Unfortunately, those of us in Indianapolis have a prime example right in our backyard of why it’s so important to have a properly funded emergency fund in place.
If you haven’t heard already, Celadon, one of the biggest trucking companies in the US which is headquartered in Indianapolis, declared that it was going to file bankruptcy last week and then officially announced that it had immediately shut down operations and will be cutting nearly 4,000 jobs12.
This is extremely unfortunate and abrupt news for all of those people who are going to have to figure out how to replace their incomes just two weeks before Christmas. I’m sure that most of these people never had any idea that this would happen to them and were left in a state of confusion and anger.
Losing their jobs is due to no fault of their own – the actions of a select few ruined things for thousands.
Probably Not Prepared
Even more unfortunate than those people losing their jobs is that the statistics tell us that most of them don’t have cash saved up in an emergency fund to support themselves, which means that they’ll probably end up going into debt to provide for themselves and their families until they can find new jobs.
According to a survey by Bankrate earlier this year, 60% of people can’t pay for a $1,000 emergency from savings and over a third would need to borrow the money3. This is extremely concerning considering that the average balance of credit cards at the end of 2018 was $6,506, according to Experian4. To add on to this, it takes an average of 6 weeks to complete the job search process5.
All of this combines to create a terrible situation that has blindsided many innocent people. Luckily, there’s been a Facebook group created for those Celadon employees who have lost their jobs where other employers have posted job openings.
You Need An Emergency Fund
I’ve found that most people don’t take having an emergency fund seriously enough. Even those who make good incomes and can afford to build up a cash reserve to have an emergency fund in place often don’t do so and don’t understand the importance of having one. It’s so much easier to spend your extra cash on something than it is to let it sit in your savings account.
Losing your job probably seems like something that can’t happen to you, but in reality you never really know. Having an emergency fund is important for so many other reasons than just in case you lose your job. This includes needing to have cash on hand for things like unexpected medical bills, home repairs, or car expenses, among so many other unknowns in life.
What alternatives do you have if you have a need that sneaks up on you and you don’t have the cash to pay for it? Borrow from a family member or friend? Go into debt? Obviously, neither of these are ideal.
Be Thankful and Responsible
As I considered this extremely unfortunate situation and the things that the families of those employees who have abruptly lost their jobs are going through, it reminded me to be Thankful for what I have and that this isn’t something that I personally have to worry about today. It also made me think about how important it is for me to be responsible and make sure that Amanda and I are properly protected for the unexpected by having an emergency fund in place.
1 Trucking giant Celadon preparing to file bankruptcy (IBJ)
2 UPDATE: Celadon ceasing operations, eliminating nearly 4,000 jobs (IBJ)
3 Survey: Most Americans wouldn’t cover a $1K emergency with savings (Bankrate)
