Tips for Living on One Income During Unemployment
Take Stock of Money In & Money Out
A few months before we found out about my husband's job, I found a Google doc template for personal monthly budgets. Luckily for us, I'd been using it for about three months before he lost his job, so we had a general understanding of where our money was going. What we didn't know was how low we could go. A few things worked in our favor: he lost his job after my daughter went back to school, and so we weren't in full-time childcare season; thanks to a tornado in March that totaled our car, we owned both our cars outright and we'd already cut cable and dropped long distance on our home phone -- our utilities were about as low as they could go with me working on the Internet for a living.
Without boring you too much, using the spreadsheet really helped me focus on fixed vs. variable expenses. The fixed ones are the ones you have to pay if you want to keep living where you live and driving what you drive and not having a collection agency calling you. These are things like rent/mortgage, car payments, credit card minimums, utilities, health insurance, car/house insurance -- you know, the stuff over which you don't have a ton of control without a massive life upheaval (and in this market, even if we wanted to sell our house, we probably couldn't without taking a loss -- aren't I cheery?). Those get figured in first. Then you look at your take-home and you look at your fixed expenses and you understand what you have left for things like food, clothes, gifts, classes, gasoline, haircuts, investments -- basically everything fun. Then you think about how you could supplement your income -- do you have savings? Do you have investment income? Could you pick up some extra hours at work/mow lawns/babysit/sell stuff/barter/borrow money? Don't put this in your spreadsheet unless you're positive you can get it, but that's the right mindset to be in.
Then you look at the spread and make some tough decisions. We were accustomed to living a middle-class life using two incomes. We live in the Kansas City metro area, which is pretty affordable, especially compared to the coasts. We weren't floating in cash before this happened, but we weren't paycheck-to-paycheck, either. After the lay-off, we were worse than paycheck-to-paycheck, we were operating in the red. And this can happen -- even if you scrimp and save, there might still not be enough. We figured out we had about a $1,000 a month gap between what I brought home and what we needed to exist without frivolities. Fortunately for us, unemployment covered the gap. Some people supplement with credit cards. Some people supplement with savings. Some people borrow money. Without doing this step, without knowing your gap, you have no idea how to stop yourself from spiraling out of control. If you mind the gap, you can make it through.
Change the Way You Eat
Everyone knows it's cheaper to eat at home than to eat out, but guess what: It's mindblowingly cheaper. And what is even cheaper is to buy everything whole and cut it up yourself and cook it. I know, I know, you knew that already. But it is a CRAZY DIFFERENCE. And listen, if you're going to be eating every single meal at home, don't you want it to taste good? Whoever lost their job is now Head Cook. If it's you and you didn't know how to cook before? Guess what! You're going to learn a new skill.
I was couponing before this happened thanks to Denise and her Extreme Couponing series on BlogHer, but I was pretty loosey-goosey about it. The good thing was that I had so much shampoo/conditioner/Swiffer wipes/toothpaste, etc. from couponing that we didn't have to buy any of those things during my husband's unemployment. I wasn't that good at food couponing, though, and that was a big part of our new strategy. We started planning our meals on Sundays according to what was on sale and what we had in our deep freezer. Twice we bought meat in bulk at Costco, but mostly we avoided Costco because we couldn't afford to bulk up on much. Instead it was a lot of whole vegetables, pasta, rice, cheese, milk, that sort of thing, and there are coupons and store brands for pretty much everything but the vegetables. We'd make sure we were using the entire thing of celery, buying just two apples, whatever, so nothing ever went bad. I did the couponing and the meal planning, and then my husband was in charge of chopping/cooking/storing what we were going to eat. I'm actually going to miss those meals when he's back to getting home late and traveling for work, because they were the best meals I've had in years. He had time to experiment and get creative with what we had, and he was a good cook to begin with. We started making a lot more fun stuff, too, like corn muffins and other sides that take some preplanning. And then we ate the leftovers, all of them, always, for lunch until they were gone. We made huge Dutch ovens of soups and chilis and froze whatever was left. We ate eggs for lunch sometimes. We made a lot of cookies. We ate less meat than usual.
Give Your Kids a Budget
The hardest part, for me, was having so little disposable income during the holiday season. I wanted to make the crafts and make the sugar cookies and participate in the gift exchanges and go to the holiday dinners and all the things we normally did, but we just didn't have the money for it. And we didn't have the money for a lot of stuff we usually do with my daughter. I lucked out -- my parents gifted us tickets to the Kansas City Ballet's performance of The Nutcracker. We have a free-will offering light show in Kansas City. I have a huge craft stash that we were able to use. I already had reams of gift wrap and cards and nametags from previous years. We had plenty of holiday decorations and had replaced our artificial tree the year before. But still I wanted to give my girl a little leeway when it came to enjoying Halloween, Thanksgiving and Christmas, so I gave her opportunities to do extra chores for money and paid her immediately in cash. She has always had $2/week in allowance, but you can't buy much with that, so she relished the chance to save up faster and buy herself a holiday Build-a-Bear for $10 after a few weeks of saving. The look on her face on the way out of that store was priceless, and it was a great teaching opportunity, too.
Defer, Don't Dismiss
One of the hardest things about unexpected unemployment is that you're bummed out and pissed off, and you can't even afford the little luxuries in life that take your mind off your woes. Since we had to put all our resources into the holiday situation, there was no way we were going to be able to continue the house projects we'd started or throw the parties we'd talked about, etc. I started making a list of things I would do when my husband got a different job. Whether I do them or not wasn't really the point, the point was daydreaming about tomorrow and reassuring myself this was a temporary situation that would not last forever. Whether you're the unemployed person or the unemployed partner, staying focused on the day you're no longer in this situation is pretty important. The unemployed person needs motivation and the partner needs the strength to be a cheerleader. Remind yourself it's temporary and daydream.
I know I'm not the only one who has been here -- which tips did I miss? Tell me your unemployment tales!