I got laid off yesterday. Unfortunately I don’t have any “emergency savings account” although I got some severance. I’m not sure what I’m going to do next. I’ll probably just get another software job. It would be nice to work for myself or write some software that I could sell for millions but I don’t think either of those things are going to happen. I also booked 1 hour with an employment lawyer and after finding out how much that costs the thought of writing the LSAT briefly crossed my mind.
This is my first time getting laid off so I don’t have much experience going through this, but so far I can offer the following advice:
- Don’t take on so much debt that you can’t afford to make payments if your next job doesn’t pay as much or if you can’t find a new job for a while. For example, banks suggest that no more than 40% of your gross income is used to pay off debt. Ideally, in a two-income family where both salaries are roughly equal, no more than 20% of your gross income should required for debt servicing.
- Talk to a lawyer to make sure that your severance package is fair.
- It’s probably a good idea to have an emergency fund in case you cannot find a job after your severence and EI runs out.
- Always keep your resume updated. I updated mine about a month ago, so I just need to do a bit more polishing. I still need to modify it for each job I apply for but at least it’s not 3 years out-of-date like I’m sure it is for some of my colleagues (for whom this lay-off came as a bit of a shock).
- Consider finding a new job quickly in order to keep your salary as well as the severance package from your previous company. It’s tempting to take some time off before starting to look for a job. That means less money, but also, you may not find a job before the severance runs out.
I didn’t write my first blog post in many months just to get some pity from the blogosphere. I’ve been so busy since my daughter was born in May and the few months leading up to that, and today was my first day at home looking after her. So during her naps I’ve been going through my long TODO list of things that I’ve wanted to do for a long time but haven’t had the time to do.
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I have quickly changed my mind (see my earlier post) and decided to go with President’s Choice Financial Tax-Free Savings Account (TFSA) instead of ETrade for short-term savings. I will keep my ETrade TFSA though and use it once I have money available for longer term savings.
I compared PC’s Tax-Free Interest Plus Savings Account with ING’s Tax Free Investment Savings Accounts and PC’s interest rate is 1.05% higher. We also have all our daily banking and high interest savings at PC now so being able to use PC for our TFSA.
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A lot has happened recently. My wife is expecting in April, we bought our first new car, and I recently changed teams at work and turned down an interview at another company.
Baby: Our first baby is on the way and everything is healthy and good so far. We’ve received a few gifts so far and the only purchase we’ve made so far is a crib and a change table. The crib and change table we opted for are a bit more expensive than others (see stokke.com), however, they should last a long time and actually transform into chairs and a desk, respectively, when the kids get older, which might save a bit of money later on. The next big purchase is going to be a stroller and a car seat. We’re looking at getting a car seat that can handle up to 30lbs (see Graco SafeSeat), to get more use out of it which may end up saving money later, or maybe not. Our stroller will be something that folds up and that comes with a bassinet attachment so hopefully we can get away with just the one stroller and maybe a compact umbrella stroller and a Baby Bjorn and that’s it. An acquaintance of mine has 8 strollers (2 kids with 1 more on the way) and I still haven’t figured out why. Kids certainly are expensive and with these recent purchases and a 1 week vacation coming up (our last one before kids!) we have certainly found ourselves spending less on other things. We didn’t do any Boxing Day shopping this year and didn’t buy ourselves any big presents.
Car: We bought a new car. Our other car was a 2-door and we figured it would be awkward to take the car seat in and out of that car, not to mention the fact that the trunk is fairly small. So we bought a nice new wagon. We felt that good mileage and low carbon emissions were important so we bought the most efficient wagon possible. We also wanted safety features like airbags, ABS, stability control, which our old car didn’t have. We’re just trying to sell our old car now (we’re selling privately because you can get more money that way, rather than trading it in to the dealership). Speaking of cars, I also did some repairs on my old 4-door Tercel. They were a bit expensive but it’s still cheaper to maintain an old car than it is to buy a new one.
Work: I am in the process of transitioning from one team to another, the first big change since I started at my present company 1.5 years ago. I recently had the opportunity to interview at a large, successful software company but turned it down because I would be missing out on opportunities at my current company. Having been there for 1.5 years already, I’m in a good position right now. I know lots of people there now, I know the business and the technology so I can be productive and possibly get some more promotions eventually. If I switch to a new company I have to start the whole process of meeting people and becoming acquainted with a new business all over again. I enjoy doing that but not every 1.5 years. Not only that, but at my current company I have built up a bit of seniority now and I can take 2 months parental leave and work part time after that, and work from home from time to time in order to spend more time with my wife and baby. Doing something like that would be very difficult just starting out with a new company.
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Scotiabank has bought my broker, E*Trade. This the second time my broker has been acquired by an acquisition. Previously I was with a full-service broker, Clearsight, which was purchased by Wellington West. As soon as Scotia raises the commissions, I’m leaving. I’ll probably go to Questrade.
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Sorry if anyone had any problems with this blog in the past 2-3 hours. I tried upgrading Wordpress 2.2 and it was an utter mess. The problem seemed to be that my K2 theme does not play well with 2.2. After wasting 2 hours I decided to roll back. The most recent database snapshot had some problems, so I had to use last night’s. The end result is that I lost 3 user’s comments. I restored those manually but if you provided a website I didn’t put that in and also the timing of the posts are screwed up.
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Over the past year I have been an advocate for using an advisor as a source of some good advice and as a way to keep a small barrier between you and your money, to prevent over-active trading. Frustrated by the fact that Clearsight Wellington West, after getting rid of my former investment advisor, has not bothered to call me, and unimpressed by what I see on the web pages of investment management companies, I have been contemplating going it alone. The main reason I got a financial advisor was to stop me from doing stupid things and that worked. It was also done to save myself time. But if I don’t do stupid things and stop trying to be too active with my money, then it should not take too much time. Having an advisor for the past year was a great experience. Over the year we never sold a single investment. I don’t think I ever went a year before without at selling a mutual fund at some point. Am I ready to go it alone? I don’t know, anyways, it is just an idea at this point.
After my unsuccessful search for an investment management company, I briefly looked at options for self-directed RRSP accounts. I first looked at TD Waterhouse (I used to be at TD Waterhouse and TD EasyWeb) because I really like their web services. I also looked at E-Trade. Their trades are a bit cheaper at $20. My portfolio as it stands right now mostly consists of a bond mutual fund, a Canadian ETF, a Canadian small-cap mutual fund, a US mutual fund, and an international mutual fund. I might switch the US component to an ETF and leave the CDN small-cap and international where they are for the time being. If after the transfer is all done from Clearsight to E-Trade and I buy 1 ETF, if all I have to pay is $20 then that is pretty good. It looks like their have some conceirge account transfer thing so the transfer fee is waived if you have more than $25,000. I have that much but my wife doesn’t so I’ll have to think about what to do there.
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