Living Below Your Means
Coming Out Ahead after Layoff

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By mrsDJB
April 11, 2008

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Hello fellow LBYM Fools!

I haven't posted since the Fall of 2005 and recently came back to the Fool. What a pleasure it is to "see so many familiar faces" - or at least screen names. I've been reading a bit to catch up and while some things never change (apparently SP still has the same carpet!) others have had big life changes (marriages, more kids, etc.)

The last few years have definitely had ups and downs for me. In Spring 2005 we bought a new (to us - but only 14 mos old) house and moved about 20 minutes away from our old house. It has taken me a LONG time to get used to the new place and the new town. We live in one of those bland suburban subdivisions where no one knows anyone but no one is unpleasant either.

When we moved my husband had a great job running a plant and got a great promotion shortly after. Sadly, the promotion meant he was sometimes working 18 or more hours a day. Eventually he accepted the siren song of a recruiter and jumped to another place - more money, less hours, better commute - sounded perfect. It was a nightmare! He lasted about 8 months and got laid off.

Thank goodness for LBYM!! In our old house I could handle all our expenses on my salary alone. In the new house - not so much. Fortunately unemployment covered the gap. I am SOOOOOO not sure how that worked - it seems impossible on paper - but it did. And when unemployment ran out and there were STILL no jobs he took on a temp/contract position for a 25% cut in pay. It was nice to have money coming in but the work was terrible and the company was moving anyway so we knew there was no chance of a future there.

My husband swallowed his pride and took a civil service exam - and apparently scored very high because within a couple weeks the offers for interviews literally poured in with the daily mail. All told he had the opportunity to interview for 87 open positions. Wow! (He's an accountant but not a CPA.) So he took a job in state government for just shy of a 50% paycut from when he was layed off - pretty much 9 months to the day from when he was layed off, too.

We didn't touch our savings at all - until the state held his first check plus based on his start date he didn't get paid at all the first month. It worked out fine because while he was unemployed we actually INCREASED our savings by about half. We banked his severance and our tax refund.

He's been back to work for more than 6 months now and come September he will have permanency. Yup - in our state once you pass your year of probation you are employed until retirement. Cool! The benefits are spectacular and the hours can't be beat and he gets lots of time off. Oh, and he belongs to a union, too, so works under a contract. I fought hard against this decision but it has definitely worked out for the best.

So, learning to live on a very different income level looked like it was going to suck but it doesn't. Some interesting things - because we aren't exhausted, stressed out and miserable we seem to want less. There aren't any major purchases on the horizon - although we have a wish list and at some point will start doing things like getting rid of the refrigerator we hate or putting in hardwood stairs since vacuuming carpet stairs really bites.

The best part? We are actually going on a real vacation for the first time in seven years! We are taking our first cruise.

I've been thinking a lot about how we are possibly able to afford a vacation after going through some really rough financial times in the last few years. Here is how: We have no credit card debt and haven't since we got married. We have a reasonable cash cushion for an emergency fund and "got layed off" savings. We also have other non-cash sources of emergency funds (stocks, mutual funds, etc.) During our hard times I paid off my car and have no intention of replacing it. Ever. I love my car. (La la la la la - I can't hear any of you trying to convince me otherwise!!). We charged what we could on a credit card that offers points for gift cards and got Target gift cards to stretch our budget (cat litter, cleaning supplies, paper goods, etc.). (We pay this card off every month.)

We already cooked all our meals at home and brought our lunches. We did cut back on dining out as entertainment - but the upside was that we ended up being MORE sociable because we invited others over for game nights, cookouts, etc. We got back into some old hobbies (a '50s rock band for him, knitting and crocheting for me - using a pre-existing yarn stash) and we made great use of our wonderful local library for books, magazines, dvds, etc.

We didn't have a cleaning service so that wasn't an issue. And we made the hard choice to continue with our lawn treatment service. We've put a ton of money into putting in a lawn and landscaping and we are in the midst of a multi-year plan. We payed as we went along and it worked out fine.

We continued to donate to charities as we were able but spent more time volunteering as opposed to writing checks as we did in the past. Getting involved has turned out to be a nice thing! I volunteer with the Homeless Aid group locally, we volunteer together as ushers at a local theater/venue, and I belong to a group of women who volunteer together on a variety of women's and children's health causes.

So, to sum up this very long post - we were going along enjoying the good life when it all turned upside down. We were living below our means in the first place so we were able to weather the storm and actually came out ahead in the end. It wasn't easy and it wasn't fun but we were able to find some good things: we made some friends, we tried a lot of new things, we trimmed more fat from our budget, we were able to do some good in the community, we were able to take advantage of some things we already paid for (in taxes), and we were able to use a credit card wisely and to our advantage. The best part is that we relied on each other, supported each other, and made it through together.

Now I am extremely excited to be going on our first cruise in 26 days! And I am excited to have come back to the Fool and to have the opportunity to say thank you to so many who had their wise LBYM messages playing subliminally in my ear when I needed it most!

All the best,