Hi everyone today I thought I would write about something that I’m going through. On Sunday a strike was narrowly avoided by my union as we came to an agreement with the province of Ontario. I am a member of CUPE (Canadian Union of Public Employees) I am one of 55,000 people on strike to protest the cuts to education the government has made. The goal of the post is to help you financially in case you are ever laid off from your job, go on strike like the General Motors workers in the United States effecting 50,000 employees in the US and around 10,000 in Canada.
My situation started back in May, about the third week of May to be precise when I was handed lay off notices, which were to take effect August 29th. At that time I was working 40 hours per week, and at the start of Sept I would only be working 12.5 hours per week, just like that I had lost 69% of my hours. In my case I had three and a half months to prepare myself for lower hours and a possible stoppage of work. I was fortunate it this regard other people aren’t so lucky, you could get laid off immediately from a job without any warning.
Below I came up with some ways to help you through a job loss, a reduction in work hours or a strike if you belong to a union.
Live Off Investments
If you invest in the stock market through a Tax Free Savings Account you could withdraw some month out of the account if you really need it as the money is tax free so you won’t have to pay when you withdraw it. As many of you know I am a dividend investor and my TFSA account provides me just over $2,000 a year in dividend income, if I really needed to I could use this help me in any financial problem that I might have in the future. I wouldn’t withdraw any money from an RRSP account unless you absolutely had to because you will need to pay taxes on the money you withdraw. My friend Tom from Dividends Diversify from a very good article called Living Off Dividends I think it is a great post and everyone should go and give it a read.
Build An Emergency Fund
Having a emergency fund will protect you and your family from a job lost, reduction in hours and a work stoppage. Also if something unfortunate happened and you would be unable to work for a long stretch of time. In the media and books you will see a lot of people say its ideal to have a three to six months worth of income in an emergency fund. I am a cautious person so I would recommend six to 12 months.
I currently have 12 months saved up in my emergency fund. I was able to save up this amount by putting money aside every pay. I currently have my emergency fund sitting in a online bank here in Canada called EQ Bank I currently earn 2.30% in interest. If I stayed with my regular bank I would only be earning 1.07%.
Pay Off Debt
If you suddenly got laid off or injured on the job this idea might not be the best. But if you know ahead of time that there maybe possible work stoppage or unrest in the months ahead I believe it is a good idea to pay off debt to free up your cash, in case the worse happens.
For me when I mentioned above that I got my layoff notices in May, I had two loans a car loan and a loan to my parents. At the beginning of August I had the ability to pay off my loans and I did so. This was a great relief to have these paid off now it is freeing up my cash flow to invest and save for my future.
Reduce Monthly Bills
If your household still has a landline phone, cable and internet did you know you can have your monthly bill reduced? All you need to do is phone your provider and ask for a better price, if they are hesitant tell them you are looking at another service provider. My family has had pretty good success doing this, they still have all three services with a single company and they phone and negotiate a better price, they usually end up saving $40 to $50 per month.
Another bill you could potentially save on is your cellphone. If you have the ability to save up and buy your phone outright that gives you the opportunity to choose your own monthly plan and you can changes plans at anytime. Another advantage to this is your not locked into a two year plan and pay more than the phone is worth.
Save On Groceries
Another good way to save money is when grocery shopping. My family uses the app Flipp which has all the flyers from our local stores and before we go shopping we look at all the flyers to see what’s on sale. If not sure if every Walmart price matches but our local store does so if we see something on sale from a competitor we bring my phone and show the cashier the flyer from the Flipp at and we pay the reduced amount. I’ve also found that you should never shop on an empty stomach because that way everything starts looking good and before you know it your cart is full of groceries that you don’t need and causing you to spend more money than is necessary. I’ve found planning ahead and writing down what you need for the week helps me to reduce my grocery bill, it allows me to walk into the store and remain focused on the things that I need, not to often have I strayed from the list and purchased other things.
Use Loyalty Points
How many of you belong to a loyalty rewards program? I certainly do I currently have the PC Optimum rewards program and that is the only one I use. To try to maximize the points that I earn I have a President’s Choice Mastercard that is linked to the program and my account and I use it for every single purchase I make. Every week (Thursday) you receive your own personalized list of bonus points you could earn if you buy certain products. I don’t buy everything on the list because I usually don’t need them, but some are helpful for example I could receive an offer to buy gas from a Mobil gas station, I take advantage of that every time. In the last year and a half to two years I had accumulated 345,000 points in dollar terms that means I have $340 worth of groceries I could buy.
Since the beginning of September I have noticed that my fuel bill has been rising significantly and with my reduced work hours I wanted to try and get my loyalty points to help me financially. The one down side to the PC Optimum program is you can only redeem the points for groceries you can’t exchange points for gift cards. Thankfully I found a way around this starting last week I am having my family buy me gas gift cards from Mobil in exchange for buying their groceries with my points, that way everyone wins. I expect this will save me with my current job about $50 to $60 per week.
So if you belong to a loyalty program and you lose your job I highly recommend looking into redeeming your points and get them working for you. If you can redeem for gift cards for stores then perfect that will be a big savings for you. If you can’t redeem for gift cards like myself talk to family members like I did.
Well folks there are a lot more ways to save money, but I don’t want the post to become too long. I hope you are never in a situation where you lose your job or face a work stoppage. I can only say prepare for the worse just in case something happens and that way you will be protected.
Thanks for reading