How to Handle Getting Laid Off

If you want to read what I've done to stretch out my funds to keep my family afloat, skip this and scroll down

I and seven other were pulled into the department manager's office. There was some small talk about what we'll be doing for the weekend, and some status updates about various projects; however, the manager was looking as if she was holding back some news. It was at this point that I knew something was amiss, and my instincts were correct. 

We were told that our last day was Friday, and that we are now being transferred to the temp department for the company. Many of the people teared up, along with the manager, but I felt oddly calm. I never been in this situation before. Any job that I had, I left on my own terms. I was never fired or laid off, but this was different. 

Now, after the whole shock of losing my job wore off, I need to make a plan of action. As you may know, I have a toddler and my wife who is now pregnant. We had plans for the next year with our budget and what we wish to accomplish, but now those plans are gone. I no longer have a steady paycheck or benefits. This is the same situation anyone who lost their job is feeling. The "I lost my job and can't pay my bills."

Thankfully, I have enough resources to last me until mid January. I do have a side business doing consulting and selling items online that pulls in a few extra dollars. I can still cut expenses. 

So now you know what my current situation is. My goal, since I now have so much free time, is to blog what and how I will cope with this life changing event. My goal is to either find new employment or move my business from part time hustle to a full time endeavour. I hope you join in for the ride of a life time.

But you are not reading this just for a sob story. Here is what I've done so far to handle with change of losing my job:

Ten Things I did when I got laid off:

1. I looked at my YNAB reports to see any and all spending trends since March 13. I identified areas that we were spending money in that could be cut back.
2. Called up my internet company and reduced our broadband from 40Mbps to 20Mbps saving 30 dollars.
3. We are withdrawing only 100 dollars per month to spend in three very basic categories: Groceries, Household supplies, and blow. We normally spend around 600 dollars in this area, so we are now only spending 400 dollars. We reduced spending by 200 dollars or 33%.
4. Thankfully, I am not upside down in my car loan, so I am researching how to sell a car with a loan. This would save 160 dollars per month (payment and insurance).
5. We are cutting Hulu and I bought an antenna to get free television. 
6. I am looking at doing some freelance work at various freelance websites.
7. I am learning how to cook.
8. I am learning Python programming language.
9. I am offering free training in QuickBooks and QuickBooks Point of Sale
10. I am relying on Stoicism and faith a lot more. (I know, it is an odd combination!) 

This is just a rough list that I've done, everyone is different. If you have any advice or comments feel free to share!

How to use YNAB to Recover from Financial Set Backs

My emergency fund went from $1,200 to nothing within two weeks.

An unexpected bill for a doctor visit a month ago. The car is overheated, my other car needed two new tires. A class was cancelled and financial aid now says we owe money. My son's medicine was more expensive than normal. 

Things for April were going well, but it is amazing how bad things happen quickly, silently, and without warning. In two weeks our funds dropped to zero. The financial peace we've been building now has taken a step back, and for the first time in awhile, I am feeling the strain of more month than cash.

What happens now? Use debt to bail myself out? Isn't that the mantra, have a credit card for emergencies. My plan of attack (my budget) is now thrown out the window. We are starting May with only $1,050 to budget for May. This only covers my mortgage, one week of food, and to keep the water and lights on. Not a happy place to be at for the average person, but I'm not too concerned.

I get paid next Friday (start of May basically) so does my wife. This adds a cool grand to our account, which will cover our basic needs and mandatory obligations for the month. My next paycheck then covers our comfort obligations and some fun money. Since May is a month that my wife gets an extra paycheck (I get two since I'm paid weekly), the rest goes back into the account. By the end of May our fund will be replaced, and next month paid for with May's income.

How did I do this? 

Using the income you've set aside for next month and any funds not budgeted. Fill the budget categories and go as far down your budget until you are left with zero or close to zero. Then, as you get paid, continue filling your budget until zero. For us, we will have May completely paid by my second paycheck for the month. If you overspend, just move funds between categories to make up for the shortfall. We are expecting the other 2 paychecks from my wife, and 3 of mine to cover June's expenses and refund our emergency cash reserves by the end of May. 

The key is to keep to your budget and spend less than normal, and not to give up.

How about you? How you been in this situation before?

YNAB Coupon Code

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YNAB vs Mint

Get a $6.00 Coupon Code by clicking this link

I've tried many different personal finance software. From the uber complex Quicken, to the free services of Mint.com, and now YNAB. I've gone over why YNAB is superior to Quicken. To quickly sum up why, it is because YNAB helps you on the path of saving money by being a forward thinking financial program. Quicken is excellent looking at past data but it doesn't show you were you are going.

When I compare Mint against YNAB the choice is clear. YNAB is the best choice to start controlling your financial destiny.

Mint is a less robust version of Quicken. It imports and categorize transactions in your checking account, and creates fancy graphs. It allows you to track (though limited) investments. It is a great way to get organized with your finances, and get a complete picture of your state of affairs. The biggest problem I have is that Mint then tries to sell you financial items (credit cards, home loans, auto loans, etc...).Another issue is that its budgeting tool is mediocre at best. The best factor of Mint, its free.

YNAB is 60 dollars (get 6 dollars off by clicking this link). It is as expensive as Quicken Deluxe. It doesn't offer the same reporting or major tracking abilities like Quicken and Mint. At first this was a reason why I didn't buy this program, but I realized that if I don't get my money in order, no amount of reports will change my habits. I switched to YNAB and used it, and the methodology does work.

Unlike my last post about YNAB vs Quicken, if you are just starting to get into managing your personal finances. Start with Mint, since it is free. I would just go straight to YNAB. My wife and I started March first with 1395 in our checking account. We ended March with 1675, which is a gain of 280 dollars. Trust me, one month of using YNAB will easily pay for itself.