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Getting laid off. Let go. Made redundant. Circumstances that no gainfully employed person wants to face—yet, within just a year’s time, my husband and I experienced the sting of job loss twice.
The first time around, my husband worked for a small Canadian company that had recently opened an office in the U.S. Within a year, it was clear that the U.S. branch wasn’t going to make it, and we got “the call.”
Panic set in, however, within two months, he landed a new job. This one was at a start-up, located in our home state, and it paid more. Score! But fast-forward to a year later, and, well … the start-up didn’t start. Back to the drawing board.
The upside of this story is that my husband and I have become pros at maneuvering through life in suboptimal circumstances. I hope that you never lose your job but, if you do, maybe you can benefit from the lessons that we’ve learned.
Did you know that you can negotiate your severance package? No? Neither did I! For us, this meant doubling the original severance offer when it was time to part ways with Job #1. Plus, they added two months of medical coverage.
With Job #2, no severance package was even offered! But we negotiated severance pay, a payout of all commissions due, plus a month of medical coverage. Better.
Next, schedule necessary appointments using any of your remaining medical coverage. We called our allergist, explained the situation, and they squeezed us in before our plan expired. This allowed us to update all of our prescriptions, stocking up with an extra-long, 3-month supply. We also got a free EpiPen pack for our son.
The first thing to do is comb through all of your true expenses. Ask yourself, “What is essential, and where can I cut?”
Then say goodbye to ‘Dining Out’, ‘Gifts’ and ‘Gaming’ categories, entirely (and anything else that isn’t absolutely necessary). If there are funds in these non-essential categories, then move them into your emergency fund.
You can also go through your service providers and, depending on your contracts, request a freeze or cancellation of your account. All of those little subscription payments can add up! Can you freeze your gym or yoga membership, and workout with free videos online or go for a walk outside? Can you cancel your audiobook membership? If you have a website, can you downgrade to freemium services to keep your blog running?
Some things can’t be cut, like an upcoming vacation (we’d purchased non-refundable tickets, so we left our vacation funds in place—depending on your financial health, resources and job prospects, you might make a different decision on this one!).
Now, turn your attention to your immediate obligations. Allocate money only to the necessities for this month, then next month … keep going until you’ve budgeted all of your dollars. The less cash you need to keep your life moving along with a roof over your head and food in the kitchen, the longer you’ll last.
And, don’t forget, part-time jobs can supplement your severance pay while you look for a full-time role in your profession!
We were fortunate enough to have an emergency fund that we regularly contributed to before each job loss. As a (slightly obsessive) budgeter, it was hard—emotionally speaking—to begin transferring funds from that account to keep us afloat.
… but then it hit me. After a few anxious conversations with my husband, I realized that this is exactly what the money was for! Those dollars were assigned the job of handling emergencies. So, what felt like a failure was actually something to be celebrated. Just like you don’t buy an EpiPen and then feel guilty if the circumstance arises that you need it, you don’t have to feel guilty about using your emergency fund when you’re out of work.
And, once things were moving in the right direction, again, we started the process of rebuilding our emergency fund. (I highly recommend setting a goal to keep you on track—you’ll thank yourself when life tosses you a lemon).
Job loss happens, and people will understand if you have to turn down social invitations. Just be honest, “Sorry. No job, no dinner!”
In fact, telling people is a great way to get emotional support and make connections—my husband found his new job when a friend tipped him off about an opening at his company. He called the manager and expressed interest before the job ever even posted!
Perhaps the most important piece of advice I can share from our experience is this: work together. It’s easy to say, but harder to do when you’re crawling through a rough patch. Self-doubt creeps in and chips away at your self-esteem and your partner’s self-esteem. When the going was tough, my husband and I used humor, doing our best to keep laughing as we pushed through. And we did.
If you’re in a pickle—without work or just squeezed tight—consider dropping into a YNAB workshop for some free budget inspiration. Our teachers are real people, and they face real-life money struggles, just like you. The classes are only 20 minutes long, and you can ask our teachers all of your budgeting questions. And, no matter what you’re facing, I guarantee it’ll be easier with a budget!
Remember, budgeting is not restrictive. You won’t be spending less, you’ll be spending right. You can do this! Today. Right now. What do you have to lose? Except all that debt and stress. (Ok, so kind of a lot.)
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