Submitted by a Too Thrifty Chicks reader committed to Operation Do Better
What would you do if your current financial snapshot was suddenly frozen in place? What if you would never make any more than you already make? In fact, what if your income was to temporarily disappear and reappear only after the passage of time, and then only in greatly reduced quantity? Do you have a plan for how you would pay the mortgage or rent? Your credit cards? Is that emergency fund in place?
You leave for work one morning, and the whoosh you make as you pass by yesterday’s stack of mail actually blows one of the bills to the floor. Still, your momentum can’t be broken because you have things to do that day. “I’ll take care of this when I get home,” you reasonably think to yourself. Later, I would say “handle it right then” is the first lesson I learned on the day when I would fall at lunch, shatter a leg, and be wheelchair-bound for two months.
My doctor remarked on the number of times I’d fallen in less than a year and ordered an MRI of my brain after surgery to set the leg. Good risk management, I thought. Later I would view the scan with the heads of neurology departments of two major hospitals. Even I could see the neurological abnormality. Was I born with it, only to have it manifest in my last decade in the workplace? Or had I merely fallen one too many times? Only extensive testing could determine the age of the injury, and I had no time for exploration. I had to get healthy because I had a job to do. Or so I thought. Seven months later, I would lose that job shortly before turning 60 and, yes, a few months before vesting in the company’s defined benefit pension.
Let’s shelve the panic and gloom of losing your job just as you turn 60. Or 50, or any age. This calls for swift action What happened to me could happen to anyone if you view the hypothetical situation broadly. Regardless of how you get there, you may face a sudden (read: unplanned) absence from your job. Accidents happen. Illnesses happen. Yes, even to working people who think that their steady income is forever. My advice is to reform your thinking and spending now. Prepare now. Following are some bits of advice that I learned both the hard way–all by myself–and the easy way from the Too Thrifty Chicks:
1. Cut out all extraneous spending. Now. This includes, but is not limited to, cable TV, a landline phone at home, and wine with dinner. Learn to watch your favorite shows online. For example, it is no tragedy to watch ‘The Good Wife’ online on Monday, a few hours after the latest episode airs on Sunday. Eliminating TV service requires you to be intentional in what you watch. During football season, I hang out with friends on game day and watch NCAA football on their TVs. No landline means no robo calls or edgy charitable solicitations. No wine with dinner means you’ll lose weight without changing anything else in your life. Depending on your cable package and taste in wine–in one month’s time–you can re-capture up to two hundred dollars that you were spending unnecessarily. Put at least part of these funds in advancing step #2.
2. Build your $1,000 Emergency Fund now. Sell what you aren’t using or don’t love to fund it. Try pet sitting, dog walking, or babysitting. Brainstorm with your online community. I didn’t have an adequate Emergency Fund. When the inevitable happened–repair work on a car, a pet’s illness, new medical needs–at first I would use a credit card, vowing to pay off the expense the next month…and then another inevitable event would occur. You get the picture. Are you still working? Great. Do it now. I have come to view the Fund as the most important step, regardless of your income.
3. Consider renting space in your home, short-term. I took a deep breath and just did it. What I found was a delightful and steady stream of med school students, interns, and residents who needed housing short-term,( ex: six weeks at a time). I find medical professionals to be ideal tenants because you have a modicum of leverage over their behavior by virtue of having contacts in the admissions office. Medical school is all about advancing through the ranks by doing everything right. Your contacts with people in the medical school means you can retain a measure of control over your tenants’ behavior. So pay a visit to the admissions office for medical school, generally, and to the departments of medical specialties, where you will find out-of-state students who need a place to stay during their 6-week rotations. Yes, this requires a certain amount of bravado. Here, the risk is worth the rewards. Depending on where you live, this could create several hundred dollars per month.
4. Stop shopping. Undertake a spiritual journey towards a path of living in the moment. Try not to want anything. When you realize that you have enough to eat, adequate shelter, and clothing, you begin to realize how lucky you are to have your most basic needs met.
5. Re-define your needs vs. wants, and do so honestly. Realize you have resources to get what you need but don’t yet have. There will be another job. Really.
The author of this post wanted to remain anonymous, and we respect her wishes. We are so appreciative of her sharing her story and hope it inspires you to simplify your living, set up more savings, and be prepared for anything that might come your way.
Until Next Time,