You said that using the voice of that clown doll from Saw, right? If not, try again, it is mandatory.
This is a fun game to play, well it is if you like personal finance, and we know you like personal finance, since you are here, right? So let’s play.
So what you do is first of all add up any savings/investments you have, which is quite easy to do since this information is found in your net worth.
Then you have a look at all your monthly expenses/bills. For this game I like to calculate any loan payments as the minimum amount, and I would also remove our daycare expense, also no more aside from fancy restaurant meals (which we don’t have many of anyway.)
Then you imagine that you (and your spouse/partner, if applicable) immediately stop receiving any sort of income, and just live off your existing savings and investments. For simplicity, I don’t bother trying to factor in returns on investments or employment benefits, etc…just straight up how long until we need more money once what we have, or roughly have, runs out. With that being said…lets play!
So my (our) current savings/investments is about 68K
Our monthly expenses for the use of this game I put at $2,400. I got to this figure by using the lowest payments for lines of credit, credit cards, etc and day care is no longer an expense, the only other change I would make to my expenses is no more restaurant or fast food meals and no more buying coffee out, also much less gas needed for cars, and we would also stop RRSP and TFSA contributions. The bulk of the $2,400 comes from my fixed bills like the mortgage payment, and also largely from the monthly grocery bill, the reminder is other fixed expenses like the utility bill, and maybe a sliver of spending money
So we can see that if both my wife and I had no income starting immediately* we would be A-ok for about 28 months. (68K/2.4= 28). I thought it might be a bit longer than that, but it is what it is.
Maybe you think this is a stupid game, and you want to make your own rules. Well go ahead! Either way send a comment my way with your thoughts and results, maybe you could stay afloat longer than The Fake Cheap.
* Yes, I realize this is an extremely unlikely scenario due to severance from our employers and likely payments from Canada’s Employment Insurance program, and also likely increased government child benefit payments, but it’s just a game, remember?