If I were a Washington employee, I’d cash out of my pension, re-locate to a place FAR away, and hope the retribution doesn’t follow me.
Now, I am NOT saying that Team America will be exacting a well-deserved punishment. It’s just that the sooner people re-establish themselves in another career (NOT related to politics or government), the more likely it is that the upcoming revelations of malfeasance, corruption, and crimes will tar their chances of employment. Or being able to blend into their new neighborhood without being shunned.
At best, MANY people will be losing jobs. If they want to be able to salvage ANYTHING, they need to start NOW.
Sit down with the budget, and slash it to the bone:
- Cut out the extras – and, yes, ALL of these are extras
- Cable, if they still have it
- ALL subscriptions for premium channels
- Eating out – Yes, Starbucks counts, as does home delivery of food/groceries
- Cabs, Uber, car rentals (the rental you should be saving up for is U-Haul)
- While you’re at it, send your newer clothes to a consignment shop, or try selling on one of the online places. Take the money and add it to your ‘getaway fund’. Call it your GF for short.
- Find out how your investments are doing. If they are like most people, they are not making that much money. You may be considerably DOWN from your initial investment. If the funds can be accessed without incurring a penalty (like an IRA or other investment account), SELL and add it to your GF. Trust me, any increases that you might miss from cashing out early are vapor-cash – just as likely to disappear before you can cash in. Don’t forget Enron and other Vapor-Cash investments!
- If you’re renting furniture, cancel the contract. Scrounge Facebook’s Marketplace for cheap replacements (one of the few reasons that justify FB’s existence). Do that AFTER you move. The more you get rid of or sell, the less it costs to move.
- If you’re leasing a car, return it – the ‘Ouch’ from the early cancellation penalty will be more than offset by the continual drain on your monthly expenses. If you are very near the end of the lease, make sure you won’t get hit with an over-mileage penalty – stop driving it if you’re close to your max mileage. You can walk or take a bus if you have to. Or, ask a friend to pick you up.
- If you own, put it on the market. Even if you don’t make a dime from the sale (I’ve done that several times), it’s usually worth it to get out from that obligation that ties you to a single place. You COULD try to fix it up for sale, but that takes both time and money. There are people out there looking for ‘as-is’ homes – we recently sold a home that way, and managed to get ALL our equity out, AND a profit. Government centers tend to be in markets where the prices are still rising. Get rid of the house before a crash happens.
- If you have family or CLOSE friends in a less populated area with a lower cost of living, get the word out that you plan to leave as soon as you can. Ask them to send you info about jobs and housing – you can use it to figure out your new budget.
- Talk to HR and find out what you can take, should you leave shortly. Tell them a family member is ill, and made need you to step in – keep it vague, and emphasize that you’re just exploring your options. If you’ve been with the same employer/retirement plan for long enough, you may be able to cash out BOTH your contributions, and your employers. You usually can stash that in an investment account, and get a loan from it to buy a house in your new location. I wouldn’t do that unless you are able to sell your house in DC first. You CAN rent or live with family for a while – it won’t kill you, and it may provide you with some breathing space to make the transition.
- Don’t cancel your insurances, if you can manage to keep them up – accidents happen.
That’s just a short list.
Why am I repeating myself? Why am I sound a warning NOW?