If you’ve been through a layoff, especially the family benefits-holder, then you know how stressful it is. But it doesn’t have to be this way.
During the first 20 years of marriage, we experienced two significant layoffs and never touched our savings. As a family, we prepare for emergencies knowing they happen when you least expect it. Simply put, we have an emergency fund (6 months of expenses saved). And we make lifestyle changes to adjust to the lack of income.
The Storm
My husband was laid off in early 2019. The news arrived just before my son‘s 13th birthday. We had planned to go skiing and kept the trip as scheduled. The next day, en route to the mountains, with the layoff weighing on our minds, our neighbor called. A pipe had burst in our home. We turned around, dealt with the mess and arrived at our destination, albeit several hours late.
One disaster after another but somehow we weathered the storm.
My husband returned to work 5 months later with minimal impact to our family finances. Our house came back together from the water damage and there was margin in our budget to pay for additional expenses that insurance did not cover. Even while my husband was not working, because we live simply. Our lifestyle of less stuff has endless benefits but the most important one is financial freedom.
Financial Freedom
The freedom came from a couples’ personal finance course we took with a small group. The class was a turning point in our family’s financial legacy. Before enrolling, we made good financial decisions and my husband I balanced each other.
We weren’t sure we even needed the course. That arrogance turned into a very humbling experience when we learned all the mistakes we were making. And we committed to increasing and improving our communication about money and fixing these mistakes.
- Whole-life vs term-life insurance
- Carrying a large HELOC instead of paying off debt
- 30-year mortgage versus 15
- Financing our cars instead of saving first
- Swiping debit/credit cards versus paying in cash
- The worst mistake —not setting a budget
The personal finance course we attended as a couple worked just as advertised. It gave us peace when life was anything but peaceful. We worked through 7 steps in 3 months with 9 other couples as our accountability partners. Collectively, the group paid off $45,000 in debt in just 3 months.
We were diligent about our mission to pay off debt and create a budget. We learned how to work together to achieve greater wealth. And because the lessons have stayed with us, our decisions are better as a whole. We are less stressed and communicate about money without conflict more often than not.
My favorite steps is the last one. Build Wealth and Give. During the last three months of the layoff, we enjoyed more unexpected free time. My husband networked and interviewed full-time the first month to secure a position. While awaiting a start date, he spent more time with our son giving them some one-on-one opportunities. He could enjoy this time because he was not stressed about the temporary lack of income.
Teaching Moment
It was also an important teaching moment for our 13-year old. He was old enough to understand how money works. We have encouraged him to give, save and spend cash gifts since he was 3.
The layoff conversation was tricky. At first, he was scared and nervous. Why was dad home all the time? “It’s weird,” he said. We explained we like being weird. We’re not living paycheck to paycheck like 78% of Americans.
We like weird because normal is broke.
Normal is stressful.
Weird is peace during the storm.
Weird allows us to be generous through good times and bad.
Financial freedom is a character trait I hope our son will inherit from us. But I’ll keep setting the example, just to be sure.
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