Most readers know that I work a day job. I don’t get into employee issues too often in the course of my day time responsibilities, but at least once each week I end up speaking with a co-worker who — for either illness or injury and both work-related and non-work-related — can no longer perform all the functions of their job. While many people can be assigned light duty for a brief period, the reality for most people is that they will be forced to take an unpaid leave of absence until they can return to full duty.
Unplanned and unpaid. You can guess how the conversation goes. “What?” they shriek in horror. “How am I supposed to support my family? I’m the breadwinner, I’m the main source of income.”
There isn’t much for me to tell them.
- There’s long-term disability insurance for those who elected it and pay for it through payroll deductions. Even then, for those that have the LTD, there is a waiting period of at least two or three months.
- They can use up sick, vacation and comp time for the absence, but most people I speak with seem to have less that two weeks combined of all available leave.
- Request an advance of sick leave that could cover a week or two at most.
- The Family Medical Leave Act (FMLA) provides job protection during a 12-week leave, but doesn’t provide compensation for the time away from work.
The saddest part of this scenario is that it never should happen.
Part of being a responsible adult is planning ahead. This is why everyone must have a savings account for emergencies. How much should you have? That depends upon your living expenses. But if for some reason outside your control you end up out of work for six months, you must be able to cover the cost one way or another. Accumulating sick, vacation and comp time is one way. Many employers have limits to how much can be saved, but for most people they never come close to these thresholds. This is one strategy, but the real power and security comes from the cash that you put away each month that is in a safe investment but able to be liquidated in a week or less if needed.
Don’t think you have extra money in your budget? Then you need to change your lifestyle. There is nothing like hitting rockbottom in an emergency for showing you the excesses in your spending. Start thinking today about what you would do if your paycheck stopped tomorrow. How do you eat? How do you pay the rent or mortgage? How do you pay the medical/hospital bills? How do you ensure your insurance premiums continue to be paid? How do you keep the lights on?
p.s. Check out the new NDQ Guide: 500 Tips the guide that will give you actionable steps to jump start your savings and investing immediately.
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