When Life Gets Tough, How To Keep Your Head Above Water

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My husband and I went through a trying financial time recently. He lost his job on Halloween of last year, and it took five months for him to find a new one. Truth be told, he’s still in the job market because even though we are thankful that he found this job, he is quite underemployed as far as pay is concerned.

I am sharing this personal information to show you two things. The first is that almost everyone will go through some sort of financial churn in their lives. And the second, is that even though half of our household has been out of work for five months and is now making much less than before, we are still in a good financial position because we have taken some of the advice I am going to talk about below.

Whether it’s losing a job, purchasing a home that was too big for your wallet, adding onto your family, incurring unforeseen medical debt, or any other reason, here are 5 things you can do to survive this temporary time you are facing.

Take Advantage of All the Freebies You Can

It is so important to remind yourself that you will not always be in this financial situation. And specifically if you are unemployed or underemployed, even though you might just want to sleep on the couch all day in between Seinfeld reruns and scoops of ice-cream, you need to take advantage of this time that you’ve been given because it will not last forever.

Fortunately, there are many free opportunities available to people who have more time on their hands than money. To start your search, check out area museum/zoo/attraction websites for any free days or free hours they provide. For example, here in Houston my husband and I took time to visit the zoo on their free days (the first Tuesday of each month from 2:00-6:00 p.m.), as well as visited the free Contemporary Arts Museum.

If time is not on your side during this financial churn, don’t fret. There are still freebies available to you, such as free tax return help for lower income years and even a free cell phone plan.

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Go Back to Paying Only the Minimum Payments on Your Debt

It’s going to hurt to not be able to send more than the monthly minimum payments into your creditors like you have been doing (you have been doing that, right?). But the fact is, now’s not the time to freely give your limited money over to someone else. Continue making the minimum payments on all of your debt and that should be it.

Once you are out of this hot mess, then you can go back to paying your debt down more quickly, which will only put you in a better position for your next financial churn.

Preserve Your Savings by Immediately and Drastically Cutting Back

Did we think we were going to be unemployed for 5 months? Heck no! The fact is, you don’t know how long you will be in your current financial situation. So the best policy is to immediately make the cutback to bare-bone necessities. This strategy will enable you to preserve your emergency savings (hopefully you’ve been reading along and taking the advice here on ReadyforZero’s blog about saving during the good times…) for as long as possible. And if you haven’t got an emergency savings, well then you’ll need to do this anyway.

What does a survival financial strategy look like? Do away with the easy things first like eating out, going out, and clothes shopping. Then call your service providers where you have fixed expenses and negotiate lower ones. Next, take out all of the extra goodies that have crept into your grocery basket each week and keep it to the necessities plus one or two items to keep a smile on your face (for us, it’s ice-cream!). And once you’ve done all that, start working on ways to cut your electricity use, your gas use, and any other areas you have control over.

Don’t Let Fear Dictate Your Decisions

This one is difficult to do, but is very important as decisions made from a fearful place are often only good for you in the short-term. If you have savings, then you need to remind yourself of that each and every time the fear-bug creeps up during times of financial churn. For those without savings, you need to remember to have faith that your situation is not going to last forever. It’s not, I promise. By taking a few minutes each day to check yourself mentally, you will be putting yourself in a much better place to make the kinds of decisions and find the kinds of opportunities you need to get you out of this time period and into more lucrative days.

You may think some of these sound extreme, but remember, when you are in dire financial straits and do not know when they will end you’ve got to act like they will continue for the unforeseen future in order to stretch your limited resources and preserve your savings for as long as possible.

Image Credit: Laurent GUERIN

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  • http://sunkcostsareirrelevant.com/ Slug @ SunkCostsAreIrrelevant

    I feel you. My job officially ends in less than 2 weeks. Then severance 7 weeks later. Then there’s just a giant question mark about where the money comes from. Luckily we have saved up a nice reserve during the good times. I’m just hoping my network will lead me to the next great opportunity in the next couple of months. Time will tell I suppose.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hey, wow, sorry to hear about that! I think you’ll do great, but I’m sure it’s still very unsettling. It must help a lot to have a reserve saved up – that’s something we always recommend doing. Anyway, thanks for your comment and best of luck to you!

      • http://sunkcostsareirrelevant.com/ Slug @ SunkCostsAreIrrelevant

        Thanks for your kind words. I’ll say the same thing here that I’ve said before. Network now before you need the job. It’s been incredibly valuable for me.