Job losses are painful no matter how old you are; and it doesn't matter how much money you saved for this rainiest of rainy days. Since the downturn of 2008, many people have either lost their jobs or, in the case of new graduates, simply not found a job.
Those that have been fortunate to find work may not be earning what they used to before the job loss or expected to when they began college. Depending on the experience and education of the job seeker, the income change may be permanent. For lower to mid-level workers, finding a job to replace enough of the income to survive is achievable. For example, a branch manager at a bank earning $50,000 a year, may have a hard time finding another bank job as a manager, but there are other $50,000 a year jobs that she may be qualified for.
The rule of thumb has always been that it takes about a month of searching for every $10,000 earned. Thus our branch manager may have to search for five months to find a suitable job. Hopefully she has some money set aside to cover the gap. If not, she may have to take a temporary job to cover a portion of the mortgage and living expenses. Fortunately there are many clerical jobs that pay $15 - $20 per hour which will cover a decent percentage of the lost salary.
But what about executives?
If an executive is earning $100,000 a year, the search could take ten months or longer. For those earning $200,000, the search may take two years or longer. Executives can't accept jobs that pay $15 per hour and there aren't many jobs paying $50 - 100 / hour listed on Monster.com.
We have reported on Laura who was looking for a job. She had two homes, her husband had been a stay at home Dad and last we reported she had been out of work for a year.
"I finally found a great job! But it took me 19 months and we had to relocate out of the country to the Middle East. We still have our two homes stateside, both are still worth less than what we owe and the prospects of selling either is not great. While my income is quite high, by the time you factor in the cost of two mortgages, rent on our apartment here, three heating and cooling bills, taxes and all of the other expenses, we are barely above water each month.
"I have been on the job for six months and I am grateful every day for finding something. But the financial and emotional costs are staggering. We lost most of our savings and all of our equity in our homes.
"I found my job from a referral by a former coworker to the recruiting firm doing the search. They had contacted him about the opportunity and he helped me out. Not long after I accepted the job, he was let go from his job and he has been our of work for over 6 months already."
As our example has shown, he could be searching for quite a while.