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Everyone's Talking About Layoffs This Year. How Big Does My Emergency Fund Actually Need to Be? · Becoming Financially Confident

• 0:37
  More than half of employed Americans say they're worried about losing their jobs this year, and layoff announcements keep showing up in the news, and a lot of them mention the word AI.
• 0:48
  If your job were affected tomorrow, would your savings actually carry you through or would panic set in immediately?
• 0:55
  And I'm going to tell you right now, this isn't hypothetical.
• 0:57
  This year, companies across sectors are actively restructuring and reducing their workforces.
• 1:04
  But there's a real number that would replace that vague dread with an actual plan.
• 1:08
  And I'm going to show you how to get to that number.
• 1:10
  So stay with me today and let's find that real number for you.
• 1:23
  Hello and welcome to Financially Confident Christian.
• 1:26
  I'm Ralph Estep Jr.
• 1:27
  And I just want to thank you for joining me today.
• 1:30
  If you watch the news, you hear about this all the time.
• 1:34
  So today we're going to talk about building a real emergency fund number.
• 1:38
  In a year full of layoff headlines, I got a listener question that really pushes this.
• 1:43
  They're basically asking me, how much do I actually need?
• 1:46
  Am I saving too little or am I saving too much?
• 1:49
  And does the job market change the math?
• 1:52
  Because we're all hearing about these constant layoffs in the news and this low hum of am I next?
• 1:59
  Is in so many people's minds.
• 2:01
  But let's build a plan underneath of that so we don't have to worry about it anymore.
• 2:05
  If you've got a question for this show, I would love to hear it.
• 2:08
  You can go to financiallyconfidentchristian.com/question We'll put a link right in the show notes, but again, that's financiallyconfidentchristian.com/question Let's get right to today's listener question.
• 2:22
  Listener equates the this My company announced last month that they're restructuring parts of our department, and there's a lot of talk about automating some of the work I do.
• 2:31
  Now, nobody said my job specifically is at risk, but the mood in the office has been tense for weeks, and I honestly can't stop wondering if I'm next.
• 2:41
  I do have some savings, a few thousand dollars, but I've never actually sat down and figured out if that would really carry me through a job search.
• 2:50
  With everything I'm hearing about how slow hiring is right now, I don't know if a few months would even be enough to help me find something new.
• 2:57
  I've always heard you should have an emergency fund, but I never took it seriously enough to calculate a real number, given how uncertain things feel this year.
• 3:06
  Ralph, how Do I figure out what I actually need?
• 3:10
  Thank you.
• 3:11
  Thank you for sending in that question.
• 3:13
  What a great question.
• 3:14
  This year's job market makes a real calculated number more urgent than some vague saving sum habit that we were able to get by in the past.
• 3:24
  So today I'm going to help you build an actual number step by step.
• 3:28
  Well, let's get right to it.
• 3:29
  We got to start with a starter emergency fund.
• 3:32
  If you don't already have one.
• 3:34
  This isn't the time to wait until you're able to fund something.
• 3:37
  Three to six months.
• 3:38
  I talk about this on the show all the time.
• 3:40
  It probably drives you crazy.
• 3:42
  But that first thousand dollars, that first $500 is going to help cover those everyday surprises while that bigger fund builds those small beginnings build real confidence.
• 3:54
  And I'm going to tell you right now that's not the finish line, but it's the floor.
• 3:58
  So a small emergency fund today is better than that perfect emergency fund that you start someday.
• 4:04
  So start with something, but then you got to go and calculate your actual monthly expenses.
• 4:10
  Now I'm going to tell you to focus on necessities only.
• 4:14
  Things like housing, utilities, groceries, transportation costs, insurance, and those minimum debt payments, those are the necessities that have to be paid.
• 4:25
  Unfortunately, this may be a season where you've got to leave out those lifestyle extras.
• 4:30
  Eating out, traveling, vacations.
• 4:33
  Those things may need to get kicked to the side for a little bit.
• 4:36
  But that essentials number becomes the foundation for everything else that we're going to talk about today.
• 4:42
  You've got to know that real number instead of just guessing what this rough estimate would be.
• 4:48
  You don't insure your lifestyle.
• 4:50
  You insure your essentials.
• 4:51
  And that's why I started with those essentials.
• 4:54
  So once you figure out what your essential costs are going to be, then you've got to factor in how long that job search might actually take.
• 5:02
  Right now, job market data this year shows hiring has slowed noticeably, and that's even noticeably compared to recent years.
• 5:10
  Many job seekers are reporting searches taken more than past years have taken.
• 5:16
  Most estimates point to four or more months to find that job.
• 5:21
  Now, that's a role that's generally at risk for automation.
• 5:24
  If you're in one of those roles, you may plan on having a longer search because your jobs are being eliminated by this automation.
• 5:33
  That's not living in fear, that's just living in reality.
• 5:37
  It's matching the fund to the real conditions on the ground right now.
• 5:41
  So match that fund the amount of time you're going to need to this year's job market, not the market from five years ago the last time you might have looked at this.
• 5:50
  But then you got to also think about this.
• 5:52
  You can stretch the target if your income or role feels less secure.
• 5:57
  If you're in one of those jobs that's stable, there's not a lot of risk that your job is going to get taken away from AI then I think three months of essential expenses is a reasonable target.
• 6:09
  That's a fair number.
• 6:10
  That's one I've talked about on this show before.
• 6:12
  Three months in a job that isn't subject to those tough times, finding it.
• 6:17
  Now, if you're in a job that's affected by restructuring or affected by automation or those industry wide cuts, you're going to have to push that and you're not going to like this answer.
• 6:27
  Six to nine months.
• 6:30
  The less certain the job field right now, the more that fund matters.
• 6:34
  And this is a moving target.
• 6:36
  Unfortunately, it, it's got to reflect your actual situation, not some generic rule.
• 6:41
  It's not fair for me to say, well, have three months or four months or five or even six months.
• 6:46
  It depends on the uncertainty in your job.
• 6:49
  The more uncertainty you have, the more savings you're going to need.
• 6:53
  Because it's a simple math equation, the longer it's going to take for you to find a job.
• 6:59
  But now I want to give one caveat to this.
• 7:02
  You got to remember what this fund is actually for.
• 7:05
  This is for job loss, medical emergencies, home or car repairs.
• 7:11
  This isn't the vacation fund.
• 7:14
  This isn't your holiday shopping fund.
• 7:17
  Not some comfortable cushion for regular spending.
• 7:19
  Like I said, if you lose your job, this fund is built to help you get through that without guilt.
• 7:26
  This is the thing you refill and return to once you're back in stabilization mode again.
• 7:31
  An emergency fund isn't spending money.
• 7:34
  A lot of people don't think about that.
• 7:35
  It's if you lose your job, if you get downsized, you've got to live on those essentials, not on what you'd like to have with your life.
• 7:42
  I'm sorry, but that's just the reality.
• 7:44
  This is peace of mind money.
• 7:47
  Now I want to go a little deeper here because there's a specific kind of exhaustion that comes from sitting in a tense office.
• 7:54
  You said it in your, in your email to me and you're hearing words like restructuring and automation and you're sitting there in your cubicle or in your office and you're wondering, am I going to be next?
• 8:05
  That low hum of dread is real And I get it.
• 8:09
  And it doesn't mean you're overreacting.
• 8:11
  It means that that's the season you're genuinely in.
• 8:14
  It's an uncertain season.
• 8:17
  And what faith does promise us is that preparation and trust have always worked together.
• 8:23
  And when you take the time to calculate a real number, that's an act of wisdom.
• 8:27
  It's not an act of living in fear.
• 8:30
  Now, I wish I could tell you that faith promises that your job was safe or that restructuring won't touch you, or that you're going to somehow get rid of that anxious feeling just because you pray about it.
• 8:41
  It's not going to work like that, unfortunately.
• 8:43
  Look at Proverbs, chapter 6, verses 6 to 8 says, Take a lesson from the ant, you lazy bones.
• 8:49
  Now that's a little harsh, but learn from their ways and become wise.
• 8:54
  Though they have no prince or governor or ruler to make them work, they labor hard all summer gathering food for the winter.
• 9:02
  And I just love this verse, because if you think about the ants, the ants prepared before they need arrived.
• 9:09
  They didn't try to figure out afterwards.
• 9:12
  So building your fund right now while you still have a paycheck, while you're still working, is exactly the kind of preparation that this Bible verse is talking about.
• 9:21
  This isn't living in some assumption that the worst is going to happen.
• 9:25
  It's about being ready regardless of what happens.
• 9:27
  And hey, if you don't get downsized, that's fantastic.
• 9:32
  Preparing for tomorrow doesn't mean you're doubting God.
• 9:35
  It means you're faithfully stewarding what he's already provided for you today.
• 9:40
  Calculating that real number is going to replace that vague dread that I heard in your email with an actual plan.
• 9:46
  And every dollar you save right now, every single dollar, is going to buy you peace during what could become a genuinely uncertain season.
• 9:56
  That's not panicking.
• 9:57
  That's preparing.
• 9:58
  And those are two very different things.
• 10:00
  So here's your win for today.
• 10:02
  And all of us can do this, regardless of your job situation.
• 10:06
  Calculate your essential monthly expenses this week.
• 10:10
  Those are the necessities.
• 10:11
  Total that amount, multiply by three, then stretch to six.
• 10:15
  If your role feels generally at risk right now, that's what I'm talking about.
• 10:19
  Depending upon your role, what does that number need to be?
• 10:22
  If you've got a very secure job, you've got a job, would be easy to go find someone else.
• 10:27
  You can probably get by at three.
• 10:29
  But if you've got a job that technology is outsourcing, that AI is replacing, you might be six, nine, Even a year from now.
• 10:36
  I'm talking to people every day who have found themselves looking for jobs for years because their job has been changed.
• 10:45
  But once you know the real number, it turns that background anxiety into concrete, achievable goals.
• 10:51
  Well, let's get right to our Bible verse.
• 10:52
  We've already talked about it, but we're going to go back and visit it.
• 10:55
  It's Proverbs 6 chapter verses 6 to 8.
• 10:58
  It says, Take a lesson from the ants, you lazy bones.
• 11:01
  Learn from their ways and become wise.
• 11:04
  Though they have no prince or governor or ruler to make them work, they labor hard all summer gathering food for the winter.
• 11:12
  Again, the ants prepared for winter before it arrived, not during it.
• 11:16
  Your situation today calls for exactly this kind of preparation while you still have money coming in.
• 11:23
  That wise preparation now is going to turn stability if the season turns difficult.
• 11:28
  How about we pray together right now?
• 11:31
  Heavenly Father, thank you for being our provider through every season of our lives, including the uncertain ones like this.
• 11:37
  Lord, I just ask right now that you would calm the anxious thoughts that come with restructuring and that talk of automation and AI taking away jobs.
• 11:46
  Lord, specifically, help this lady with her discipline to calculate and build her real emergency fund number, provide security for her job, fetch your will, Lord, and provision for her family if changes do come.
• 11:59
  Replace fear with steady, faithful preparation and reminder.
• 12:03
  Remind us all that you remain our ultimate security no matter what happens at work.
• 12:09
  And we ask this in Jesus name.
• 12:12
  Amen.
• 12:13
  Again, a real emergency fund number matters more in a year of layoffs, not less.
• 12:20
  Your fund's got to reflect your actual job security, not some generic rule from some commer market.
• 12:25
  It's not about fear, it's about faithful preparation while you still have a paycheck.
• 12:30
  So here's my takeaways for today.
• 12:32
  Number one thing.
• 12:32
  Start with that starter fund.
• 12:34
  If you don't already have one.
• 12:35
  Get to it today.
• 12:37
  Calculate your essential monthly expenses, those must haves.
• 12:41
  Factor in the year, slower hiring conditions.
• 12:44
  Set that target, stretch it if you need to, and use that fun without guilt if you need it, but then rebuild it afterwards.
• 12:50
  That can give you peace of mind and calm down that anxiety that all of us are fearing right now.
• 12:56
  Now, maybe you've got a question that you'd like me to answer on the show.
• 12:59
  How about you send me a voicemail?
• 13:01
  It's super easy to do it.
• 13:02
  Go to financiallyconfidentchristian.com/voicemail.
• 13:07
  We'll put a link right in the show notes.
• 13:08
  You click on the link, you record it, and then I'll get your message and I'll talk about it on the show again.
• 13:13
  That's financiallyconfidentchristian.com/voicemail.
• 13:18
  Thank you for joining me today.
• 13:19
  I want to encourage you, as I always do, stay financially savvy.
• 13:23
  May God bless you and you have a great day.