Reply to: Scared to spend hard-earned

[SueEllen]

The issues comes with also deciding when do you start cutting back to make it last longer. If I knew I was going to take a year off now, I'd plan things so that I knew I had plenty to last the year and however long it took to get back to work. If I was benched now, I know I wouldn't start cutting back on day one, because I'm confident I'd find something. After a month, I might vaguely think about it, but I like my standard of living. After three months, I might be a bit more interested in cutting back - but after three months, you know that there is bound to be something along soon. So it's probably about six months before you really start making cuts - at which stage you find a contract, splurge the cash and never think about cutting back again.

Until the next time.

It depends what you spend your money on.

When you are benched you have more time so some of the things you spend money on to help save time you don't need or want to do. For example shopping in a market for fruit and veg/ ethnic store versus a supermarket. (OK I'm watching a food program.)

[jjdarg]

Funnily enough, left last contract in late Oct, got a few bites in Nov, nothing reeled in by Dec, so in December, I made a pretty big review of regular payments for things I don't need, or should be paying less for after a bit of research.

I do this sort of overhaul every time I'm on the bench...And then start splurging like a sailor on payday once the new contract is signed...

[TheFaQQer]

One important thing to consider when working out how much warchest you need is to think about what your outgoings are per month (on average). I had a couple of months off and I was quite surprised how little I spent in that period. I didn't particularly change my lifestyle but the actual cash I needed was much less than I thought it was. It just meant that few months my net wealth didn't go up but actual outgoings was fairly low. I think many people's warchests would actually last a lot lot longer than they realise if they have to.

I gauged my warchest on how many months I had at my current spending/saving rate. The reality can be much cheaper so warchest looks a lot healthier. Certainly relaxed my view on my war chest since then.

The issues comes with also deciding when do you start cutting back to make it last longer. If I knew I was going to take a year off now, I'd plan things so that I knew I had plenty to last the year and however long it took to get back to work. If I was benched now, I know I wouldn't start cutting back on day one, because I'm confident I'd find something. After a month, I might vaguely think about it, but I like my standard of living. After three months, I might be a bit more interested in cutting back - but after three months, you know that there is bound to be something along soon. So it's probably about six months before you really start making cuts - at which stage you find a contract, splurge the cash and never think about cutting back again.

Until the next time.

[DannyF1966]

You only have to look at this thread to see how perilous things can get - 633 applications

Ouch! I really really hope it doesn't come to that

[northernladuk]

One important thing to consider when working out how much warchest you need is to think about what your outgoings are per month (on average). I had a couple of months off and I was quite surprised how little I spent in that period. I didn't particularly change my lifestyle but the actual cash I needed was much less than I thought it was. It just meant that few months my net wealth didn't go up but actual outgoings was fairly low. I think many people's warchests would actually last a lot lot longer than they realise if they have to.

I gauged my warchest on how many months I had at my current spending/saving rate. The reality can be much cheaper so warchest looks a lot healthier. Certainly relaxed my view on my war chest since then.

[suityou01]

Thanks to all who've replied so far. I'm not overly worried about being benched, I'm prepared to work basically anywhere in the north west if I have to, but I read other posts here and start to realise that anything's possible in terms of finding work or not. I've been lucky in that I've had no downtime so far in 21 months of contracting but you should never count your chickens etc etc

I'm the only earner in the household so if the cash starts to run out then the missus will have to go onto chatlines or webcams or something...

Ignorance is bliss eh?

[TheFaQQer]

Thanks to all who've replied so far. I'm not overly worried about being benched, I'm prepared to work basically anywhere in the north west if I have to, but I read other posts here and start to realise that anything's possible in terms of finding work or not.

My really significant was seven months. I was prepared to work anywhere during that time, but I just couldn't get anything. When I did find something, I stopped looking because it was a definite - and it then fell through and I'd wasted six weeks waiting for clearance which never came. By that stage, the warchest was pretty low - in sheer desperation, I applied for a permie role. Interviewed for that and a contract the same day, both offered - contract accepted

Past performance is no indicator of future performance - I was willing to work anywhere by that stage, and had always thought I'd walk into something quickly. You only have to look at this thread to see how perilous things can get - 633 applications

[Platypus]

I have a long(ish) list of expensive shiz that I want but I'm trying to resist.

As for debts, pay off everything you can which has a higher rate of interest than you can earn through savings. That's a no-brainer. If you are benched, it's those debts that will cause you the most worry.

[psychocandy]

$64000 question this one.

Gets even more complicated if you've got current debts. i.e. Do you pay off asap and have no warchest or make sure you've got some fluid funds just in case.
In the past, I've done both. Paid off a bit and saved a bit. Depends how much your paying on debts too - if its 0% CC then not so bad.

In terms of how many months, personal decision I guess. Im happier when I know I can last 6 months.
Having been on the end of a 3 month benching once it does make you think so. And I found money goes quciker than you think.

And not wanting to start this one again - claim JSA when benched. It'll make warchest last a smidge longer. Its hassle but after 3 months on the bench you may rue the £1000 you've just lost out on.

[BlueSharp]

Really is a piece of string question.

I have enough to tide me over for 3-4 months - a lot less then others but have been contracting a smiler length of time (25 months) and bought a house in that time. I have no debt payments other than the mortgage but do have access to credit that would tide me over for a lot longer if needed, plus my wife can also go back to work and end her sabbatical if the tulip did hit the contracting economy. I'm also prepared to travel from London up to Sheffield so that's a sizeable area of opportunity.

Ideally I would like to get one year+ in the bank and focus on plan B for 6 months.

[jmo21]

I always suggest to people to spend their first 2 or 3 years contracting as if they were still earning their last pemie salary. More if possible.

One of the biggest hurdles for contracting newbies is seeing the headline day rate, extrapolating that to a year, and assuming their loaded.

If you already have a mortgage and missus/kids when you start contracting, this hurdle is mitigated somewhat as you are probably less likely to go crazy with the perceived riches of contracting.

[worzelGummidge]

I would say one year. I have twice been off for a year. This is the second time, though I spent most of this year doing other things rather than looking for work.


The contractors at my last place all spent to the max and were reliant on their money coming in each month.
Also none of them had any insurance (for them or the company) and complained when they were moved to another agency who requested that insurance was a requirement of the contract.

[SimonMac]

I have 18 months in my warchest of bare minimum living costs, but also on top of that I have personal funds to keep me going as well in the mean time.

How long have you been contracting should give you and inidication of how long your warchest should be (never think of a warchest in purely financial terms, always time)

EDIT Just seen you have been contracting 21 months, so warchest should be starting to be built up by now, I would expect after two years of gigs you should have 6 months

[barrydidit]

I'm the only earner in the household so if the cash starts to run out then the missus will have to go onto chatlines or webcams or something...

Send me her details and i'll let you know whether that's a viable insurance option.

[DannyF1966]

Thanks to all who've replied so far. I'm not overly worried about being benched, I'm prepared to work basically anywhere in the north west if I have to, but I read other posts here and start to realise that anything's possible in terms of finding work or not. I've been lucky in that I've had no downtime so far in 21 months of contracting but you should never count your chickens etc etc

I'm the only earner in the household so if the cash starts to run out then the missus will have to go onto chatlines or webcams or something...