With the idea that more and more are facing financial hardships I'm ready to introduce the material from the 'Facing Financial Hardships' class that I wrote and taught online a while back.
Here's the first entry ...
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Facing Financial Hardships
Day 1
by Patsy Norwood
(c) by patsy norwood All rights reserved!
In order to get the most benefit from this class I want you
to mentally place yourself in this situation during this scenario. I want you
to feel all the things you would feel and find ways to work through this
situation as if you were living it in real life. Let's get started ...
You or your husband, whoever has the bigger source of
income, goes into work on a beautiful Monday morning and are directed to go to
a specific area for an emergency meeting as soon as you or he arrives. Once
there, you, see several other employees as well. You look around, greet your
fellow employees and wait for what you assume will be the usual ‘staff’
meeting. Only it’s not, you’re being given your ‘pink slips!’ The company is
closing its doors and you are now unemployed. You are in shock; you didn’t see
this coming. After hearing some talk about how sorry the company was to have to
do this and mention of being able to draw unemployment insurance you are wished
well and told to go clean out your work area and leave the premises.
For those whose income falls under the heading of retirement
funds, social security funds, disability funds, etc … you have just lost your
largest amount, you will no longer be receiving it. Your pink slip came in the
form of a letter informing you that your ‘check’ disbursement is being
suspended until further notice.
The bottom line is this; regardless of where your income
comes from, for the purpose of this class, you have lost your largest source of
income. What is this going to mean to your household?
Has your household income been cut in half, more than half
or is your household without income?
Personal note: when something similar to this happened to us
some 30 years ago, we became a zero-income household except for unemployment
insurance. We lost our health insurance, dental insurance and our income all in
one fell swoop without any warning. We had 3 children, a mortgage, 2 vehicle
payments and other financial obligations, it was tough, but we survived! My
husband had a good job and made a good salary, we were living the American
dream until it all came crashing down. And boy, oh, boy did we learn a lot
while picking up the pieces that will be the basis for this class.
I hope through this class and discussion that we can form a
plan of action should any of us be experiencing a reduction in income now or
anticipate one of any kind in the future.
We might not be able to prevent it, but there are things we
can do to make it easier to get through!
Here are some ideas, what can you add to the list:
Take an honest look at where you are financially, what you
owe and what your expenses are … every single one of your expenditures. Write them down on paper.
Develop a survival budget that includes shelter, utilities,
food and transportation. Make sure these
are taken care of first, then allocate what you have left to the rest of your
bills, contact your creditors and explain the situation. Don’t put this off until it’s too late.
Call the mortgage company straight away and explain the
situation. Don’t bury your head in the
sand, miss too many payments or let it go too far. There are more than likely options available
to help you through this lean time.
Keep detailed records of conversations you have with your
creditors, who you talked to, the time you talked to them and what you were
told.
Cut your expenses to bare bones.
Keep detailed records of where your money is going. Track every penny. It’s vital that you know where your money is
going, it also is a good way to find areas that can be further cut.
Try to develop multiple income streams regardless of how
small they are. Look for part time work,
develop side jobs. Don’t down play your skills - while you may not earn a huge amount or a steady income using them, even a small amount is enough to help keep the wolf from the door. Some examples are mowing
yards, handyman, babysitting, sewing, dog sitting, dog walking, growing a
garden and selling excess produce, blogging, Youtube, etc. Never be so full of yourself that you won't
take a menial labor job to provide money to the household. Even if it means
going out to shovel snow or rake leaves in the neighborhood, it is still income.
Grow as much of your own food as you can and stretch what you have by not being wasteful.
Utilize every form of help available such as food banks,
food stamps, food pantries, help with power bills, etc.
This is the kind of thing these programs are for.
Utilize coupons if it’s something you use.
Sell things you have.
Turn everything you don’t use or that is not applicable to the season of
life you’re in into cash.
Barter when you can.
Glean when you get the opportunity.
Stay home as much as possible; be wise and prudent with the
amount of time you spend on the go.
Patsi
Sharing 42 years' experience of frugal, prudent living and pantry building
My second blog: From This Heart of Mine
She looketh well to the ways of her household … Proverbs 31:27
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It is heartbreaking that families cannot visit loved ones in the hospital. I am so, so sorry. I'm continuing to pray.
ReplyDeleteWe have been through that scenario so many times with my husband having worked in IT. His job went overseas many times and a few times he had to train his replacement. But, our God threw open the windows of heaven poured out a blessing every time. At this point in time we are 100 percent debt free and with only the two of us and no meds to pay for we could live for a long time on our savings.
Thank you for doing this series. It will be a blessing to many.
Lana, thank you for your continued prayers. Your post is so encouraging, we're on a journey to get as close to where you are financially as we can. Your post shows it's possible! Thank you for sharing!
DeletePraying for you and your mom. I am sorry to hear that you cannot visit her at this time. I hope she is well enough that you are able to talk to her on the phone.
ReplyDeleteHubby is the bread winner so in this situation we will pretend he lost his job. I work part time(about 16 hours) helping an elderly man. I have been approached several times from other people looking for my services so I know I could get many more hours. Hubby used to work on the side for himself on weekends so he could easily go back to that. My son(21) works full time and still lives at home. We do not charge him for food or rent but we could start doing that. He is saving up money to buy a condo. My youngest also works part time while in college. We cover everything for her except her phone. She would have to start paying for her own stuff.
We follow Dave Ramsey. We are in Baby steps 4 and 5. The only debt we have is our mortgage. We have a 6 month emergency fund to cover all of our expenses. We also have a college fund set up for our youngest to get through school debt free. We also have a few other savings accounts suck as car fund and travel fund. We make a budget every month and know where our money goes. I would cut all of our extras such as eating out, Netflix, saving for vacations and cars. I have made up a budget like this before and we would be good with no income with our savings for at least 9 months. Add in what we already make and unemployment and we would be OK for at least a year. I do also have a well stocked pantry so I could drastically cut our food budget. Stay healthy.
Making Cents Of It All, you are in good shape and have a great backup plan! Way to work the Dave Ramsey method!
DeleteI'm very sorry your mother is so sick and during such a difficult time for the health care system. I hope she improves quickly and can return home soon. I can so relate to this, though. During the H1N1 outbreak, I was pregnant. The hospitals at one point were not even allowing the soon-to-be dads into the hospital when their significant others were giving birth! I was so lucky that when I did give birth, they had eased up those restrictions a bit. Shortly after, they had to impliment the restrictions again. So I'm very grateful my husband was able to be there with me.
ReplyDeleteI'm really looking forward to reading this series, Patsy. Although I know we are in a much better place than some, I am still worried about how all this will impact our finances over the next year or two. I will be gleaning as much information and ideas that I can from each and every lessons you post!
Rhonda, I understand why the hospital restrictions are necessary, but following them is hard. I agree with you, I think this virus could have repercussions that reach into the next couple of years.
DeleteVery timely thread. It is not just losing a job that can decrease income....as the Baby Boomers retire in record numbers their income will go down. The primary bread winner in my house will take a 50% hit when he retires. (We will be ok. He was smart about paying down debt knowing retirement was coming) I am taking notes as I read your posts....just never know when I will need to refer to them. Thank you, Patsy.
ReplyDeleteCass, we are trying to be debt free by the time we retire for the same reason.
DeleteI am sorry that your mom is sick, and that she can't have visitors. Would it be possible for her to have a phone or tablet so she can chat with you all?
ReplyDeleteThank you for sharing your series with us. I know it will be a blessing to many.
Kathy, thank you. She has the hospital phone in her room that she keeps in her bed. We are able to talk with her when she is able, she is has no idea what to do or how to operate a tablet.
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