It’s been over a year since Aaron lost his job. He left a seven year working history with a great company for something that wasn’t sold to him properly in the interview process. There were some, let’s say “odd things” that went on during his 3-4 months working there and he was fired two weeks before Christmas. In hindsight, Aaron should have saved emails and documentation from his employer so that he could have received compensation for their wrong doing. However, hindsight is 20/20 and the most important thing to remember when in a tough situation is to focus on the future and what you can impact moving forward.
Of course, when you’re in a relationship and paying bills based on you and your spouse’s paychecks, losing your job doesn’t only affect you. Or vice versa, when Aaron lost his job I’m pretty sure that I was more terrified of what would happen to us in the future than he was. I learned that through this process, it’s important to keep communication open and to discuss your feelings with one another, but to do so in a constructive way. Focusing on the fear of not being able to pay our bills or put food on the table is a very real feeling, but I allowed myself to get that off my chest only once, so that I could make way for positive and creative thoughts that would allow us to put together a very real plan. I hope this doesn’t happen to you, but if it does, I’m sharing some of the things I learned. Granted, my situation and story will be different from your circumstances, but hopefully it helps you to think outside of the box.
- File for Unemployment: This can sometimes be a long process, so make sure you do this right away.
- Potential Lawsuit: If you think there was any cause for a wrongful termination, you should research your rights. If you don’t have any proof, it will be difficult to fight, but it’s always worth investigating.
- Lean on Your Support System: Reach out to family and friends, share on social media, send out an email, etc. Don’t try to protect your pride in this situation when you never know who might have an opportunity available. You don’t need to get into the nitty gritty of the situation, but be prepared to share what career opportunity that you’re looking for.
- Update Your Resume/Social Profiles: This way if someone comes back with an opportunity and needs to move fast. You can easily update a pre-written cover letter or objective on your resume to match the position and send it off. Time is of the essence when you’re without a job.
Bill Consolidation: each company has their own policies and restrictions and makes decisions based on the individuals payment history and credit, please use this as merely a guide only.
- Car Loans: At this time, I owned my vehicle and was paying towards a 1.9% loan. Thankfully Toyota Financial reviewed my good credit history and granted us a two month extension. We were able to defer payment on my car loan for two months and there were two months tacked on to the end of my loan. Aaron called Toyota Financial for his truck lease, but since he was paying towards a lease they were going to charge his a transaction fee to defer payments, so we decided not to move forward with deferring his truck payments.
- Home Mortgage: Home mortgages oftentimes include a greater line of credit than a car loan, so they make it a bit more tricky in order to protect themselves. Essentially, there are two things you can do; (1) Mortgage Deferment, and (2) Forbearance.
- Mortgage Deferment starts with a financial interview. Before this could take place, I prepared necessary documents of my most recent paychecks (to show my income), our past two bank statements (to show our spending), my tax summary from the previous year, the letters stating that we have deferred payment on my car loan, and a cover letter stating that I’m inquiring about a mortgage deferment and why.
- Aaron ended up getting a new job before we needed to move forward with the financial review, however it sounds like our lender would allow us a Repayment Plan for the Mortgage Deferment up to 3 months, but then we’d have to make double payments after those three months were up. Or we could pay half payments and then tack on the other half that we didn’t pay to the regular payments after that deferment timeframe.
- The second option would be Forbearance. This would allow you to take a break in payments for a certain amount of time, but once that timeframe is up you would make a lump sum payment or a balloon payment all at once. Unless we were expecting a large tax return, or if we were expecting Aaron to be making a lot more money in his new job or for me to receive a raise, these options did not sound the best. It’s easy to prolong your situation and be caught in a bigger mess later on, so we did our best to only borrow from our lenders or defer payments when we absolutely needed to.
- Internet, Cable/Dish, XM Radio, etc.: Since Aaron had this new found free time, he made a point to make those dreadful calls to all of our service providers to negotiate better rates and/or freeze service. We were very surprised how easy it was to reduce our bills.
- Internet: Aaron completely reworked our package with their new offerings. He revisited options and ended up getting more speed at a much cheaper price. Hooray for technology!
- DISH: We had Hoppers for three different TVs and ended up never even using the third TV. Aaron was able to cancel the third Hopper and got a refund on the unit. He switched to a flex pack that allowed us to save $30 a bill and he went through all of the channels to make sure that we weren’t paying for premium channels that we weren’t using. If Aaron was without a job for longer, we definitely would have completely cut ties with our cable provider as it is not an expense that we need to live by.
- XM Radio: Aaron called to cancel our account for both cars and they ended up offering his a less than 50% off discount. We went from paying $30 a month to $11 a month for two vehicles.
- Southwest Gas and SRP: Thankfully, we had balanced billing with our utility providers, so we had monthly charges that were expected instead of super high charges during specific seasons.
- Gifts: The timing couldn’t have been worse since it was a couple weeks before Christmas. However, this was the one year it paid to be a last-minute Christmas shopper. We called our friends and family right away to let them know about the news and also if we typically exchanged gifts with them, we let them know that we’d have to hold off this years as we didn’t know how long the unemployment would last. Egos aside, it is not worth putting yourself in debt over Christmas. Thankfully, Aaron and I don’t have our own children to buy presents for, but I’d like to think if we do we would have been saving all year long. The only three presents we wanted to purchase were for our three nieces (our nephew was not born yet.) So, we told our siblings that their presents would be delayed after our financial situation was back to normal and we were able to tell our nieces on Christmas day that their present was a special day with Auntie and Uncie at Build-A-Bear. Thankfully the girls didn’t seem to mind.
- Reevaluate Where the Money Goes: It’s amazing when you actually evaluate your spending and find out where your money goes. Aaron and I realized that most of our money goes to eating out. To use that is a form of entertainment. If it’s not apparent by looking at your bank accounts, you can download the free app, Mint, and that will sync to your banking accounts and do all of the hard work for you. It will tell you what percentage goes into what category, which is very enlightening to see.
- Cut Out the Extras: We quit dry cleaning (I only wore clothes that I could wash myself), facials, manicures/pedicures, yard work and house cleanings. The people who we paid monthly or bi-monthly to clean our house or to do our yard work, we had open contracts with them and asked to take a short break. We also shared their information with our friends, asked if people needed referrals on social media, and wrote recommendations for them on review sites so that they could supplement their income elsewhere. We have a quarterly contract with our bug guy, so thankfully it didn’t impact our pest control, but if the unemployment went on any longer we would have needed to ask to freeze our account.
- Non-monetary Social Outings: I’m notorious for asking for my friends to hang out with me outside of a restaurant because I’m usually trying to eat healthy, but doing things that doesn’t require money is usually pretty tough. Hiking or going for dog-walks was definitely my go-to during this time. It was a lot of fun! The pups enjoyed it too!
- Gym Memberships: I pay annually for my gym membership or will purchase class packs when they’re on sale. That way I don’t have to pay each month and it allows me to save up during the year. I didn’t have to freeze my gym memberships, but it’s worth asking about if you’re in this situation. Usually gyms won’t freeze accounts unless there is an injury, however if you’re going to a privately owned gym it’s definitely worth a shot to share your situation. If you want to actually cancel your account, you’ll have to pay for your final month and when you want to rejoin you’ll have to pay another fee to join, so it would make the most sense financially to freeze an account. This could even be the case anywhere that has memberships like European Wax Center, The Joint Chiro, etc.
- Consolidating Debt: Aaron and I did not need to do this during this time because we’ve worked really hard to be credit card debt free, but when we were renovating our house we actually consolidated our credit card debt to a low interest loan. Another option is consolidating debt with a credit card balance transfer. This is not something to go about lightly or to think that you can do at anytime. This is one of those “Plan B” options only. The credit card balance transfer is a good option if they give you 0% interest for a specific period of time and you know you can pay it off during that time frame, or if they give you a certain number of points and you are needing those for a trip that you’re booking and you have the money to pay it off immediately. Something to be aware of is your timeframe for paying it off. The lender will get you if you miss a payment or take too long to pay it off because the interest rate typically goes up astronomically.
- Monetize Your Talents: This is where you start to think outside the box and come up with creative solutions. I’m not talking about doing something illegal, although it does make for great TV entertainment. If you are passionate about something and it’s already a hobby, find a way to monetize it. There are so many ways to share your talents with the world; like Wag or Rover (dog walking or dog sitting), Etsy (selling handmade or Vintage items), using your Instagram to sell or announce services, etc. I started selling my services as a closet organizer and a wardrobe stylist, which has been a very fun way to make a slight income on the side.
- Sell Your Stuff: I realized that there are piles of cash sitting around my house in the form of stuff that I never use, especially clothes. I’ve built up my Poshmark following so much that I know sell for my friends and personal styling clients on my Poshmark too. I also have used CraigsList, OfferUp, LetGo, Facebook Marketplace, and the old fashion garage/yard sale. What helped me bring more people to my garage sale was to offer my driveway to my friends so they could sell their items at the garage sale too. It helped to bring more people in by looking like we had more stuff and a greater variety, plus each person who sold at our garage sale posted on their Facebook and Nextdoor websites.
- Get a Side Gig: There are so many companies that hire part-time contractors, like Uber, Lift, Bird (you can charge electric scooters), OnTrac, Amazon, etc. Or you could work somewhere part-time like at Trader Joe’s or Starbucks. But, only get a part-time job if it’s worth your time. If you’re spending all of your time on a side job that isn’t a career, then you could be missing out on the time that you could spend networking, applying for jobs, and interviewing. Plus, you may lose your unemployment.
- Get free Sh*t: I know this sounds lame, but you’d be surprised what you can win! Around the time when Aaron lost his job I started using this new online PR tool for pitching media. They were a new company and were really relying on refers. I shared a referral code on social media, which entered me into a monthly drawing and I won $1,000! It was so crazy how it came at a time I needed it the most. Keep your eyes and ears open, and be open to these kind of things. You can easily enter your information into a form and hope for the best, but if it’s something that takes a little more work or energy (like thinking of other PR professionals who would benefit from this tool), it might just pay off.
You’re Telling Me That You Read This Whole Article and You Aren’t Unemployed?
Well, I don’t want you to leave empty handed, there are some things you can do now to prepare in case this happens to you…
- Is your debt paid down? Having a great credit score and being free of all credit card debt will allow you to take out a loan if you need a plan B.
- How long will your savings last you? If you calculate your bills and the basic cost of living, how long will your savings actually last you? Now, think about how long will it take you to find a job. If you’re not close to that amount of time in form of a savings, set a goal for creating a savings that you can fall back on just in case. This is not a savings account that you can pull from for that wedding in Hawaii – that would be a travel savings and it defeats the whole purpose of a “Oh Shoot!” savings if you’re using it for vacations.
- What other types of savings or investments do you have?
- Litecoin, Bitcoin, Acorns: Aaron started investing in Litecoin and Bitcoin a couple years ago, so at the time of his unemployment he was able to withdrawal his earnings. Same with his previous employer’s stock plans. Recently, I started using the app called Acorns. When you have this app set up to your debit or credit cards and you use those cards to make purchases, it will round up to the nearest dollar and take the difference and not only add it to a savings account for you, but also invest it for you based on some parameters that you choose. If you haven’t downloaded the app and signed up yet, use my referral code and you’ll receive $5 to start investing right away at no cost to you! I love this app because it’s also teaching me about how to invest. Plus, Acorns will give you free money based on special deals. For example, they have a deal that if you shop with IT Cosmetics through Acorn, IT Cosmetics will invest 2.5% of your purchase into your Acorn account. To kick of the New Year, if you refer 12 friends during the month of January Acorn will invest $1,000 into your account for you! Help me get to 12 referrals by using my referral link when you sign up: https://acorns.com/invite/KW2LD2. (THANK YOU!)
- 401k Loan: Although Aaron and I have 401k plans, same thing with the travel savings, the 401k plans are for retirement. Although you can pull out the money if you absolutely have to, you will receive fees and fines, so this should be a “Plan Z” and you should probably just forget that you even have money there. However, one thing that I can do with my employer is pull out a 401k loan. I do not receive a fee for pulling money out, but I am limited on the amount of money that I can pull out and I have to pay the loan back to my own 401k account within a specific time frame. Essentially, I would be making my regular 401k contributions plus a monthly payment back to my 401k account on top of my contributions, so that would be a last resort since you’ll be receiving less money each paycheck, but you would have received a lump sum when you initially pull the money out. Make sure you discuss this with your bank who manages your 401k to make sure that this is an option.
I hope this information was helpful. I realize that I didn’t go into the whole mental and emotional side of things, but if you ever need any help, advice, or simply need someone to listen I am here! You know where to find me! Good luck and remember this too shall pass.
Hair by Lauren Wohlin of Knotted Salon, @l.a.dub