The sidebar "The Flying Career Needs a Backup," suggests a Plan B option called Plan C.
If you foresee weeks or months in advance that you face a possibility of being furloughed, you should begin immediately to organize your finances. Bills should be consolidated and paid if possible; credit sources should be requested and/or amplified cash should be collected; you may purchase a smaller house, with correspondingly smaller payments.
What you should be doing is preparing for an extended lean period. The minimum furlough period tends to be four to six months long; most are longer: up to five, seven, even 12 years. Financial advisors have stated in numerous publications that every employee - every paycheck-earning worker - should keep at least three months' salary tucked away in a bank account for emergencies. This advice holds true for a pilot and his family.
It takes time to collect such a large amount. Substantial savings are not easily amassed; the savings effort should be started when you land your first job.
This money serves as a cushion to keep the panic away when the paycheck disappears. It should be kept in a high-interest account that allows day-to-day liquidity, possibly a money market account or a checking-with-interest account. Opening a line of credit also may be a good idea. Getting a bank loan prior to the furlough may be wise since there will be little chance of doing so once the furlough begins. Extending credit card limits also is a step to take ahead of time. These cards can allow for the purchase of necessities or be used for cash advances during the furlough.
You also may find that, though furloughed, you retain some employee benefits from your company, at least for a time. Some companies extend pass privileges for their furloughed pilots for two or three months; federal law requires that companies permit you to keep your medical benefits by paying an additional amount; and a few companies have purchased FAPA memberships for their furloughed pilots in order to help them get a new job. Whatever help is offered, you should accept it unhesitatingly.
When notification of the furlough is given, there are additional measures that the clear-thinking pilot can take to slow the approaching financial drain. The first step should be a budgeting session involving the entire family so that everyone understands the reasons behind the coming lean months. Examine the household assets, develop a budget, and cut out anything that is not necessary. You and your family may have to do without new clothes, junk food, cable television, even children's allowances, until jobs and salaries return to normal. Forget about keeping up with the Joneses; you have a more challenging task.
Remember, too, that there are sources of quick cash that may not normally be considered assets. You may be able to borrow money against your life insurance policy. You may be able to collect debts owed to you. You may be able to sell a car, boat, vacation home, or other luxury in order to keep creditors happy. If cash is still scarce, you may be able to work out a special arrangement with your creditors, paying monthly only the amount you can afford.
It is important not to avoid creditors. Fewer than three months of missed payments can cause repossession actions to begin. Most pilots do not let the financial situation get this close to the brink of credit ruination, though, even if they have to serve burgers part time in order to pay the bills.
All of these measures are an attempt to keep body, soul and family together until you can begin drawing regular paychecks again, either from a new employer or from your old airline. You and your creditors must know that your situation is a temporary emergency; the debts will be paid because, one way or another, you will return to the line of work that is "still the best job going," as one furloughed pilot remarked.
