In a recent blog, I shared some strategies for preparing for financial emergencies like job loss, health issues, or other unforeseen circumstances. (If you missed it, you can read it HERE).
Last year, my husband’s position was eliminated, and he was placed in a role that reduced his income by 50%. This was a real test for us and gave me the chance to put the methods I shared with you into practice in our own lives.
Today, I want to share how we managed to get through that tough period.
Our Background
In our 27 years of marriage, we’ve faced two job losses and a significant reduction in income. We’re no strangers to financial emergencies. Here’s how we’ve managed these setbacks over the years.
2005: We had just bought a house we could barely afford, started a business using credit cards, and had various other debts. Everything we owned was financed. Both my husband and I were unemployed for three months with no savings or family to help us. Out of desperation, we lived off credit cards. It was a life-changing experience, and we vowed never to be in that situation again.
2013: Eight years later, we had learned a lot about managing money. We had no consumer debt and some savings, but not enough to cover six months of expenses. With two kids, our expenses were higher, and I constantly worried about running out of money. We managed to get through it without taking on any debt.
2023: When my husband’s income was reduced last year, it hit us hard emotionally. The fear and uncertainty crept in, reminding us of our past struggles. But this time, things were different. We had no debt and enough savings to sustain us. I felt a mix of anxiety and relief—anxiety because of the sudden change, but relief knowing our finances were much stronger this time. We knew we could face this challenge head-on with a solid plan and the lessons we had learned over the years.
Our Approach
Emergency Spending Plan: I was so thankful I had an Emergency Spending Plan ready before our income was reduced. After the initial shock, I reviewed and updated it. This plan told us exactly how much money we needed to survive and gave us confidence in our decisions.
Lifestyle Adjustments: We got even MORE intentional with our money, choosing where to make cuts and what to keep. We cut back on eating out and paused our investment contributions. We continued tithing and covering upcoming medical expenses.
Increasing Income: I took on more clients and additional contract work to increase my income. It wasn’t easy balancing the increased workload with family responsibilities, but the goal of keeping our emergency fund intact kept me motivated.
After a few months of cutting expenses and maximizing income, it became clear that my husband needed to find a new job to achieve our financial goals. We realized that no matter how much we tightened our spending plan or how hard we worked, his current position wouldn’t allow us to live the life we wanted, invest for our long-term future, or even have the peace of mind we needed. Despite his dislike for change and the fear of stepping into the unknown, my husband made the difficult decision to switch jobs. We knew it was a necessary step for our family’s financial stability and long-term goals. His courage to embrace change not only improved our financial situation but also strengthened our resolve to face challenges together.
Financial Resilience: I’m incredibly proud to share that we navigated our most recent challenge without needing to dip into our emergency fund. It really showed us the power of our emergency plan and the discipline we’ve honed over the years. While I always encourage having an emergency fund, I’ve also guided many clients through job losses and financial setbacks without one. It’s about having a solid plan and the determination to persevere. Our journey is proof that with determination and wise financial choices, you can overcome challenges and emerge stronger.
What can YOU do?
Financial emergencies are tough, and it’s impossible to eliminate all the emotions that come with them. But being prepared can make a huge difference. Our story is just one example of how having a plan in place can help you navigate tough times with more confidence and less stress.
I hope our experience inspires you to take proactive steps in securing your financial future. If you haven’t already, consider creating your own Emergency Spending Plan (learn how HERE). And remember, you’re not alone in this journey—I’m here to help. When you need guidance or support, I’m just a quick email away.
Imagine being ready for financially challenging times before they happen! I can help you with that! If you’re ready to work on your finances, I’m here for you. Schedule a complimentary call HERE.
