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When crap happens
Posted on November 29th, 2008 17 comments
Who knows what lies on the road ahead?
Yesterday, my partner was told at the end of a long work day that the employees would not be getting paid. The company had run out of money. All employees are paid monthly, so he will lose his entire paycheque for the last month. In addition, the company owes him $500 worth of out-of-pocket expenses. Needless to say, we need the money; my partner makes about 75% of our household income.
What bothers me more than the loss of money is that he has suffered so greatly in order to meet his commitments. Working such extreme hours has meant that he has injured the muscles in his back, causing him extreme pain and limiting his mobility right now. Of course, if he knew what lay ahead, he would not have bothered to force himself out of bed in the morning, in pain, in order to fulfill his commitments. If he had stayed in bed, his injury would have likely cleared up, instead of becoming what appears to be a lasting problem.
This also came at a bad time. I quit my job this week to start my own business. And we will be moving to a new city for my partner to start a new job. Not to mention the holidays.
Despite this let-down, I thought I would take this opportunity to share what valuable lessons I have learned. With a looming economic recession, more businesses may shut down and more employees may find themselves in a similar boat. Here are some tips to deal.
1. Have an emergency fund. I really am grateful for Gail Vaz-Oxlade, who drilled home the importance of an emergency fund, and thank God I listened to her. We managed to get an emergency fund in place before this unpleasant surprise - it’s not Gail’s recommended 6 months worth, but it should be enough to cover us until my partner starts his new job. This really made me realize just how important it is to save and keep enough cash liquid. Think something like this can’t happen to you? Think again. Like Gail says:
Crap happens - that’s life. It’s how you handle it that separates winners from losers. And an emergency fund is the best tool to deal with crap.
2. Invoice, invoice, invoice. If you are a contractor or are self-employed, invoice on a regular basis. It’s easier for the company to pay you in small doses, and if the bottom falls out, at least you’ll be paid something.
3. If possible, get paid upfront. It depends on the type of work you are doing, but wherever possible, get the cash up front, or at least a reasonable down payment. Even companies that have the appearance of looking solid go under. And people who you trust sometimes disappoint you. Avoid loss by establishing your personal policy on when and how you are paid.
4. Know the warning signs. My partner knew the company was not doing well but still thought he would get out in time before something like this happened. Nevertheless, if it looks like a duck… it probably is. If you do not trust the organization or person you are working for, get your money and get out.
5. Do not buy things with money you expect to get, but do not yet have. Thankfully, we are not in this situation. But it is an easy trap to fall into! We never thought twice about whether this money would come in.
5. Determine how much you can reasonably take on. Although I am grateful for having the extra money from my partner’s second job, I realized that we cannot take on as much responsibility as we wanted. I recognize now that it may take us longer to reach our financial and personal goals. But it’s not worth the strain on our mental and physical well-being.
Sometimes, life throws us curve balls and we can’t do anything about it. All we can do is handle what we’re given the best we can. I’m grateful for the opportunity to learn these great lessons - who knows how they will benefit me in the future! I hope you can learn from my experience too.
17 responses to “When crap happens”
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an ostrich named sam November 29th, 2008 at 08:21
That’s rough right before Christmas, but you sound like you’ll be OK. I hope that everyone who worked for your husbands company were as smart as you two. Good luck!
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oh no - I am so sorry to hear of this — it seems like you are staying positive, that is what seems like half the battle… you are very intelligent, so you guys should be okay…
good luck.
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I’m so sorry to hear this! I’m glad though, that you had some emergency fund in place.
Your a fantastic “Saver Queen” and fantastic with money so you’ll pull through!
Good luck with your own business! Much success to you in it.
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This makes me so angry!! Surely his company knew before end of day yesterday that they weren’t able to fund their payroll. It sounds as though they haven’t been dealing with him in good faith. I hope his injury gets better and he is able to find something else soon. Good Luck!
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Brenda November 29th, 2008 at 11:45
Sorry to hear about your situation, but obviously, your attitude will get you through this. Seeing the positive side of a bad situation will make this a small blip in your life. Good luck in your business, and in your move. I’m sure a fresh start will help both of you!
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Catherine November 29th, 2008 at 13:20
What a blow to you both. “‘They’ say that what doesn’t kill you makes you stronger” - though it seems all the worse because your partner was acting in good faith and his employers obviously were not.
How lucky that you have each other, you have an emergency fund, excellent organizational skills, and best of all, such a strong, optimistic outlook.
Best of luck on improved health for you both, and much success on your future endeavours! -
I’m so sorry to hear this. Like Money Mnder said, the company must have realized the situation they were in for some time. That’s pretty unethical.
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i’m sorry the 2 of you are going through this right now.
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Saver Queen November 29th, 2008 at 21:16
I can’t thank everyone enough for their kind comments. Your support means the world to me. Reading your comments nearly brought tears to my eyes. My readers are the best! Thank you all!
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Wow. What bad news right before x-mas. At least you seem to have the right attitude about moving forwards. I hope things improve for you soon.
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So sorry to hear of this news, but thank goodness you have a wise head and can deal with this. take care and good luck with everything too.
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Sorry to hear about this bump in the road. But like others have said with your positive attitude I am sure things will work out.
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Ohhh, ouch!! So sorry to hear the news, SQ! I hope your partner’s injury can heal now. I can’t say I’d have the same reaction you both have had (apart from anger, perhaps), but know without a doubt you’ll be fine. Your optimism despite this low point is proof positive - and proof that planning ahead is vital, particularly in these uncertain times.
Take care and best of luck to you both!
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Sorry to hear about your situation. And thank goodness for your emergency fund too. I think it’s really bad when the company keeps this kind of information from their employees! Hopefully things will get better soon for the two of you. All the best!
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Vanessa December 1st, 2008 at 15:06
So sorry to hear of this SQ… I was happy to read of your emergency fund though and your determination to stay positive… I think that’s what carries us through the low times. I wish you both the best for the future… too true that it was pretty crummy for his company to do this at Christmas!!
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[...] Gail responded to a recent comment I made on her blog. (You can read the background to this story here). In response to my disappointment yet optimism over my recent mini-financial crisis, Gail wrote [...]
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Sharon V. December 23rd, 2009 at 01:12
I’m so glad that you still have your positive point of view. That seems like the best part of an emergency fund; you can buy yourself time to look around and be grateful for what is still going right for you. I’ve seen so many places close up here in Guelph, 2 that I worked at as a temp. You’re not alone, but thankfully you were more prepared than most. Good luck in your travels and journeys.
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