Share Payout

A few months back I wrote about $10,000 in shares that my employer would be paying me out as part of the separation of my employment.  This past week, that cheque finally arrived!  The consensus on that post was to keep the cash liquid until things settled down with the sale of our house, new baby, my future job prospects etc.

The decision I had to make was the best way to convert the cheque which was issued in USD to Canadian dollars.  The exchange rate is around 1.35, but most institutions charge some sort of fee.

Here is a breakdown of the rates and fee's as of Thursday last week at some local banks:

I was going to write a post humming and hawing about if I should contact other institutions or just go with Tangerine.  I had spent thirty minutes on the phone just getting these rates - which doesn't sound like a long time, but really felt like it because Little Man was crying and fussing the whole time.

So.

I'm not going to write that post, or ask for that advise.

I decided to just deposit the cheque with Tangerine.  I have to mail it because there are no Scotia ATMs where I live, and you can't use the cheque in feature with USD cheques.  Sometimes, you just have to do what works - and this time, with the level of sleep depravation I'm dealing with, this worked.

EI Salary Top Up

I'm so happy to be writing two such positive posts in a row.  I checked my online paystubs this morning and found that my employer paid employment insurance top up has been approved and processed.

A small bonus here, is that when I did my calculations earlier in the year for planning - I forgot that I had already maxed out my CPP/EI premiums for the year - so the benefit is about $65/pay more than I thought it was going to be for the rest of 2015.  Woohoo!

If you read yesterday's post, you know that as part of my employer paid benefit maternity/parental leave benefit package, once approved for EI, I'm eligible for a top-up.  They 'top-up' my EI benefit to 70% of my pre-leave salary for 15 weeks.  Normally, in exchange for this benefit you have to guarantee that you'll work for them again for a minimum of 6 months after your leave of absence.  In my case, that requirement has been waived because of the termination.

So, 70% of my $78,750 salary is $55,125.   That divided by my employer's standard work week (1950) gives me an hour rate of $28.27.   My EI benefit (pre-tax) is $524 - to find an hourly rate I'll multiply that by 52 weeks and divide by 1950 hours which gives me $13.97/hour.

The difference between the two is $14.30 - so I take that and multiply it by 75 hours (two week pay period) to get my bi-weekly benefit of $1,072.19.  After taxes, we're left with just over $970 every two weeks for 15 weeks.

So yay!   My next project is to update my budget sheets, and work out turning our savings plans back on.

$10,000

Some of you know that the company I used to work for has an employee ownership model.  As part of that, I own shares worth $10,284.30 USD.  If the USD/CAD conversation rates stay about where they are now, the refund should wind up being closer to $13,500 CAD. I should note that it is not an option to maintain my shares if I'm not an employee.

As per my shareholder agreement, the company has up to six months from my departure to sell and issue a refund to me.  I've confirmed that I will receive the money in USD in a cheque.  So, sometime between now and the middle of February we'll get a cheque and need to have a plan for the money.

I've always considered the money invested in shares part of my retirement plan, but now that the funds are being paid back, I'm feeling a bit torn.  Jordan and I chatted about it over the weekend some and he's also a bit conflicted.

Here's the options that we're thinking on:

• Keep the money fluid in my TSFA 
• Pay off the Kia 
• Pay off half off the LOC debt
• Move the money to RRSP

Keeping the money fluid does have it's advantages.  Certainly it would fully fund our emergency fund and then some.  We don't know what type of job I'll find next year, so it might be good to have this as cash to remain flexible.  This also opens us up to spending the money even if we don't really need to.

Paying off the Kia is a super attractive option.  The interest rate is 0%, and as of today we owe just over $15,000 on it - so it would be so so close to being paid off with the share money.  We pay a little more than $250/month on the car and not having that payment would give us a different type of month-to-month flexibility.  That money could be redirected to paying off the LOC - going from $500/month to $750/month, or directed to savings that we've had to pull back on because of going on EI. Putting the money towards this debt has the advantage that it can't be 're-spent' unlike the LOC.

Paying a big chunk on the LOC would make tackling the rest of it feel actually achievable.  Since using it to build the garage and fence on our Alberta house, the balance has gone up and down from $19K to about $25K. Currently it's sitting at $23,500 - so the share money would get this down to a manageable $10,000.  The interest rate on the LOC is 5.73%, so from a financing charge perspective it makes more sense to lower this debt than the Kia as well.  The minimum payment would reduce by about half which would give us equal month-to-month flexibility that paying off the Kia would give us (reducing the required paying by about $250).

Last option would be to just move the money into RRSPs.  This wouldn't impact our cash flexibility in anyway, but would lock in the money to long term savings which was the original intent of it.

So, what do you think?  Keep the money as cash, pay off debt, or move the money to long term retirement savings.  We could really use your thoughts on this one.

Job Loss

I've written about it before, about Employment Insurance, about preparing for the worst - but I've never actually experienced it.

Many of you know that things are pretty rough in Alberta right now, with continued uncertainty around the oil & gas industry combined with mining - many organizations are struggling.  My employer is no different.

I've officially been let go.  It's a pretty strange sort of feeling.  I have known that things weren't great for a while now, but I had been hopeful that I would make it through.  I did in the 2008/2009 recession, and I made it through a variety of restructures, but this time it just wasn't in the cards.

So, here I am, starting my maternity leave a few weeks early, trying to figure out what to do with myself until baby arrives sometime next month.  I've been pretty busy my first week with setting in to our place in BC, and generally getting ready for baby - but I imagine as the days go by I'll start to get a bit bored.

We'll be alright financially, my employer has treated my really fairly and my maternity leave benefits won't be interrupted.  I've got a decent severance package which will, when combined with my Mat Leave, will take me into early 2017 as it doesn't start until mat leave ends.

I'm hoping to get writing a bit more frequently again, though I'm not sure how interested folks are in reading about baby stuff, but we'll see how it goes.

Joint Emergency Fund Goal

Now that Jordan and I joining our financial selves, we will have to look at some of our goals jointly.  The first goal we looked at was our emergency fund.  It currently has just over $500.  Here is a picture of what jordan and I need to survive each month.

We have set our goal at two months essential expenses.  This is because it is so so so unlikely that we would both lose our jobs at the exact same time, given that we are in very different industries.  We also have other goals in mind right now, like saving to buy a house.  Once we have $5,000 set aside - we can look at this again.

Unemployment Insurance - Would I qualify?

Regarding the ‘fear’ of unemployment post the other day – I decided one way to combat that, is to know what would happen should I lose my job. If I already have a plan, a budget, and know what’s going to happen – then I will be more prepared and more calm.

I didn’t realize when I started writing that this post was so long.

So to be eligible for regular benefits (EI) I must show that:

• you have been without work and without pay for at least 7 consecutive days
• in the last 52 weeks or since your last claim ( called the qualifying period), you have worked for the required number of insurable hours

Okay, so what is the required number of insurable hours. Apparently, in Canada, this depends on what ‘economic region’ I am in.

When you show that you have at least 490 hours related to employment in the labour force during the labour force attachment period (the year prior to the qualifying period) you will need between 420 and 700 insurable hours (depending on my economic region – see below) to qualify for regular benefits. Otherwise, you will need a minimum of 910 hours to qualify regular benefits.

The Required number of hours for my region if I have worked at least 490 hours related to employment during the labour force attachment period is 665 hours.

Now, thankfully, in my case, I have worked full time for the last 52 weeks – which means I have about 1900 of employment hours. If I were to lose my job at this point – I wouldn’t have to worry about the labour force attachment period. That said; I would probably meet the minimum hours requirement of the labour force attachment period – although I was a student so it could be sketchy.

Okay – so I’ve learned that If I lose my job, I need to be unemployed and without pay for 7 consecutive days, and I know that I have worked enough hours to qualify for EI.

Next thing I learned was that:

• You must serve a 2-week unpaid waiting period before your EI benefits begin to be paid. Generally, this period is the first 2 weeks of your claim. This is like a deductible for any kind of insurance.


• If you have provided all the required information and if you can be paid EI benefits, your payment will be issued usually within 28 days from the date of filing your claim. If you cannot be paid, we will notify you of the decision made on your claim.

What that means is that you have to wait about a month to SEE ANY MONEY, and it will only be about two weeks worth of pay as you lose the first two weeks in the unpaid waiting period.

Okay.

So I would have to have one month’s expenses (at a minimum) to hold me over. Which I do! That’s great ($1000 in my E-fund currently).

But how much money would I get and for how long? Well you can receive EI in my economic region for 20 to 43 weeks!

They have a weekly benefit rate, which have a lot of different rules if you are low income or have children. For me the following would apply:

The basic benefit rate is 55% of your average GROSS insured earnings up to a yearly maximum insurable amount of $42,300. This means you can receive a maximum payment of $447 per week. Your EI payment is a taxable income, meaning federal and provincial or territorial, if it applies, taxes will be deducted.

This is how the payout is calculated *Note they always use the gross amounts*

1. We look at the total earnings you have been paid in the last 26 weeks ending with your last day of work.


2. We take into consideration the number of weeks in which you have worked in the last 26 weeks.


3. We determine the unemployment rate in your region and the minimum divisor that applies at that unemployment rate.


4. We determine your average weekly insured earnings by dividing your total earnings in the last 26 weeks by the greater of: a) the number of weeks you have worked in the last 26 weeks; orb) the minimum divisor number.Important: The divisor cannot be less than 14 or greater than 26.


5. We then multiply the result by 55% to obtain your weekly benefit.

Using my after tax income this is my calculation:

1. Total GROSS earnings in last 26 weeks = $22,500
2. Number of weeks worked in the last 26 weeks = 26
3. Current minimum divisor that applies (see above image of a spreadsheet) = 21
4. Determine average weekly insured earnings
a. $22,500/26 = $865.38
5. $865.38 X 55% = $475.96

So on the surface, my weekly benefit would be $475.96 However, I’ve already said that there is a maximum benefit of $447/week. So that’s what I would have to budget with.

Weekly Benefit = $447 (less taxes)

Which according to an online calculator would be about $380 after tax/week.

Do you know if you would qualify for EI Benefits, how much would you get?

Note:
I got most of this information from the Service Canada website.

Job Security

It's kind of strange. I haven't been worried about my job in the last month and a half. Not since two more people left my group and I was given their jobs. I have been far too busy to think about job security.

Unfortunately there were two more lay offs from my Division (not the same as my group), and there have been a few corporate services - type lay offs from the national groups over the last two days. They havn't touched us yet (since April 1st, 2009), and people here seem to be fairly confident that they won't do lay offs from our group again.

But still.

It plagues me today - I wonder who they would let go if they have to let someone from our group go again.

I am still the lowest on the proverbial totem pole, but I have been since day one and four people who were more senior were let go.

There's nothing you can really do about it, and worry doesn't help anything. I just thought I would pass along my thoughts today.

Coping with Job Loss

This morning I read on stacking pennies blog that she is worreed about job loss:

http://stackingpennies.wordpress.com/2009/04/17/tell-me-something-good/

... and I read on Get Rich Slowly about someone who has lost their job:

http://www.getrichslowly.org/blog/2009/04/17/ask-the-readers-help-ive-been-laid-off/

A LOT of people are worried about right now, including myself. My company has been slowly downsizing and making business decisiosn where, unfortunatly, appropriate. It is a very hard decision to let people go - and the impact is huge!

I thought I would pass along some information on Coping with Job Loss that I got from work...

Coping With Job Loss

If you have lost your job as a result of downsizing or other reasons, you may find yourself feeling:
- Overwhelmed
- Confused
- Worried

This is a normal reaction to a potentially devastating situation. Losing a job is one of the five most stressful life events. The result can mean that you experience:

- Loss of self-confidence
- A shaken sense of security
- Reduction in your usual ability to cope
- Financial worries

It is important to be aware of the emotional impact that the critical change will have on you in the short term. If you’ve ever grieved the loss of a loved one then you will know that a grieving process is a natural and healthy response to a critical change. The following reviews the process:

After a loss you are likely to experience:
· Shock and denial

You may wonder if your own performance contributed to the job termination. This is a natural reaction since your mind is trying to make sense of what just happened. In this phase, you may shut down, self blame, feel embarrassed and lack motivation to take control of your situation

· Anger, confusion, sadness and fear
You will experience most of these feelings. Sometimes all at the same time. It is important to allow yourself time to experience these emotions. To keep yourself safe and make sure that you are not isolated share your feelings with a trusted family member or friend. Release anxiety through adequate rest, nutrition, exercise and relaxation. Take extra special care of yourself.

· Acceptance
This comes with time and always at your own speed. There is no right or wrong time to reach this place. Once you are here you are truly ready to start planning for the future.

Remember, there is no set time frame and no right or wrong way to experience loss. It is an individual process for all of us.

Remember, it is important to understand that your reactions are normal so be kind to yourself as you evolve through the changes.

If job termination is not effective until a specific date, take care of yourself:
- Work regular hours and preserve time for friends and family
- Take breaks away from the office/company at lunchtime and during scheduled breaks
- Avoid colleagues who complain and are locked into resentment about their situation yourself with a supportive circle that will motivate you to build confidence and stay positive
- Financially prepare for the change
- Get your resume in order
- Network and begin to look at your options

The loss of a job can feel like the end of the world. It is a big change but it is also an opportunity to find a new direction and take on new challenges. Six months from now you could be in school, or in a new job learning new things and meeting new people.

It is always true that change is the place that we find the most opportunity. We hardly ever find opportunity in the routines of our normal everyday life. Change is hard but it is also good.

Here are some tips that can help you to move ahead positively:

- Maintain a sense of professionalism
- Don’t be a victim
- Allow yourself time to grieve and when you’re ready begin the process of looking at your options
- Focus on the future which is in your control not on the past which isn’t

Review your finances
- Determine your net worth
- Refinance if you need to
- Talk to your creditors and let them know of your circumstances
- Adjust your lifestyle according to the financial change
- Speak to a financial consultant if necessary

Apply for Employment Insurance

Go to your local Human Resources Development Canada office. You have a maximum of four weeks from your final day at work to submit your application.

Check the website @ www.hrdc-drhc.gc.ca/ae-ei/.

Seek emotional support
- Reach out for support
- Contact your Employee Assistance Program for additional support if your company has one

Job Hunting
- Update your resume regularly, adding new skills and completed projects as well as courses taken
- Actively network - this should be done even while you are in the process of being downsized
- Explore all options
- A contract position can be a temporary means for paying the bills while you continue your search for a job that you want
- If you are in a position to do so, you may want to consider upgrading your skills or taking courses that might lead to a different type of work

Maintain a balanced lifestyle
· Get adequate rest (at least 8 hours),
· Proper nutrition (protein, fruits, vegetables, grains, dairy)
· Good hydration (at least 6-8 glasses of water a day)
· Exercise (i.e. walks, swimming, yoga) and leisure (i.e. hobbies, interests)
· Strengthen family and social ties
· Keep lines of communication open with your spouse or partner. Problem solve together around the job loss
· Remember, looking for a job is a full time job 3-4 hours a day is what you need

Lay Off Advise

Good Morning!!

Alright, so last night I was reading up advise on how to prepare for a lay off. First thing you need to do, is brush of that resume, get networking and job hunting. Even if all you do is find a part time job to bulk up your emergency fund. I wrote to Gail Vaz Oxlade and this is what she had to say:

"Jessie, the line of credit is BAD advice. Let's say you decide to take out a $20,000 line of credit. You lose your job, exhaust your emergency fund and savings, and tap the line. Your bare-bones budget is $2,000 a month. You're out of work for five months. When you finally get a job, you're relieved, only to find you're now $10,000 in debt!
If you think there may be the likelihood that you'll lose your job (which, by the way, there ALWAYS is), then you should brush off your resume, and start looking at what other opportunities may exist. You might look at ways to work part-time to supplement your full-time income and build up your emergency fund faster. Or you might look at skills or talents you have that you can turn into a small biz... every penny counts.
Good luck. This is a tough time for lots of folks, and I suspect it'll get tougher before it gets better. g"

Fears of Being Laid Off

Okay - so more and more people at work are starting to getting laid off, particularly from my division and i'm startnig to get worried if/when they'll look at me. It just came down to two of us (me and a girl i work with all the time) and she was laid off on Friday.

This is something I really don't know how to prepare for, other then saving saving saving - but really, in my budget, I'm not sure how much room I have for saving any more.

Jordan and I did just get Job Protection/Lay off Insurance for the $4000 loan we got for his truck, but that would only protect is for about $220/month - what about evvverything else. Defnination a big worry.

If I learn or read anything about protecting or preparing for this - i will post.

Jess