Well, it happened. I can’t say it was a surprise. Sales were down, and my husband was the new man on the totem pole. He lost his job yesterday. At this point we are officially without an income, and we have about one month’s worth of expenses left in our emergency fund before we have to break open our retirement savings.
So how are we handling this? There are several things we’re doing to make our way through this financial mess.
First, we realize that we are on the same team. It won’t do any good for me to blame my husband. And it’s not any good if he blames himself. The situation is what it is, and we need to work together if we hope to get through this without hurting our marriage. We’re off to a good start.
Things to Do When You Lose Your Job
If you ever find yourself or your loved one in this situation, here are some of the things to consider.
Do you qualify for unemployment? Most states have websites that will list the requirements for obtaining unemployment, but it’s still a good idea to call and confirm. If you qualify for unemployment, there is nothing wrong with accepting the benefits. It will make it much easier during those months where you couldn’t find a job.
Also, be aware that if you are currently working as an independent contractor or if you have an income generating side hustle, you might not qualify for unemployment benefits.
If layoffs have been happening for a while, you may know if your company will be offering a severance package. I think many of us would love at least a two week golden parachute, but it just doesn’t happen for most of us. Consider your severance to be an immediate emergency fund until your next job. You don’t touch it unless your utilities might be shut off, there’s nothing in the cupboards, or you might be evicted.
Revisit Your Budget
The second I found out my husband would be unemployed, I looked at my budget. If you’re smart, you already have a plan in place to reduce your expenses. While my husband and I already had an emergency budget, it’s a few months old, and we’ve had several changes. There were certain line items that would automatically go away when my job does, like taxes and parking. Other easy cuts are food and gas. We won’t be dining out, and I won’t be driving to work. Things you might have missed:
- Auto Insurance: Your insurance has a basis in how many miles you drive. If you’re mileage is dropping substantially, call your insurance company and ask them to review your rate.
- Credit Cards/Debt: While you still have verifiable income, call your credit card companies and ask for rate reductions, and look for balance transfers that are less than you’re paying (remembering to include the transfer fee in your calculations).
- Student Loans: If you can, put your student loan into an unemployment deferment. While not optimal, I’d rather be in deferment than default.
- Health Insurance: If your company offers health insurance, they may offer a COBRA, but COBRA is very expensive. If you’re in good health, you probably want to purchase an independent policy instead. You may also be able to get health insurance for your children through a state assistance program. Do your homework. I’ve yet to meet anyone who could afford COBRA when unemployed, but I’ve yet to meet anyone who felt they could afford to be without it.
Start an “Interim Emergency Budget”
My poor husband doesn’t know it, but we’re starting the slash and burn now. We’re going to a cash envelope system. We’re stopping dining out, paying only the minimum payments on credit cards. If we pay only what we have to, we can start squirreling away cash. Even Dave Ramsey, the King of paying off debt, says if you’re facing a major life change (like a baby or known job loss), you put your debt repayment on hold and stock up cash until the crisis has passed.
Start a Side Hustle
Start building a “side hustle.” Creating a part time way to make money is an excellent way to start building additional funds, and it also helps you regain a measure of control in an out-of-control situation. The empowerment alone from knowing you contribute to your own destiny will help carry you through your personal “downturn.” If you’re really lucky, your side hustle can take off, and you won’t need to find another “job.”
Take a Deep Breath
Luckily my husband is very even keeled and reminded me this is not the end of the world. I am also apparently “not allowed to stress out for at least 10 weeks.” Wise advice as stress will not help the situation. It will paralyze you, and could keep you from making the smart decisions that will improve your situation.
A layoff or termination is not the end of the world, and it’s not the end of your life. We no longer live in the days where people retired from the same company they started working for out of high school/college. It can unfortunately be expected that a termination or layoff will occur at least once in your life. Being prepared will soften the blow.
Photo by Daquella manera.