We had our taxes prepared this Saturday. This was the first year that we were both collecting unemployment for the entire year (and can I say I hope the last!). When our accountant was entering in our income information, we realized we made 47% less in 2011 than we had in 2010. That is a huge difference when you consider both Tom and I worked full time in decent paying jobs that we had both been at for over 10 years each.
But, with that realization that our income was, well pretty sad, I also realized that we deserved a bit of a pat on the back for 2011! You see, even with making almost half of what we had been used to, we did well! We have a mortgage on a house we bought in 2005 (so you know it is high), 2 car payments, and all those other everyday bills. And we paid them, on time, every single month last year!
How were we able to live, and live comfortably I might add, on such a low yearly income? Well, that deserves a multi-level answer and it starts with the time before we lost our jobs.
You see, when we worked, we were adamant about adding something to our emergency account every single week! Some weeks it was an entire commission check of mine, which could have been as high as $800. And some weeks it was as little as $10. But every week, something was deposited. And that account was at a bank that had just one branch and was not easy to access. Yes, we have a debit and checkbook for that account- but here is the trick, we did not carry those with us. We had setbacks, where large withdrawls needed to be done. A hot water heater, vet bills, etc. But, then, that is the purpose of an emergency account.
At one point we had saved over $20K. People thought we were nuts! I used coupons copiously. I bought on clearance. I shopped at thrift stores. I bought gifts on clearance all year, so we never put Christmas on a credit card. We bought in bulk and stockpiled. And people looked at us as if we were crazy.
Well, when we lost our jobs within two months of each other, I knew we were not crazy! We were smart. Have we dipped into those savings accounts? Oh yes we have! Have we drained them? Nope and we are adding more as often as we can.
Being without our work income was a culture shock only in the sense that I have worked since I was 14 and never went without a job. My husband was a very hard worker, who at times, would hold two or three jobs! So, that part was hard! I am fortunate to be back in school. It is hard but so rewarding.
But our lifestyle has not changed. We still try to live well beneath our means. Is it harder? Yes! Do we lack anything? No, I would say no we do not (well, there is that whole job thing, we would really like one or two of those).
So, the number one reason that we were able to survive on so much less, would be that Emergency Fund! If you do not have one, I urge you to start one. Even if all you can spare is $10 a month. That is $120 saved at the end of the year. Add in that jar of spare change. Cash it in and add it straight to the EF! Any small amounts that are unexpected, add those in. Once you see the amount growing, it makes it easier to commit more into the account.
I will add more ideas on further posts. I didn’t want to make this post too long to read.
If you have ideas, please share! I would love to read them.
Do you also have an Emergency Fund? How do YOU handle it?
PDF 
