A reader contacted me recently asking for tips because her husband recently lost his job. Unfortunately, I have experience with this situation since this month marks 5-years since my husband lost his job. His last full-time job was with a start-up company that was equity funded and in 2008, with the economy coming to a halt, his company wasn’t able to get their last round of financing.
Suddenly finding yourself or your spouse unemployed is never easy and it means it’s time to get creative, roll up your sleeves, and make lemonade. Having less income and more time at home, thanks to unemployment, has a way of making you more creative.
Tips for the newly unemployed
Where to begin?
First, make a list of all of your expenses and see what you can cut out completely or reduce. Use the same methods described in “Budgeting and How to Track Expenses” for the nitty-gritty details on how to track your spending.
For my family, the expenses we cut were meals at restaurants, good wine, and organic vegetable delivery. (Yes, I enjoyed organic produce being delivered to my home but really – I can buy vegetables and fruit myself!) Once you adjust to living without, you’ll find that it’s easy and you’ll cut more. I usually suggest starting slow with cutting back on spending but when it’s a sudden change like unemployment, you’ve got to buckle down and cut quickly.
How do we afford our mortgage while my husband is unemployed?
Since you still have your job, see if you can get your mortgage company to refinance your mortgage for you. Ask them about a longer term loan with a lower interest rate and no additional fees. Explain your situation and that your husband lost his job. Banks and mortgage lenders would rather work with customers than risk having another foreclosure on their hands. Ask to speak to a manager and be polite but firm.
How do I help our kids change their expectations about our lowered income?
Sit down with your kids and tell them in a way that’s easy for them to understand. Explain what’s going on and what it will mean for your family. Kids need to see how parents roll up their sleeves and work together to get through tough times. This is a learning situation. Your kids will learn from you how to work together with a spouse or partner on how to get through tough times. Tough times happen to all of us and you and your husband will be modeling, “This is how we make lemonade out of lemons.” This making of lemonade is an important skill for all of us.
There’s also the benefit of your husband being home. When my husband lost his job in 2008, my kids both enjoyed having their dad around more. He and I both work from home now and we have both found “creative employment opportunities” that have left us with less income but more time together. This “time together” is what we view as our greatest luxury in life.
What does your family do for low-cost entertainment?
Here are a few to get your started. As soon as you see how easy it is to have fun and spend very little, you’ll be amazed!
- Embrace the library :: Because we don’t have paid television or cable TV, cell phones,
or a video game system, (I had to change this because my kids recently purchased a game system for themselves with their own money), we get all of our in-home entertainment from the library. Books, DVDs, music, and even sheet music are available to check out.
- Play games :: Get together with friends and other families for game nights. Play charades or a board game and enjoy a homemade dessert or brownies. Check out “Play According to Hoyle – Hoyle’s Rules of Games” from the library. It has every game you can imagine and rules for how to play.
- Go camping or home swapping :: Whatever you do, don’t pay for hotels while vacationing. You can also go for a hike or a leisurely walk and pack a picnic. Walks and hikes cost nothing and can be so refreshing when focusing on finances! Be a tourist in your own city or town and go explore.
- Cook at home :: My husband and I haven’t been out to dinner by ourselves in a restaurant since he lost his job in 2008 and while at first I thought I would miss fancy dinners out, I don’t at all. We do occasionally go out to lunch, which I now think is more romantic. Added bonus: when our kids were younger and in school, there was no babysitter to pay.
It’s hard to be in this situation when you don’t expect it. Suddenly finding your spouse or yourself unemployed means it’s time to get creative, roll up your sleeves, and make lemonade! Try focusing less on convenience and more on low cost. Work together as a family on your joint goal of lowering your expenses. You may find it brings your family closer. Get kids involved with money saving ideas, too. You may be surprised at what they’re willing to give up – or what they’re willing to figure out how to pay for themselves.
Good luck to you and your family.
Do you have any tips to add to this list? How do you cut expenses quickly?
Go Gingham related links:
Tried and true investing strategies – a question asked by Annie of Plenty Perfect
Just balance that checkbook! You can do it!
Frugal living is the key to saving
How finances figure in frugality
Budgeting and how to track expenses – Part 1
Budgeting and how to track expenses – Part 2
Budgeting and how to track expenses – Part 3