Life has a way of laughing at the best laid plans.
I have worked so hard to get my family out of debt over the last couple of years. We downsized and my husband went back to work after being a stay at home dad. As a result, we were able to blow through my student loans ($208k in 17 months!).
Finally, I felt empowered to gain work/life balance, cut back my work hours to 0.8 FTE, and spend more time with my kiddos.
Dun, Dun, Dun...
And then, my husband got laid off. His company got acquired and there were major layoffs across the board.
And, this happened the week before I started my reduced schedule!
Good one, life.
Of course, my initial knee jerk reaction was to freak out! Our income was about to drop by a third!!
So, what did I do?
Well first, I leaned on my amazing friends and tried to support my hubby.
And then, I called an emergency budget date.
The Emergency Budget Date
Honestly, when we first started, I didn’t look forward to budget dates with my hubby.
Budget dates are where we sit down side by side on our computers and go through our spending.
We go over the last month and then plan out the next month. We also update the totals on our savings account and review our net worth.
Sounds pretty dry, right?
Well honestly, initially, I had to really push my hubby to do this with me. There was a lot of foot dragging and bourbon involved.
But, on this budget date, he said out of the blue, “I really like that we do this.”
Can you believe it? I sure as heck couldn’t.
Why Frugality is a Life Superpower
Here’s what went down on that budget date…
Josh and I sat down and looked at our past month’s spending. We had spent what felt like a lot on Halloween activities and decorations. We had gone out to eat more than we usually do.
Also, we are playing catch-up on maxing out the retirement accounts and HSA the second half of the year since all our savings went to student loans before, so take home pay is a little less.
But, because we live so below our means, have very little debt, are so optimized, and it was a 5 paycheck month, we still saved over $10k last month!
Amidst the anxiety of being laid off and the unknown, we found solace in the numbers. We patted ourselves on the back.
Then, we projected out what our monthly net would look like with the same amount of spending but with ⅓ of the income. To my surprise, we could still be saving 1-2k a month.
And bam. There went the money anxiety. Instant peace.
We won’t need to touch our emergency fund (provided life has no more lemons in store for us- don’t get any ideas life…).
We would be fine.
More than fine. We could still max out retirement, our Health savings account and continue to save for the kid’s college.
Josh can take his time finding a new job that will truly make him happy. He doesn’t have to jump at the next thing in desperation. I can continue to seek out my best work/life balance.
That’s the power of living below our means and keeping a budget.
Budgeting Helps Ease My Anxiety
Because we track our spending, we have 2 years worth of data on exactly how much we spend and where we can cut back. We know exactly how much money we need to live our lives.
So when faced with a drastic reduction in our income, we can quickly assess our future spending and decide if and how we need to adjust.
Thanks to frugality, we have a big cushion built in to soften life’s blows and curve balls. So, we don’t have to adjust our daily lives at all.
This is real life, our real story. Not fast talking or number bending.
Frugality is a life superpower! Money consciousness and intentional spending give us the freedom to continue to pursue our ideal lives, amidst life’s turmoil. This is why I believe in this stuff and why I try so hard to spread the word!
The wisdom is old but remains true…Live below your means and your life will be rich with opportunity.
Also, if anyone is looking for a project manager, I know a really good one!
Stay frugal,
Disha
Standard Disclaimer: Not meant as individualized financial or medical advice. Photo from unsplash.com