On Halloween of last year, my husband came home with the news that he had lost his job. It took five months of intensive searching for him to land the position he currently holds. While he now has a job, he is woefully underemployed, making much less than in his previous position. Needless to say, it has been an extremely trying time financially for my family.
I decided to share this very personal story with everyone for two very important reasons. First, every one of us will experience some sort of devastating financial setback at least once in our lifetime. Secondly, although we lost at least half of our income for five long months, and are now working with less money than in previous years, we have been able to stay in fairly good shape financially. How did we manage it? We received and acted on the tips I’m going to share with you now.
Look for Freebies
We decided to look upon my husband’s new free time as a gift to be enjoyed, and do things we never got around to. But with less income during a financial setback, how can you afford to step out the front door? The truth is, with some research you can probably find some free and fun things to do.
- Area Zoo & Museums. Go online and look for free pass days or deeply discounted days, especially in the off-season.
- Movies in the Park. During the summer months, many communities and cities have free movies in the park.
- Concerts or Festivals. Some of the larger cities feature band and orchestras performing in different venues.
There are other opportunities besides entertainment where free or reduced services could be available. Look in to free help for low income households for tax returns and for cellular phone service.
Reduce Monthly Payments
Reduce monthly payments on any accounts you can to the minimum amount. During a financial setback, when your resources are limited, it is better to keep as much on hand as possible. You may be able to negotiate lower interest rates which can reduce your monthly payment amount. Do everything you can to make all your payments on time to preserve your credit. Once you are on the other side of the financial strain you are experiencing, you can return to paying off debt as quickly as possible.
Cut the Excess
The more of your savings account you can preserve, the better. Avoid dipping into savings unless absolutely necessary. You never know how long a financial setback will endure or what emergencies might arise. Instead, cut back all excesses right away and leave your savings in the bank as long as possible.
- Utilities. Keep your thermostat set at 78. Hang your clothes outside to dry. Take shorter and cooler showers. Every small change you can make in your energy usage can add up in your monthly utility bill.
- Groceries. Look at your grocery budget and find a few items you can live without. Try to reduce your supermarket bill by $20 each week.
- Services. If you have cable TV, get rid of it and go to one of the streaming services – you’ll save a bundle. If you use a lawn care service, do your yard work yourself. Phone other service providers and ask about ways you can reduce your monthly bill.
- Dining Out. Until your financial setback is over, forego dining out. This also includes lunches at work. Do some pre-planning and pack a lunch or take leftovers.
- Clothes. Forget clothes shopping for a period of time. This also includes dry cleaning or laundry services-cut them out and do it yourself.
- Fuel. If you drive to work currently, ask around and find out if there is anyone you can carpool with. If it is available in your area, take advantage of public transportation.
All of these small changes can make a huge difference in your monthly financial outflow. Every area of your budget should be examined for possible trimming. Any expenditure that you can control needs to be cut back, even if by the smallest amount.
Avoid Fear Based Decisions
I know, this seems like an impossible feat. When you are experiencing any type of financial setback and crisis, fear seems like a constant companion. One of the best pieces of advice we ever received was to avoid making a decision based on short-term fear. This type of decision always has unwanted consequences down the road.
Remind yourself that your situation is going to change. If you have an emergency savings fund, leave it in the bank, but let that be a comfort to you when fear begins to rise. If you are without emergency funds, you still have to keep yourself in check and be sure you don’t make long term decisions based on a short term financial setback.
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