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May 25, 2009
Posted: 1953 GMT

Tonight on the show we launched JobQuest – in the months ahead we are following several people who are out of work and seeking jobs Through their eyes we will gain an understanding about what its like to be looking for work in the worst recession for a century.

There is Jason in Atlanta and Jenny in Hong Kong. Jenny moved there from Ireland. Both are very quickly finding out how hard it is to get work. We will be following them in the weeks ahead.

Why are we doing this? Because with unemployment in developed economies likely to hit more than ten per cent it is crucial the rest of us understand the strains this puts on the people and on society.

And for those of us lucky enough to keep our jobs find we are grateful to be working longer hours for less money.

In all cases, It creates a fear that corrodes and eats into all of us.

It is true – most of us spend all we earn. We are usually a paycheck or two away from financial trouble. And if we stop earnings it isn’t long before financial trouble comes knocking.

The experts tell us we should have upto six months worth of salary as savings for the "rainy day."  Nice if you can – but I know of no-one who has that much spare cash laying around "just in case."  

We all have a family member, a friend, a neighbour who has lost a job – sometimes we have all three. Which is why we are taking this so jobless crises so seriously..because they are soon facing financial problems. 

What do you think is the right level of financial cushion ? One month ? Two ? Six months – or are you going to tell me: Quest – get real. We live hand to mouth.

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Filed under: Banking •Business •Jason Young •Jenny Torrie •JobQuest •Profitable Moment •Quest Means Business

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Gerry Murray   May 25th, 2009 8:20 pm ET

Richard, in Europe if we were to save for a rainy day we'd be saving constantly!
I run my own small consultancy & my aim is to always have enough cash to pay 3 months overhead, which includes my salary. As for savings, that can be quite a challenge...Gerry Murray
Thinking Differently @

Roland Iten   May 25th, 2009 8:26 pm ET

Jason and Jenny seems like very capable people. Imagine if there was a small business bail out strategy, like there is for BIG business, from which people like Jason and Jenny could borrow, to draw on their business acumen in order to create new, small businesses (think APPLE in the '70s) and in doing so, create new jobs! OMG what a concept!! And imagine again Richard, that as part of your new JobQuest segment, you might even feature some of these small fledgling businesses, to enable millions of viewers to become aware of their services, stimulating demand and therefore, the need for jobs in these industries. THINK about what a Privileged position you hold and what a difference you could make. regards, roland.

Mighty Mole   May 25th, 2009 8:34 pm ET

The right level of financial cushion varies with your own personal financial outlook. How long do you expect it will take you to find a new job? How much do you expect to be paid? And what if one or more personal catastrophes occur in the interim?

Tossing out a number of months is ignoring the larger issues. If you are in an industry which is faltering and you have lots of potential large-scale expenses (a car, a house, or aging body parts), then not even eight months of living expenses is something I'd be comfortable with.

This isn't to say that all one should do is save and never spend on anything. Buying long-term purchases like appliances during a recession when deals are made easier can save you a lot.

In the end, there is no one-size-fits-all solution to your quest, Mr. Quest. Because one man's rainy day can be another's Great Flood.

Simon   May 25th, 2009 9:21 pm ET

I was made redundant 6 days before Christmas last by HP/EDS. I'm 48 years young, my wife and I have a 12 year old son and a mortgage. 12 months ago I would have agreed that 6 months worth of salary / savings for the “rainy day " or the sudden impact of no work , would be enough. In hind sight, I'd suggest that today in the ideal world we find ourselves, 12 months of salary / savings or the equivalent insurance is a must. Of course we don't live in an ideal world, and not the world of my parents where loyalty, maturity and a willingness to work hard and learn new skills seemed to be valued more highly. In New Zealand the country talks of a skill shortage and the need to attract skilled migrants or our own expats back to New Zealand , but there seems to be little or no talk of training the people (young and mature) that we currently have available. I suspect that this is not unique to New Zealand. Everyone wants more skilled workers but everyone wants someone else to train them and pay for it. Instead of governments concentrating on economic crisis summits that seem to go nowhere or subsidizing struggling or in some cases failing business, where is the commitment and investment in training and retraining the current out of work force? The economic pain in the world is happening to families, men, woman and children NOW! The quote from Lao Tzu “Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime” seems appropriate. My glass is half full so I’m looking forward to the next pour from the bottle, but my 2 grape plants in my garden have gone to sleep for the winter.

Doris Roper   May 25th, 2009 10:15 pm ET

I teach people that they should have 8 to 12 months although I personally prefer to have more. My husband was laid off 2 years ago and we had at least 2 years of rainy day cash which gave us such a sense of peace that I encouraged my husband to build his own business in his area of expertise. He has done so and has never been happier. By not feeling desperate due to lack of funds, we came across as confident and thus attracted many new clients. We haven't had to touch our rainy day fund yet.
I must add that I am a financial planner now and used to run my own jewelery business for 19 years. Those were the years where I learned how invaluable a decent rainy day fund is!

haika   May 25th, 2009 10:50 pm ET

i think,, it is safe to have money for at least three months and above. this financial crisis should be a lesson to people that they need to save a least 5% for what they earn every month for uncertainty conditions will happen in the future.

Anna, HK   May 26th, 2009 12:26 am ET

Ideally, I think it's best to save a bit each month, put it away & don't touch this amount (anything up to 30% of the net amount...). The remainder goes towards living costs, entertainment etc. This way you get into a mindset & routine how much money is there for spending each month, & don't go over that amount, plus not consider putting money aside as a hardship. works...!

Peter Vaz   May 26th, 2009 4:02 am ET

Prof Quest! you are now at the correct test and atlast I have won the mother of all battles, not in Iraq but in this QMB. In every blogs I was after these job losses and you have now come to the conclusion with "Job Quest". The GDP or the economy of all nation depends on this issue and will only resolve after every job seeker is given their rights..... I request all the writers in this blog to devote in deep and on sight issues of what is happening in your part of the world....let us pull the legs of all those Prof. Quest's anchors....Maggie, Susan, Adrian and also the weather satellite guys, sparing this time on Job Quest.....

shala   May 26th, 2009 4:45 am ET

anyone who can save 2 or 3 months of salary for safe money doesnt need to worry about the money. Most people now days live hand to mouth if even they can.

Craig Eyles   May 26th, 2009 7:54 am ET

In this day & age, th eonus should not only be on the emplyer to do their bit, but the employee.
The employee should think less about taking the "sickie" & perhaps forget about that vacation. That would accrue itself over time. If worse came to worse, I'm hoping the UK has entitlements much like Australia if you get retrenched.
Also, since when can an employer make you work more hours for less pay?? I'm pretty certain that CNN wouldn't do that to your good self.
But, if they did, hypothetically, would you do it or would you seek union advice??

Ramsi Hashash   May 26th, 2009 10:20 am ET

Having a safety cushion is fine, but that is not what will help those who lost jobs.

People will be amazed how much money they can safe and still live a quality life.

For example plan your daily trip when going shopping well.
Do not take the care three for times a day because you forgot something that will save you a lot.
Sometimes take the public transportation, it does not really take longer to get from A to B.

Scan all the hand outs and leaflets for bargains before going shopping. Do you really need this product or can it be a no name brand. Arrange the daily meal plans according to the bargains in the supermarkets. You have a garden, grow your own veggies.

Do you really need to dry your washing in the dryer? Or simply hang them up in the garage or outside whatever possibilities you have.
Look after your cloth, kids can wear certain cloth twice, they just need to fold them and treat them properly, like this you reduce water and electricity. Turn lights off every time you leave any room. All your electrical equipment do not have them on standby turn them off, computers, TV, recorder, receivers etc. This will reduce allot of your electrical bills.

Doing these things and many more things can cut your expenses by 20 to 40 % depending on each individual situation.

Revisit all your insurances and memberships etc renegotiate or cancel those you do not need. Do not use your credit card, debit card yes, but not credit cards. Pay cash like this you will feel how fast the money is leaving your pocket. This is quite an experience.

Having said all this I realized over the past year that having a 6 month cushion to cover all fixed costs is a must. This is obviously not the same as 6 months salary.

Have agreat one and always remember as long as you are healthy you will prevail. 🙂

Melanie   May 26th, 2009 1:22 pm ET

Traditional wisdom has always been to have three months. That's a nice idea, but for those of us who were already living paycheck to paycheck, there's not much room (if any) to put anything aside, much less save up three extra month's worth. Now, in this economy, I'd say that one should have about 6-8 months saved. Impossible for me, but if people have the means to save, they should! You never know what will happen. I'm currently an unemployed veteran and single mother, on month two of being unemployed and looking for work.

Barbara   May 26th, 2009 6:20 pm ET

I was laid off (made redundant) in July 2007 and was unemployed for a year. I have a job that pays market rate, but is shaky at best. I have about a year's worth of savings in the bank, but I am still might uncomfortable and find myself hoarding all I can. As I approach 50, I also worry that, if/when I do lose this current job, will I suffer age discrimination?

William   May 28th, 2009 4:05 pm ET

I had a contract position that was slated to end in September 2008. Knowing this, I began looking for work in 2006, as I assumed it would be a struggle to secure employment straight away. September 2008 came and I still had not secured employment, though I interviewed at varies places across the US as well as in Ireland. As a doctorate level psychologist with a $1000 per month student loan payment, finding employment was essential. It is now May 2009 and I have yet to find a job. I closed out my retirement fund and have been living off of that, though this will only get me so far. I have tried to work with my student loan company, but they insist on getting their full payment every month. I sold my car, my furniture (I'm sleeping on a mattress on the floor) and many of my clothes to try and have as much cash as possible. When things get really tough, I rely on the kindness of my family and friends, but that just doesn't feel that good. I am hopeful that I will find something and know that it will all work out, but in the meantime, this is becoming a very trying time.

Dwi   June 7th, 2009 1:11 pm ET

We have 1 year worth of saving for the rainy days but still I'm thinking that's not good enough. We both work and have a decent salary. The only reason why we can safe that much within only 3 years of our marriage is that we've been always cost concious if we compare to our friends with similar income than us. They're always seems to have bigger home, flashier cars, exotic vacations and I can't figure out how did they manage that with only 1 person works in the family.

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