Ooo, the grammar of ‘cutting your spending fast’ is…questionable. By which I mean wrong. Or incorrect. I’m afraid we’re just going to have to go with it. You see, it makes for a snappy headline.
Ok, so the worst has happened. You’ve lost your job, been handed a huge debt or need some serious cash NOW. It can happen – life can be like that sometimes. Nightmare. The good news is, though, it’s unlikely that there isn’t something you can cut out of your budget. Yes, it’ll be hard and may take some time to adjust to, but if you’re in the kind of situation where you need to downsize your spending quickly, you won’t care.
Firstly, what not to do:
We cool. This is a phase. Other jobs are out there. You can’t work miracles. Panicking about your situation isn’t helping. WE COOL.
Don’t get more into debt
This ain’t helping anybody, except for the debt collector. As tempting as it may be, this is not the time to be charging more stuff to your credit card. Stay away from payday loans – they’re loan sharks with flashy websites.
Hide from the situation
Burying your head in the brand new pillow you charged to your credit card won’t help you now. Accept that you’re going through a rough patch and try to ride the wave as gracefully as you can. Or at the very least keep your head above the water.
So what do I do?
Ok so, you’re going to need to be in control of the situation, and to do this, you’ll need all information. When Dave lost his job last year (on Christmas Day. That was nice.) I panicked a little. That achieved bum all. I didn’t really know our outgoings – as long as the money in the joint account exceeded what was going in, who cares? I didn’t know how much we used to skim of the top for things like meals out and impromptu Amazon purchases.
Assess your situation
Basically, what money you have coming vs. bills. My meagre wage could just about cover our living costs, but we had a car loan and three credit card payments to make. Luckily, we received a redundancy pay-out and paid off the loan. The remaining money went into our joint account to cover costs.
In hindsight, we should have paid off more of our debt BUT it’s easy to say that now since Dave found a job two months later, but at the time we didn’t know if he’d ever find employment again. What mattered was that our rent was covered.
That doesn’t really matter, though, we did what we did, and we’ve since paid off one card and are almost done on another. Yesss.
But what if there’s a shortfall?
Yeah, so what if I’m in a one-income family or our income doesn’t cover our living expenses? Weeell, you’re gonna have to make some changes. Don’t worry, YOU GOT THIS.
1. Cut your cable
We didn’t do this. We’re bad, bad people. The thing is, when one of you unemployed and sat at home all day, they’re really going to miss that TV. It’s hard, but money for food, rent and heating is more important. You may also need to cancel Netflix. Sorry
2. Get your bills in check
- We pretty much lived on pasta and sauce through January and February. We didn’t eat meat, which cuts down on costs, although I will admit to having a couple of bottles of wine a week – we drank cheap stuff – and considered that our entertainment. Check out this post for ways to cut down how much you spend on food.
- Put a two minute limit on your showers
- Turn the heating off and put on a jumper. And scarf. And hoodie. And blanket.
- Become a hermit (only temporarily, but I must say, I embraced it whole-heartedly) – your new date night is snuggling up on the sofa (for warmth), watching (network) TV and eating (home-popped) popcorn. Leaving the house is for losers.
3. Educate yourself
I credit this time in my life with kick-starting my interest in personal finance. I’ve always been pretty good with money, but my partner hasn’t and he can accidentally lead me astray. Once I started finding blogs such as Living Well Spending Less and Making Sense of Cents on Pinterest (follow me here), I discovered a voracious appetite for frugal living, which rubbed off on Dave. The one good thing to come out of his unemployment was that he stopped smoking, and his eyes were really opened to what a dent it made in his paycheck. He realised that just because you don’t earn much money, doesn’t mean you can’t build wealth (you just need bucket-loads of patience).
4. Ask nicely
Ring up your insurance provider, creditors, utility suppliers, explain your situation and ask if they can help you. If you get no joy, ring up other insurance providers, lenders and utility suppliers and ask them to make you an offer. At the very least, your electricity supplier might send you some energy saving lightbulbs 😉
I must say, I felt grateful to live in the UK since we don’t need to pay for medical care such as doctor’s appointments, birth control or emergency care (we pay for prescriptions but that’s pretty much it). We also would have been eligible for housing benefits, but we didn’t feel that we needed them.
5. Become lower maintenance
The week after we heard the news, I cancelled my hair appointment. Luckily my friend’s a hairdresser, so she did it in return for me loaning her my sewing machine. Things like manicures and facials (and luxury products) may have to be left behind until your circumstances improve. Sorry.
6. Sell stuff
So, you’re unemployed and are about to spending a lot of time around the house. Find anything you don’t use and sell it. Things like baby clothes and old games consoles get snapped up on eBay. Take photos on your phone in a brightly (naturally) lit place, read some blog posts about eBay and, you never, know, you might have the makings of a new business venture. I’ll link some relevant posts, since I have no eBay experience (I don’t like clutter, so therefore have nothing to sell).
7. The only way is up
Take this time to work out what you really want. Dave spent a lot of his free time volunteering at a dog shelter and discovered that that was his passion. Sure, his current job is even more boring than his last one, but at least now he has a clear goal in sight. You never know, this could be a blessing in disguise.
Dave got a new job, but since he was willing to take ANYTHING (he washed up at the restaurant I work in when we needed him, just for a but of spare cash), but it’s considerably less money, and we only have one day off together (Sundays) whereas we used to have two. However, he’s no longer working nights nd he’s stopped smoking, so overall we’re pretty happy.
Trust me, job loss SUCKS at the time, and we had nearly three months of sleepless nights, but you will get through it. Let’s face it, working through undesirable situations and thriving is what humans do.
YOU GOT THIS
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