Thread: Rainy day fund
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Old 02-14-2012 | 04:08 PM
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LeeMat
SLI best wishes!
 
Joined: Feb 2011
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From: B767 Capt
Default Rainy day fund
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RAINY DAY FUND

Let’s talk for a bit, just pilot to pilot. We would like to discuss saving for a rainy day. We, as pilots, count as one of our tools the capacity to plan for contingencies and have a keen ability to carry out and execute those contingencies. We study procedures, practice them in simulators and even engage other professionals regarding events in their personal history that we can utilize for our own benefit. After all, why should we stumble over the same footfall as someone else if we can learn about it beforehand? The same goes with our financial planning. There may come a time, due to circumstances foreseen or unforeseen, that your regular paycheck stops. What will you do?

We propose you build a safety net, a rainy day fund. How do you do this and how much should it be? First define the target. Look at your paycheck and determine your “take-home pay.” The monthly amount you earn, minus taxes, union dues, social security and insurance. Do not subtract any loan or mortgage payment you have automatically deducted from your paycheck. The idea behind the fund is to be able to pay these bills in the event of a paycheck interruption. So, you have a good idea of how much take-home pay you receive each month. Now double it. That gives you two months’ pay to correct any problem facing you. Now you have a target. So how do you get there?

The first idea would be to use your profit sharing check which arrived today, February 14. It will be a nice enhancement to your fund. Put the money in an interest bearing account. Keep it liquid; easy access should be a requirement. Should the profit sharing check be insufficient to meet your target, there are other sources available to you which we will discuss in future communications.

We as pilots have a responsibility to be prepared for contingencies on the airplane, in our profession and in our personal lives. A rainy day fund is a tool to address many contingencies. The important thing to remember here is discipline.

Start saving for a rainy day.

Chairman
UAL-MEC Strategic Planning and Strike Preparedness Committee (SPSC)

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