5 Lessons We've Learned from Unexpected Job Loss

A huge thanks to Dave Ramsey's ELP program for sponsoring this post!

A few weeks ago, our family was totally overwhelmed by your incredible support after we shared about Donnie’s recent layoff. It can be a scary time with lots of unknowns and questions about the future, but your encouragement and positive words truly meant so much, and we are so grateful to you for them! This was actually our second time experiencing a layoff, and though I truly hope that you never have to experience job loss in your own family, I thought I’d share some of the things we have learned during our experiences to help others know what to expect and how they can prepare.

 1. Build that Emergency Fund.

Donnie and I first learned about the importance of an emergency fund when we read Dave Ramsey’s book The Total Money Makeover shortly after we got married. I believe that it is important for every family to have an emergency fund—you never know when unexpected expenses will arise—but it is absolutely crucial to have this type of fund in the event of a job loss.

{our little family around the time of our first job loss experience}

While I can’t recommend an exact amount to have stashed away since every family’s needs will be different, the general recommendations I’ve read are to have 3-9 months worth of living expenses on hand in case of an emergency. If this seems like an impossible goal for where you are right now—don’t panic! That amount certainly won’t come overnight, but start by setting a smaller goal for yourself; try to save $1000 or even just $500 at first and build on that.

The first time we experienced job loss, we were very young and our emergency fund was tiny. Now that we’re older and in our 30s {ugh! 😉 } we were able to have a bigger fund set aside. Both times, we were extremely thankful that having even a small amount of extra cushion helped to put our minds at ease a little bit and kept us from going into debt. Build your emergency fund, people!

2. Minimize Your Debt

The less debt we have, the less money we’ll need to survive each month in the event of a job loss. Our family is not completely debt free (yet!), but we have worked really hard to make sure that we don’t have any credit card debt or small loans from purchasing furniture or upgrading our home, we pay off our cars as quickly as possible, and we are continually working to eliminate college loans and mortgage debt. When we have been put in tough financial situations, then, we are able to survive on a lot less because our debt payments are minimal.

I know this can be a hard one. It doesn’t feel as fun to make an extra car or house payment instead of going on vacation or starting a remodeling project. But when that car or house is paid off (or you can pay for it in cash in the first place!) and you don’t have to worry about that monthly payment anymore, there will be no better feeling!

3. Budget, Budget, Budget!

This one is always on my list, job loss or not! I think it is so important to be aware of where our money is going because it makes us more careful of how we use it. If we’re budgeting and job loss happens, we know exactly how much we need to live each month. We know which areas we could stand to cut back on to save money. We are able to adjust more easily because we have a clear idea of our financial picture and our family’s spending.

Even if you’re not in a job loss situation, budgeting will help immensely with the things I just talked about above: building an emergency fund and minimizing debt. It might seem like keeping a budget would feel limiting, but in the grand scheme of things it is so freeing because you are the one telling your money where to go rather than just hoping there’s enough in the bank account when you need it. Plus, I give you free pretty printables so you’ll have the cutest budget on the block. Can’t beat that! 😉

4. Have Your Insurance Ducks in a Row

Even when things are tight, insurance is an area where you don’t want to skimp! Both times we have experienced job loss, we have been fortunate that our health insurance needs have been covered in other ways so that there was no lapse in coverage. We also frequently check to make sure that we are not only getting the best price on other policies like our home and auto insurance, but also that we have the best coverage for each. The last thing we would want to have happen when we are already on a tighter income is to have a major event occur and find out that they insurance we thought would cover the cost of our car or our home and possessions actually doesn’t because we didn’t have the right type of coverage.

Not sure if you’re totally covered? Since I am a huge Dave Ramsey fan, I always recommend his Endorsed Local Providers (ELPs), who are insurance professionals in each area of the US who are handpicked by Dave because they are the leaders in their field in that region. Not only will they give you confidence that you have the correct coverage, but a lot of times they’re able to save you a lot of money too. And since it's free to have your policies reviewed to see if they can get your better coverage or a better rate, it never hurts to have them look over your policies every one in a while.

5. Have a Plan B

The first time Donnie was laid off, we kind of saw it coming from afar. This allowed him to start getting his resume out to different places even before we got the official word, and thankfully, he had a new job lined up not long after being let go from his old one. This second time was different. We knew that the oil and gas industry was in a slump but always believed that his company was secure, then all of the sudden within a week he was done. This time, this blog served as our plan B, and we are so grateful for it (and for you)!

No matter how secure a job feels, it’s always a good idea to take some time to formulate a plan for what you would do if it were suddenly taken away. Having an updated resume ready to go, making and maintaining connections with people across your particular industry, and keeping an eye on current job openings in your field are all helpful ways to prepare.

 

The last thing I want to do in this post is make people fearful. In fact, I hope this post and our story helps people realize that even in the midst of layoffs, all is not lost. And even more than that, there are things you can be doing today to protect yourself in case that type of thing ever does happen. (And if it doesn’t, following these steps will put you in a better financial position anyway, so it really is a win-win!)

Sometimes money stuff is hard. Sometimes saving is hard. And sometimes life is really, really hard. But if we make smart decisions and are prepared, we will be thanking ourselves when the tough stuff happens. Whatever point you’re at today, I encourage you to take the next step. Start that emergency fund. Pay off that debt. Talk to one of Dave’s ELPs. I guarantee that in the long run, you will be so glad you did!

A huge thanks to Dave Ramsey's ELP program for sponsoring this post! For more information, see my disclosures here.