with every paycheck!

Good luck!


mapgirl said...

I'm with B&I. I would make a fatter fund if you can. And even though it's tempting to raid the fund to pay down your credit cards, just think of this. If you have a fund and no job, at least you can keep paying the minimums from the emergency fund until you get back on your feet. That's why you shouldn't raid the fund unless it's really an emergency. (Of course, perhaps I should reconsider this when it comes to my dental expenses...)

Single Ma said...

I went through the same thing when I was deciding how much to save. My job is pretty secure but when I started considering all of the unknowns, I decided to beef it up a little. It's nice to have a cushion to soften the blow from unexpected events.

Sofia Britts said...

That's a smart move, Kira. Job security (or lack thereof) is one of the top reasons why people opt for emergency funds. Hence, you shouldn't be complacent about anything. And once you beef it up, please promise yourself not to spend it on paying your credit card again. That would only defeat the purpose!