By Terri Heinen
NFCC Certified Financial Professional
The Village Financial Resource Center
Two weeks ago we were notified that my husband’s employer, a large printing company , was going to close the local plant in 60 days. 280 people will be out of work. My husband started at this company 31 years ago, right after graduating from high school, with plans of saving money for college. He enjoyed what he was doing, the pay was decent and he was being promoted on a regular basis so he never took the time to go to any type of post-secondary educational program.
Was the closing a shock? Not really….printing is a dying industry. But we hoped he could maintain his job until our children were through college. This company has been through numerous buyouts, mergers and a Chapter 11 bankruptcy. We have been working hard to structure our personal finances over the years in such a way that we would not lose our house if he lost his job, we have the recommended 3 to 6 months of living expenses in a savings account and no credit card debt.
So we have “prepared” for this day…..yet, to have the major breadwinner in the family lose the income source our family has relied on for 30 years is still SCARY. The “what-if’s” play out in my mind: What if comparable employment is not found in a reasonable time frame? Is it realistic to expect this level of employment without a college education? Health insurance premiums can become major expenses depending on the cost of family coverage – how will this impact the household finances? We have two sons in college – will we be able to honor our offer to help them with college expenses?
I find my anxiety levels rising and falling like a roller coaster, in part because of what I see as a financial counselor. I meet with individuals on a regular basis that have been seeking employment for an extended period of time without any luck. Many of these individuals hold college degrees. I also see folks that have exhausted all funds from 401k plans – some substantial amounts – to try and stay current on debt obligations once their income no longer supports their lifestyles. I work with seniors that are struggling to pay for basic needs because they used retirement funds to overcome a hardship. Some were self-created hardships and some were situational.
So the advice I give to others, I now need to apply to my own situation. If you’re dealing with the loss of a job, these tips could apply to you, as well:
- Change spending habits the day you learn of the change in employment status – too many times I’ve seen folks that assumed they would find employment before unemployment benefits ran out and they waited too long to adjust spending. This is the perfect time to closely evaluate where we spend our money, what is necessary, what are we locked into and what is fluff. We started eliminating fluff and looking for cheaper alternatives to some of our “needs.” (It’s amazing what we spend on technology between cell phones, TV and internet – and our parents used to complain about long distance phone bills that were more than $50! Today families are spending anywhere from $50 to $500 plus on these services.) This is an area where my husband and I differ on the importance level that some of these “wants” hold in our everyday lives. It can be a challenge compromising on what we can temporarily give up while we prepare for a potential reduction in income.
- In most cases, as counselors, we do not recommend you rob your future (retirement funds) to sustain material possessions today – don’t be afraid to sell the boat, the camper or even the house if need be. These items can be replaced when your situation improves. Or look for ways to make money with these assets by renting them out (will want to visit with your insurance agent and you will most likely have an increase in your insurance premium –weigh the benefits against the cost). Apartment living is generally cheaper than home ownership, even if rent is similar to a mortgage payment. Another benefit to apartment living is lower utility expenses and no property maintenance or repairs to fit into a budget.
- Actively look for work and use the professional services available at your local unemployment agency. In my husband’s situation, he has never had to prepare a resume or interview for a position outside his current place of employment. He is taking advantage of the trainings he has been offered.
- Apply with various temporary employment agencies – especially as your unemployment benefits are dwindling. Many times you can be placed in long-term positions that can help make ends meet, even if the position is not paying you at a level of your previous employment, you are still working, which is good for your physical and mental health.
- Get a part-time job if you run short on income to cover all expenses – this can apply to any contributing member of the household. You may feel tired after working more hours but the extra money may relieve some of the stress that accompanies a cash flow deficit.
I let the fear of the unknown get the best of me at times, but today is a low-level anxiety day. It helps to take an active role in making changes to the spending and planning for a reduced income level. I’d rather be over-prepared than under-prepared. It also gives us a new adventure, and I will have some additional personal experiences in my tool box when meeting with clients.
Terri Heinen
Certified Financial Professional
Village Financial Resource Center
Terri Heinen is a NFCC certified financial professional with The Village Financial Resource Center.
If you are facing financial difficulties or just have money-related questions, The Village Financial Resource Center is here to help. Call us at (800) 450-4019 or visit helpwithmoney.org.
