When I was laid off earlier this year, we didn’t panic. Scuba Man made enough money to cover the basics, except for the beach house mortgage, as long as we didn’t spend unnecessarily.
We spent a lot of time talking about finances and how we were going to manage. We cancelled pay channels on FIOS, Scuba Man stopped his game subscriptions, and we cut back on anything we could.
We also paid off three loan balances, two were balances around $1,000 and one was the car note. Although it saved us money in interest and would lower the amount of monthly bills, it would also lower our savings.
Since the interest we paid on the loans was higher than the interest we received from our savings account, it made sense to us. When we sent those payoffs, we felt such a great sense of relief.
We were debt free except for mortgages, for the very first time in our married lives!
We had enough of an emergency fund to get us through 6 months, should my unemployment last that long. After that, we would have to start skipping beach house payments and do a short sale.
I would be devastated if it came to that. Not because of losing the beach house, but because I couldn’t pay back money I had promised to. That went against my core beliefs.
Luckily, I found a job within 2 months, just about the time my severance pay ran out. We are in great financial shape from the decisions we made when I became unemployed. We are saving more per month than ever before.
We have the money now to fix up our Richmond house to put on the market. We have money to work on the beach house. I now think hard about any non-necessary purchases. This not only results in fewer purchases, but also in having less material items.
Although I don’t want to go through it again, getting laid off taught me a good lesson!