A Friendly Warning from the Grim Reaper

I may have hinted a few times that I know a thing or two about layoffs. This would be true. I do. In fact, if you see me coming, it’s best to start packing up your things right now because it will save us all hassle later on. (This, actually, is not true. Your manager would be terminating you, not me, so feel free to chat with me and share your Christmas candy.)

So, here’s the deal. You may get laid off. Yes, I know, you are a stellar performer and your boss loves you and blah, blah, blah. Humor me. You may get laid off. And here’s the kicker: You will still have bills to pay.

My company offers severance. Yeah! Severance checks come in the mail, not direct deposit. (Yes, I’ve tried to change that. No, payroll wasn’t interested. They said it was a systems thing. I like to get paid, so I said I believed them and now we’re all happy together.)

Two pay days in a row I’ve gotten a tearful phone call from a woman. It seems that the US mail did not deliver her check on the day expected. How could she pay her bills? Her car was going to be repossessed if she did not have that check TODAY.

I can’t control the US post office. (Wouldn’t that be cool if I could, though? That would be some serious super powers if I could do that.) I also can’t guarentee you’ll have a job. I can’t guarantee that your company will give you severance. (I can’t even guarantee that my company will give you severance, largely because you don’t work for my company.)

If a check being one day late will be the death of you financially, you need to get control over your financial life. Nobody should be living this close to the edge. I know now is not the best financial time, but please, think about the very real possibility that your check may be worse than one day late–it may not come at all if your job goes away.

I really feel for the woman who is having post office problems. I do. And that’s why I’m writing this. Please, put aside some money. Stop spending as if you’ll always have tons of cash. If you say, “But I can’t put anything aside!” Stop and think about what you’ll do if you do get laid off. You are better off now then you will be then, so do something to put a little aside. A little can grow into a lot if you just leave it alone and add a little each pay day.

It’ll make it a lot easier on all of us when your manager calls you into his office.

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37 thoughts on “A Friendly Warning from the Grim Reaper

  1. How heartless, redundancy is not a laughing matter for anyone yet you still try to make it into one.

    Shame on you.

  2. “Now” is never the best financial time. Which is why so many struggle with saving for a rainy day.

    Get out of debt and have six to twelve months cash on hand. Dave Ramsey’s books are a great place for some guidance. The “$1000 emergency fund” is the first thing he suggests you do.

  3. Everything is a laughing matter. It’s the only way to preserve your sanity in these interesting times we live in.

    Evil HR Lady is 100% correct — if you have an income you need to be saving like crazy. Take drastic action. My daughter gave up her own apartment and is renting a room in a house in order to live within her means, pay off her credit card debt, and save money.

  4. For the first time in 12 years with my company, I feel vulnerable to pending cuts. Even though the prettier-half has been masterful in ensuring we have some contingency funds, I still have a sense of helplessness and doubt.

    So, in addition to EHRL’s always helpful advise, may I also suggest that we all ensure that we (continue) to make ourselves indispensable to our employers. Walking around with a gloomy look of pending disaster may only bring about a self-fulfiling prophecy.

  5. Without doubt its important to have a nest egg for unforeseen circumstances, but companies have shown themselves to be predatory with their loyal longterm employees by trying to ring the earrings towel for a few extra dollars. Paraphrasing Barry Diller of IAC its a horrible act of a profitable company to have cutbacks to make a few extra bucks.

  6. I can’t see where this post is “heartless.” It’s common sense to save, although I know it’s easier said than done. Layoffs are sometimes an unfortunate side-effect of doing business in this economy. Saving a little here and there is a way to perhaps soften the blow a little bit.

  7. Thank you EHRL! This post is by no means heartless. I’ll remind readers that severance is not legally required during a layoff, and layoffs are unfortunately a fact of life. The fact that this woman’s car was going to be repossessed means that she was several months behind on her payments, and that is no one’s fault but her own.

    When I graduated college, my family pounded into me how important it was to save even $10 dollars per paycheck. When I had to get unexpected work on my car, I appreciated their lesson. Now, I’m able to put more than $10 aside for a rainy day, and while I don’t by a long stretch have a year’s worth of salary saved, I know if I get fired tomorrow, I will be okay at least until unemployment kicks in.

  8. I am currently a Stay at Home Mom, but worked in HR for 5 years previous. I also worked for an auto financing division in the repossession department. You will not have your car repossessed for one payment off, let alone a payment a day or two late. So, this lady is having problems that go far beyond getting her check a day or two late. I agree with you, and I’m sorry if I sound heartless, but you should be financially sound enough that if you get a late check or get laid off, you won’t be losing your car/house, etc within that month. I agree with a previous poster, perhaps she can start listening to Dave Ramsey on the radio for some help?

  9. if folks had heeded this sort of advice over the past year or so, we likely wouldn’t be in the mess we’re in today. Good job!

  10. Dear Evil HR Lady,
    I discovered your informative and humorous blog earlier this year and have become quite a fan. I would like to chime in at this time to say that this post is a much needed one and agree with Anonymous 4:32pm that if more folks saved perhaps the country as a whole would not be finding itself in such financial difficulties…

    I can say as someone who doesn’t make a high figure salary I was able to save a little bit (much of it tax refund/stimulus $) which came in handy for car repairs totalling over $1000 a few months ago – and this is with a car loan and credit card debt that I’m whittling down!

    Your advice, while perhaps difficult to hear at this time of year and in these difficult times, is valuable, in my humble opinion.
    Thanks for the info, the advice and the humour and may it continue into the New Year!

  11. I generally feel the same (If a check being one day late will be the death of you financially, you need to get control over your financial life.)

    At the same time, as a person who grew up in and continues to live a priviledged life, it’s easy for me to say that. I don’t make poverty or below poverty level wages for the size of my household.

  12. I totally agree with the “Here I come to your desk” thing. I’ve had the unfortunate luck of having to lay-off a lot of people over the years. Each time I’ve had the same fight with the finance team about direct deposits! Same result – a big NO from them! Without any logic!

    Employees have literally cried their heart out during our talk – a wedding that got postponed, housing loans that got defaulted, surgery on-hold and the list just goes on. Your last line just summed up my current mood.

    Save for a rainy day!

  13. Engineer–I’m a Dave Ramsey fan myself, but I do keep one credit card. It’s paid off in full each month, but I just can’t make the jump to no credit cards. I don’t want to either.

    And it’s true that one late payment does not result in a car repossession.

    As for direct deposit, one finance person said that when people terminate they often move and close bank accounts and then don’t update the former company with the new account, which is why they do live checks. I don’t buy it.

  14. I’ve worked for 3 companies, and all provided direct deposit for severance payments, so yes, your Finance dept is totally BS’ing you. If someone changes bank accounts and doesn’t care to update payroll on where to send the money, then that should be the ex-employee’s fault.

    I do know of some who really have to live paycheck to paycheck, so I emphathize, but way more do not make the right financial decisions. Suze Orman says you need to have a rainy day fund to cover your monthly expenses for 6 months, in case of layoff or other emergency. I wonder how many Americans actually do.

  15. When we term or lay off someone, we also do live checks, but, we get them beforehand, and they get it as part of the final meeting, unless of course they have company uniforms/equipment/keys they still need to turn in. Then they have to exchange the company equipment for the final check.

  16. Why would her car be repossessed if a check is one day late? Wouldn’t that imply she’s several months behind on payments.

  17. Great advice Evil! I just discovered the website http://spendster.org/ today. It’s pretty funny, yet at the same time tries to help people realize ways we foolishly spend money. Watch some of the videos and discover ways you could be saving money for emergencies or layoffs.

  18. In California, the “we’ll mail the check” thing at termination won’t work.. You have to pay them all monies due within some small time, cash on the barrelhead, check cashable at a local bank with no fee, etc. No hold backs, deposits, etc.

    “An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination.”

    There might be some exception for certain industries, etc.

    There’s some special rules for folks with a contract of determinate length, and in certain layoffs, or if you give at least 72 hours notice. There’s also special rules for autodeposit (autodeposit has to be cancelled immediately upon termination, so you either make that final wage payment and then terminate, or give them a check)

    If you give them a check, they essentially have to be able to walk out the door and cash it at a local bank, instantly.. No holds, no fees, etc.

  19. Many states require you to pay all owed wages on the day of termination (including MA where I work). I thought we were talking about severance payments, which is an entirely different thing. These are payments we pay to laid off employees to help them through the transition. Some companies do pay these out as lump sums, while most companies I’ve worked for choose to pay them through the regular pay cycles. We would not hand these out the day the employee leaves, as assuming we’re getting a release agreement from the employee in exchange for severance, you must wait an XX number of days [depends on age] in case the employee changes his/her mind.

  20. I wish I had gotten this advice 2 years ago. I was laid off from a job as a teacher after 12 years. And yes, you can get laid off even though you have tenure. My pay at my new job, in HR, is half what I was making. And somehow even though my husband and I have had to cut back severely , we are making it. I realized how spoiled my children are and am thankful our 2 youngest are getting a lesson our oldest daughter unfortunately did not. You do what you can to survive!You do not need the cell phones for your 13 year old, etc. From the looks of it times will get even tougher but I know I have learned some valuable lessons. Though your message seems harsh, it is right on!

  21. There is nothing finer when facing a layoff than one year’s take home pay sitting in the bank.

    Don’t want to panic? Don’t want to take any job that comes along?

    One year’s take home pay in old cash, in the bank is the great equalizer.

    Start now.

  22. Of course payroll can direct deposit if they want… but most don’t just for control factor. How many times has my payroll person forgotten to cancel direct deposit and terminated employees continue to get paid? That is so much fun!

    Also, I share your hatred of the US postal service. If I were that individual, and lived literally paycheck to paycheck, I’d ask if I could pick up my sev checks. Even if I didn’t have such an urgent need as your former employee has, I’d still request to pick up the checks.

    But again… another issue beyond our control that becomes HR’s problem. I’m surprised to see you weren’t ordered to have payroll/finance recut the check for her to pick up immediately…

  23. As a single mom with three kids and a deadbeat ex-, saving isn’t a matter of giving up luxuries. I pay my rent, insurance, electric, etc each month…no cable, no vacations, essentially no new clothes for me, not even internet access at home. Your post is nice for those who make extra — cruel and heartless for those who are struggling every month with the basics.

  24. anon–you are exactly the type of person I am talking to. If you are living on the edge now how much worse would it be if you got Laid off? A lot of people are in situations similar to yours. When determing who to terminate companies do not look at your single parent status and say “we won’t terminate shelly, she’s single with three kids. We’ll terminate Bob instead. He’s married and his wife is a vp at Acme.”

    No, they look at who is most valuable to the business. And if you think your status can protect you, you are mistaken.

    I’ve known people that make $30,000 a year who have no debt and savings accounts and I’ve seen people making $200,000 living paycheck to paycheck.

    Check out Dave Ramsey–really. He really can help.

  25. I agree with Evil HR Lady. I worked in HR for four years before staying at home with my kids. That type of phone call was the one that I dreaded getting on any given day. The particular type being where I had to sit on the phone line while the person (employee) on the other end expected for me to perform some kind of Godly event to fix their life problem at that moment for which I had no control over. Sure, because I was professional, I sympothized with them and told them so. But seriously, when I had done all I could do to help, that should have been the end of the telephone conversation(s). Evil, you are not heartless, and I understand exactly where you are coming from.(Humor and all) This person was in financial trouble way before she checked her mail that day. The burden is hers, not HR’s.

  26. Sorry–this post really irritated me.

    I have been a pretty good steward of the household finances, and have a few months’ worth of (net) pay in the bank.

    That said, I’ve been poor (much of my adult life) and I’ve been comfortable (now). For a lot of my life, I was too hard-pressed to pay for necessities to build a cash cushion.

    Sorry, but this post smacks of having been written by someone who’s never had to struggle for a living. Not everyone works part-time, stays home with their kids, and gets to go on posh European trips with their husband.

    Try *really* having to struggle–on your own, without family to help you–and then tell us how Dave Ramsey can help.

  27. Anon 5:00 am, listen to Dave Ramsey before you dismiss him. I saved money as a Peace Corps volunteer. Yes. $650/month stipend and I still saved money.

    I made it through grad school just on work savings from my five years of post-college work. (That money also paid my $12,000 in college loans.) It would shock me to go through the grocery line with my beans and rice and hambone and see the woman in front of me buying steak, individually-packed puddings and applesauce, and soda with food stamps.

    Don’t whine about not having enough money when you are wasting it on processed food. (This might not be you, but it is some people.) Learn to cook. Buy your clothes at Goodwill (jeans are $5/pair). Get books and movies at the library. There are lots of places to cut back.

  28. Class-factotum, right you are. We’re comfortable now, but I still buy all my clothes and my children’s clothes from either the clearance racks or the thrift store.

    My car has 260,000 miles on it, and my husband’s has 130,000. We would drive them until they die, but we’re moving overseas and have to sell.

    The only prepared foods I buy are cold cereals and stuff for offspring #1’s school snack–but that’s because I’m lazy and we can afford it.

    I’m not as dedicated as you are, but I tell you what, I’ve been in debt and I never intend to do that again, if I can at all help it.

  29. Even if you honest to G-d have no way of saving even a penny a month there is no reason to be offended by this post. Evil HR Lady hasn’t said anything that isn’t true. You are going to be SOL if you get fired or laid off and don’t have any savings. The fact that you couldn’t save any money won’t change that.

    If the advice doesn’t apply to you, fine. But that doesn’t make it bad advice. Anyone that can save should do so and anyone that thinks they can’t should make sure they can’t cut back somewhere before giving up.

  30. I had to comment, even though this is an older post.

    Love your words and your dry sarcasm.

    I know from my experience as an HR Professional…sometimes you need to laugh or else you will cry! There is nothing in between.

    Thanks for your humor. It made me laugh out loud.

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  32. I know that we all need to do our job, and if we have to have part of the staff laid off, we just have toughen up and do it. Yes it changes the employee’s life, but we can’t take the blame for scarce resources or poor home budget planning on ourselves. However, I believe that a thought-through downsizing plan eases the things and if we properly inform employees of the coming downsizing, there’ll probably be less trouble.

  33. In the current economic status is mandatory that you develop several skills that make you indispensable at your job and are highly sought after by different employers. But if you can be special or create unique skills that are in demand, you must stay alert.
    The alert state means that is you are aware that things happen even to the best of us. You can give 200% at your current position and go through targets like butter if the project is not viable you will have the sudden realization that your work will not count when the project shuts down. And that is truly a bummer.
    The greatest advice my dad ever gave me was never try to be rich to acquire more and more belongings, just have the bare minimum that allows you to be free and grants you the liberty to enjoy life. In the current economic status everyone aims for the top, they crave the nicest jewelry or the nicest cars, and crash and burns when their job suddenly disappear. Do you want that? I don’t think so.

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