10 August 2014

Weekend Today and How to Get By When You Fall on Hard Times

This morning I was up at the crack of dawn. Actually I was up well before the crack of dawn as I had to be in at Docklands at the Channel 9 studio for a Weekend Today segment. I left home at 6.35am and it was still dark, but being a Sunday the traffic was light and I had time for a coffee before I checked in.

When I took the call about doing this segment I was so excited. This is something I know about. It's something I've experienced. It's something I've lived through. It's the reason I started the Cheapskates Club.

In the space of 72 hours we went from a two income family of four to a no income family of four with one on the way and half a house, waiting to be renovated, a mortgage to pay plus all the usual living expenses. It was a disaster. Like most people we knew we lived pay to pay. We had credit cards and we used them. We had a mortgage. And we had never heard of anything as sane and sensible as an Emergency Fund.

To say we were stressed is an understatement. It took me six long months to get my act together and realise that we could sink and lose everything we had worked for or we could change our attitude and our habits and get through what I thought would be a temporary hiccup. As it turns out that was one long hiccup - three years in fact. We survived, and from that disaster we grew stronger and much, much wiser and learned some valuable life lessons too.

Losing a job is a very stressful thing. But it's not the end of the world. You can control the way you react to job loss to ensure you come through stronger and happier or losing everything.

Take Stock

Firstly don't panic it is wasted emotion and energy. Take half an hour to sit down and take stock.

Get out your budget and have a look at your bank account and Emergency Fund. Do a pantry, fridge, freezer and garden inventory and make a list of the meals you have in the house. This will tell you how long you can survive without an income and how long you have to find another job.  It may be a month; it may only be a week. Either way you need to know how long your money will last.

Stop Spending

You would think this would be a no-brainer but there are those people who spend in times of emotional crisis, even though they know they shouldn't. You have nothing coming in to replace what you spend, so cut back on everything. Go back to the absolute bare essentials. No new clothes, toys, plants, books, eating out or takeaway, limit trips in the car to reserve petrol. If you do need to buy something look for the least expensive way: can it be bought second-hand? Could you get it free from Freecycle? Do you already have something that will do the same job? Will you find it at a garage sale or op shop?

Be ruthless with your grocery shopping.  When we lost our jobs the groceries were the first thing to be cut back. Cleaning supplies were the first to go, replaced with a bottle of generic white vinegar, a box of bicarb soda and some elbow grease. Then the processed foods went: biscuits and cakes, snack foods, cereals (except for Weetbix and rolled oats), most tinned foods.

Brand names became a thing of distant memory. Generic labels became my best friends. If you have a favourite brand product and it has a cheaper alternative you are just going to have to suck it up and buy the cheaper alternative. You can't afford brand names. It's not forever, just until you get back on your feet.

If you're not working you'll have more time to cook from scratch. Buying basic ingredients costs a fraction of the price of the ready-made foods so you can still enjoy your biscuits and cakes, muesli bars, snack foods and drinks. The difference, apart from the cost, will be that you made them rather than bought them. There are over 1,400 recipes in the Cheapskates Recipe File, all of them good. There is even a $2 Dinner category and of course the Bare Bones Groceries meal plan and shopping lists are on the Printables page.

Go back to tracking your spending. It's all the little things you buy that do the most damage. By recording every cent you spend, on the newspaper, that can of soft drink, the groceries, the phone bill, the power bill, petrol and so on you'll see where the money is going and the areas that can be trimmed.

Switch to a Cash Only Budget

If you haven't already, stop using those credit cards. If you don't have the money to buy something, what makes you think you will have the money to pay for it when the credit card bill comes in? Now is not the time to be getting deeper into debt.

Get on the Phone

If you are going to be out of work for longer than two weeks, get on the phone and let your creditors know. Contact the credit card company, your mortgage lender and any other creditors and explain the situation to them. Let them know you want to continue to make payments and ask if they can be reduced for a limited time. Most creditors are sympathetic and understanding if you contact them immediately, before your accounts fall into arrears.

Make Finding a Job Your Job

Spend time every day actively looking for work. Register with agencies, look through the papers, and look online.  Be brave and look at jobs that are new to you.  Paper qualifications are good, but experience is valuable too.  Don't think that you can't do a job because you don't have the paper that says you can. Of course there are exceptions to this, but for the most part experience and common sense are worth more than the degree.

Get your resume up to date and have it ready to email with job applications. Get copies printed ready to take with you to interviews too.  Answer your phone professionally when it rings, it may be your future employer. Don't let your personal grooming slide.  This is your job until you find a new one.

Keep Busy

Depression will set in very quickly if you do nothing. Don't sit in front of the TV or computer all day. Get up each morning with a list of things to do. Look for work, weed the garden, paint the fence, fix the dripping tap, and clean the car, bake bread, volunteer at a local charity. Do not sit, idle all day, thinking about "poor me".  It won't get you anywhere.

Take Work that is Offered to You

Now is not the time to be proud. If you are unemployed, you don't have an income.  When someone offers you work, either temporary or permanent, take it.  You need the money and the job. Look for part-time work - deliver pizzas, mow lawns, take in ironing. They may not be your dream jobs but they aren't forever. They are just to keep cash coming in. Wayne did all manner of things while he was looking for full-time work. He fenced paddocks, picked pumpkins and tomatoes, would get up at 3am to go out to a feedlot and put out the feed, ploughed paddocks and did odd jobs all over the district to earn some money. None of those things was even close to his trade, he did them because he had to have a job.  Don't think that any job is beneath you. Work is work.

Look at the Long Term Picture

If you believe it is going to take more than a couple of weeks to find work (it took us over three years to find permanent, full-time work) you may need to think seriously about your lifestyle. Having money to pay the bills, put food on the table and keep a roof over your family's head are the top priorities. If you can't find any work you may need to sell some possession, downsize your home or car (or both), move to a less expensive area or change the children's schools.  You may even need to move interstate, as we did.

And Lastly Build an Emergency Fund

As soon as you have an income start socking some of it away in an Emergency Fund. Years ago I would have said three months’ worth of living expenses was plenty. These days I suggest you aim for at least 12 months’ worth of living expenses. You won't be able to save that much straight away. Work at it every week. Start with just $10 if that is what you have and in a year you'll have $520. Add to it with bonuses, tax refunds, birthday money, money from garage sales - any extra cash that comes your way. An emergency fund gives you security and relieves the stress a financial hiccup, be it a week, a month or three years long, can cause.

Although when it happens it seems like it is, financial hardship isn't the end of the world. When disaster struck us, I thought it would be the end of our hopes and dreams. Instead it turned out to be the best thing that ever happened to us. If we hadn't lost our jobs, with two little boys, a new baby on the way, half a renovated house, a mortgage and bills to pay, we would never have started living the Cheapskates way, learning how to live life debt free, cashed up and laughing and we would never have started the Cheapskates Club.

1 comment:

  1. I have followed most of these ideas for years and I still can't see a way out. The only thing we don't have is an emergency fund as it seems to get eaten into by something that is needed immediately, like a power bill, etc. I'm going to keep trying though, you give me hope that there is a light at the end of the tunnel.


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