Layoffs have resurfaced at my husbands place of work, so I’ve been playing around with the budgets to determine our bare bones budget if the absolute worst was to happen…we’re hopeful that it won’t affect us, but if it does we want to be prepared.
Here’s what we would do to our current budget;
- Telephone: Would increase to cover the cost of basic Internet.
- Digital TV: Would be cancelled
- Fun: Cancelled!
- Miscellaneous: Would stay the same but instead of haircuts, etc would mainly be used for transport
- Window Cleaner: Cancelled
- Gifts: Would be cancelled I’m afraid.
What would you do? Would you still say, buy gifts? I’d love to hear your thoughts on this.
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{ 13 comments… read them below or add one }
Nope – no to gifts! People would just have to understand and if they don’t, then that says something about them not me. It’s clear that you are already living close to the bone with your current budget!
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Laura Reply:
April 13th, 2011 at 7:53 am
Jane
Agreed re gifts! It doesn’t feel like ‘close to the bone budgeting’ that’s probably a good thing, right?
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Better to be prepared, we just did this too.
I would probably keep gifts if they are for Christmas, but I would cut it a bit.
But if they are just miscellany gifts, I would get rid of it.
Hoping that it doesn’t come to having use this budget. I will be thinking of you.
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Laura Reply:
April 13th, 2011 at 7:55 am
Thanks Niki we’re hoping that it doesn’t come to this, it probably won’t but we never count our chickens!
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We had to do a bare bones budget when I quit my job and stayed home with my son for a year. My husband took on another job and was working 72hrs/wk. He only came home on the weekends. I’m forever grateful for that time he has blessed me with.
It’s tough, and you have to sacrifice a lot, but it can be done. I rarely buy gifts anymore. Unless I’m going to a birthday party. I like buying practical gifts because I hate thinking of my money being thrown away.
But yes, everyone is replaceable in the workplace, so we all could lose our jobs. One good reason to save.
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Laura Reply:
April 13th, 2011 at 7:57 am
@Melyssa I agree no job is totally safe anymore, so best to be as prepared as you can be
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Layoffs would throw a bit of a kink in your plans! I think the *fun* category would be the hardest one to do away with completely!
Bernice
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Laura Reply:
April 13th, 2011 at 7:58 am
@Bernice..or a push to move abroad earlier?
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Eek – sorry to hear you’ve got that hanging over you. As for the gifts, I think it depends who they are for and the occasion. I try to keep a few ‘spare’ gifts in my gift box in case I get caught out (someone always ends up randomly giving me a Christmas present that I didn’t expect)! You could easily adapt this idea and keep a few generic gifts around for lean times (I find photo albums pretty good). Generally, though, I’d say a nice greetings card instead of a gift is 100% fine if you’re out of work.
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Laura Reply:
April 13th, 2011 at 8:05 am
Thanks Shoestring..I agree, a nice card is fine…I’d happily just have that from family now.
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Several years ago, during a terrible financial situation, my husband and I had to cut back to bare bones…and I do mean bare! My husband is a farmer and at the time I was a stay-at-home mom. I know work outside the home. We were on the brink of losing our farm and we were terrified. We canceled our tv, our landline phone (and internet!), one of our cell phones, and lived off what we had in the pantry/freezer/garden for 3 months. I only spent money on milk and staples such as flour, oatmeal, etc. Believe me, there were some very interesting meals cooked during that time! During the heat of the Nebraska summer when outside temps can reach 100°F we either turned our air conditioner off or set it at 80° if we were dying of heat. lol We parked my car and I only went to town if it was absolutely necessary and I do mean absolutely necessary! We didn’t buy gifts for anyone, including our small son who turned 2 during that time. My husband used scrap lumber and built him a beautiful little play fort in the yard for nothing and that was our gift to him. I used leftover paint to spruce it up. We threw him a party complete with cake and ice cream but the only store bought gifts he received were from friends and family. He was 2 — he didn’t know store-bought from scrap. It was hard on our then 13 year old daughter — she understood what was going on and didn’t get to do a lot of things that her friends were getting to do. We did have to borrow a tiny bit of money from my folks during that time but we made it through.
When I think back about that whole experience, I almost get physically sick. The sleepless nights worrying about things and the feeling of isolation and despair is somthing I never want to go through again. We learned 3 very important things: don’t spend more than you have, make sure you havee an emergency savings account for backup, and lean on and love each other no matter how hard the times are !!! We have a lot less debt now (still plugging away at it) and have a growing little savings account to fall back on if needed. Our daughter is now a college graduate and living through this experience has taught her these important lessons on saving/not spending. Wow, this is a long windy comment. Sorry. I just wanted to tell you what we did and that it can be done. I hope things go well with your husband’s job and all of his co-workers. Take care!
Kristina
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Laura Reply:
April 13th, 2011 at 8:07 am
Thank you for sharing your story Kristina..hopefully you got my email
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Kristina Reply:
April 13th, 2011 at 3:31 pm
I did, Laura. Thank you!
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We have a small amount designated towards gifts in our “Emergency Budget”. We definitely would scale back on what type of gift we purchased and who we were purchasing for. We would probably not buy birthday gifts for family members who are older than we are (our siblings/parents), but would continue to buy something for the kids…but on a much smaller scale. BUT…if ever we had to start living off the Emergency Budget, then it would probably be a play-it-by ear budget item. We’d certainly have to be flexible and re-prioritize each month what we’re going to spend our $$ on.
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Laura Reply:
April 13th, 2011 at 8:11 am
Hi Steady Plodder, good point, we could just buy for the kids or scale back..thinking about it though gift buying would be the last of our priorities…lets hope that it doesn’t come to this
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Funny, my husband and I were just talking about this the other day. He works for a lawfirm, and a lot of large firms are going bankrupt thanks to partners leaving in droves. His firm seems okay, but one never knows. This is an excellent exercise no matter if you think you are going to lose your job or not. A plan in place for the unthinkable is peace of mind. I hope your husband isn’t affected…and as for gifts? No gifts. Period. If my husband lost his job, we would have to scramble. Luckily, we own more than 50% of our home, and if we had to, we would sell it and move to a less expensive area and buy a home outright. For now, though, we are trying to save up a sizeable emergency fund that would allot us some time.
Sending good thoughts your way…hope everything works out!!
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Laura Reply:
April 14th, 2011 at 7:33 am
Thanks Sharon! I can’t explain how much our emergency fund brings us peace of mind….it the best financial decision we’ve ever made. Hopefully your husband will remain unaffected
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It’s a good idea to have that emergency budget. This is just me, but I’d cut the groceries, turn the heat down, unplug stuff, etc. before I’d cut all the fun. Or make it into a game whereby whatever I saved in groceries, I could go have fun with or something. And / or I’d brainstorm options of how he could bring in money while he’s looking for another job to make up that 160 shortfall – or more.
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Laura Reply:
April 14th, 2011 at 7:28 am
@Jacq All good ideas….I’m 100% certain that cutting out digital tv (ESPN!!) would motivate him enough to get looking for another job…;) Lets hope that it doesn’t come to this..best to be prepared though.
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Laura Reply:
April 14th, 2011 at 7:30 am
…and obviously I could always get my lazy bum into work!!
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Totally off topic, but there are window washers in the UK? I have had 3 different cleaning ladies and they all refuse to do windows. It’s like the lowest of the low jobs around here.
One of the best things that has happened to us is the threat of my husband and I both being laid off at the same time (we work at the same company), but actually managing to both keep our jobs. It was a BIG wakeup call as I was about to give birth, my kitchen was gutted and so was my mom’s hall and bedroom. We still had a lot of spending to do to get the houses to “sellable” condition if we had to move and really not that much buffer. We clamped down for almost 2 years and finished paying off our house and built up a good emergency fund. Our bare bones budget was much higher than yours because we had 2 mortgages and it was scary.
Your budget is already very modest. I think it’s great that you make the most of your money to get to that dream location faster.
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Laura Reply:
April 16th, 2011 at 6:59 am
Thanks Sandy! We face the same thing in 2009; it really motivated us to get that emergency fund together!
Yes, we have window cleaners here. Mine does houses and local businesses on a weekly/monthly basis. He has a good small local operation going
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Having been hit with redundancy twice in the last 3 years, you are doing the right thing. It’s best not to overcommit yourself, mortgage yourself up to the hilt, spend too much on credit and generally stick your head in the sane when times are good, because if it hits the fan, it’s 20 times harder to reign it back in. Bare bones budget is what I lived on when I lost my job last time at the height of the recession in 2009, and it hurts, but when things get back to normal, and they will, you are so much better off. You are doing the right thing by being prepared. In terms of gifts, what I did was make cakes or biscuits for people and put them in pretty boxes, or stuff like that – costs next to nothing but makes you feel a bit better. Best advice is to keep your eye on the prize – it always works out in the end.
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Laura Reply:
April 16th, 2011 at 7:00 am
Hi Sam and thanks! Ouch to being hit with redundancy twice!
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make gifts! there are many things that can be given that do not cost money. time and effort for example. can’t believe how cheap your house insurance is. does that include contents too? we pay £35 a month!
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Laura Reply:
April 16th, 2011 at 6:55 am
Hi Mo
Yes contents and buildings. I’ve lowered the contents to a realistic amount…we don’t have a lot of stuff. I did a search through moneysupermarket and compared quotes. (your house is worth more than mine so that will account for a little more expense)
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Hi Laura. What a stressful project! It’s smart to prepare for the worst, but hope for the best. My husband and I were in a situation the year after our first son was born where neither of us had steady income. He was trying his hand at real estate, and I had just closed a small business and returned to school.
The one thing that helped more than anything else was our emergency fund. We had the equivalent of six-month’s income in our fund and buy stripping our budget to the bare bones, we made it last almost a full year! Of course we had to use our credit card for the next year after the fund was drained (ouch), but had we not had that emergency fund, things would have gotten REALLY bad — fast.
Right now, while we’re trying to pay off our debts, we only have about two month’s expenses in our emergency fund. It makes me nervous, but it feels like the best way to get rid of the debt. Without the debt we’ll lower our monthly expenses and decrease the amount of income we need.
I’ll be keeping my fingers crossed that your husband gets through the layoffs still employed!
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Laura Reply:
April 17th, 2011 at 6:37 am
Thanks Jenny, hopefully he’ll be ok. Thankfully we have an emergency fund saved for exactly this scenario!
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