For many reasons, I took a huge pay cut when I left my professional job two years ago. I went from a six figure salary to a $0 salary.
It happened just before my marriage ended, and there was no dollar settlement in that case.
So I was left without an income, a little bit of savings, and three kids (shared, but at first the baby was still with me full time).
So it wasn’t like I could just go get a job, as my schedule was all over the place.
Further, I didn’t want to get a job, at least, not in doing what I was doing before. Not while my kids were small. I was still nursing, and my kids had just gone through a divorce and a move. The last thing I wanted to do was to throw a new job into the mix.
Instead, I decided to take my expenses down as far as I could possibly take them, and see how long I could draw out my savings.
I also started working on some side hustles on the internet (blogging, youtube, affiliate marketing, courses, etc) but none of that really took off for a long time.
Saving after losing a job
I’m not a professional cost cutter. In general, I am not a huge shopper either, but I wanted to take down my spending as far as I could take it. Here’s a summary of the changes I made.
- Cut restaurant, eating out, drinking out budget. Absolutely no eating out whatsoever. Since I wasn’t even letting myself have a coffee or a drink, for the most part I just declined all social invitations to eat or drink with anyone. I replaced this was having small dinners at home, or meeting at other people’s houses.
- Cut out traveling budget. Plane tickets are obvious huge expenses, as well as other costs of traveling, such as gas, food, entertainment. Not only did I cut out big trips, but I also cut out little trips, such as drives to the mountains, to Portland, to the coast, etc. I didn’t want to spend money on the gas or food or entertainment. I replaced this was adventures in our small hometown, exploring local parks, bike riding, fun unusual twists on average days.
Cutting back on groceries
- Cut the grocery budget down by 75%. I used to spend so much money at the grocery store. I didn’t bother looking at prices, and I didn’t shop deals or coupons. Now, when I go to the grocery store, for the most part, I ONLY shop coupons or deals. This means I probably go to the grocery store more, to capture good prices on items that are only available for a day. This also means that I tend to prepare meals based upon what was on sale, versus what I wanted to make to start.
This follows the grocery budget. I was able to cut this down so significantly by cutting out a few main items: meat, alcohol, prepared foods (in store, frozen, boxed).
When I go into the store, I start in the produce section, and I buy fresh apples, bananas, grapes (if on sale), berries (if on sale), oranges/cuties, carrots, celery, cuckes, peppers, potatoes, etc, etc. If I splurge anywhere in the store, it is on making sure that there is some fresh produce in the fridge all the time to feed to my children.
Then I head to the meat section to look for good deals on meat. I’m not super picky. If there is a screaming deal, I’ll buy something, and make it. I can sometimes find chicken at super cheap, sometimes it is ground beef, sometimes it is pork ribs. Since I go into the store so much, I am now familiar with the price of everything and what price is the lowest that the store is going to go on a particular item.
I’ll grab beans, milk, eggs, and bread.
Once I have fresh stuff and meat (if it’s on sale), I get items the kids like/need, like fixings for school lunch and snacks (bread, peanut butter, jam, string cheese, dried fruit).
I don’t spend a lot of money on treat items, such as chips, cookies, ice cream, juice, bagged salads, fruit trays.
Cooking at home: bulk meals and using everything
Now that I don’t have as much money as before, I cook things with the idea that it will last more than one meal. I’ll use the slow cooker to make a soup, for example, and try to eat that for more than one meal. I don’t think I have to explain this, and I am certain you can look for bulk recipes out on the internet.
Another thing though that I am better at than I was before is using everything, aka, making less waste. I am particular bad about eating leftovers. Or at least, I was.
I just really struggled to eat a meal more than once, like the same dinner two days in a row, or eating that dinner food for lunch the next day. Inevitably, I’d end up throwing away a lot of food that could have been eaten, in favor of eating out or making something else that appealed to me.
Making sure to eat as much as possible of a previous bulk meal before moving on to a new one has had a pretty significant impact on my grocery budget, as I just need to cook a lot less food overall.
Cutting back on home utilities/projects
There are things that you can’t avoid paying, such as water, heat, electricity, sewer, garbage, etc. I looked at what I had as far as utility bills, and if it wasn’t necessary, I got rid of it.
As such, I have internet, but I don’t have cable television, or any sort of DirectTV. I don’t actually have a television right now, though I do have Netflix that I can watch on my computer.
I decided to let my grass go brown over the summer instead of spending hundreds over the summer watering it.
I am conscious about using lights and electricity and being wasteful about it.
I decided to hold off on major not emergency/necessary home improvement/repairs. I do all of my own yard maintenance, and handle whatever home stuff I can (clearing plugged sink, for example).
When you own a home, there’s a certain amount of spending you can’t avoid. But I try to spend only what is necessary for the time being, knowing that in a few year’s time I’ll be back on my feet and earning a really good wage.
Saying no to frivolous spending
I just don’t spend money on stuff I don’t need RIGHT NOW for my family and my life.
I don’t shop for clothes. I just made due with what I have. Period.
I don’t shop to improve my home space (decor, for example). My house and yard is as good as it is going to be for now. I am working on projects around the house with materials that I have gotten for free off of neighbors or managed to wrangle through the internet.
I don’t spend money on entertainment (concerts, wine tasting, shopping for fun, etc). Yes, that makes me duller than dull lately, but in my mind, it is worth it because my financial discipline is what allows me to stay home with my kids as much as I do.
When your family is truly broke, there is no “I needed coffee” or “I don’t know why I bought it” sort of spending.
If it isn’t necessary for life (keeping your roof over your head, keeping the water and lights on, keeping the kids alive), then don’t buy it. And there are no excuses for it.
Shopping for deals/steals/freebies
When I need clothing for the kids, the first place I check is with my mom friends who have kids who are growing up just ahead of mine to see if they have anything to get rid of, or want to trade.
The next place is check is the local city buy-nothing sites, which can really be a gold mine for kid clothing and toys.
When I do need something for the house, I always check the local facebook community pages and then the second hand stores. Not always, but many times, I can find what I am looking for at a fraction of the cost brand new (I got a mixer that way a few months ago…for $2).
Having savings helped me
I had some savings built up, so I could afford to stay at home for a while, living as cheap as possible. Obviously though, this isn’t a long term solution, as I am spending more money (even as frugal as I am) than I am bring in.
(well, I think that is changing, but I haven’t done the math in a while)
But for the average family, when the primary bread winner loses their job, survival isn’t just about cutting out cable or downgrading the cell phone plan.
It is about budgeting ahead to see how long you can make it, and then do everything possible to start generating income to get positive cash flow again.
Overall, if you find yourself in a place where there is no income, and you need to dramatically reduce your expenses, here are the steps (from my own experience):
- Write down every single expense, every bill, every charge, interest, everything, including the ones that only hit once every six months or once a year
- Go through and figure out what is necessary and what is not.
- Cut out what is not necessary.
- Look at what is necessary, and see if there is a way to make it cheaper. Some plans can be downgraded. Others can be reduced if you call and threaten to cancel (like cable or internet). Sometimes you can reduce how much you use it to make it cheaper (like water).
- Make your budget. Then see if you can make those numbers smaller, again.
Once you have your budget, and the bare minimum you need to get by in the month, you start hunting around for ways to make that happen.
This might sound drastic, but you should be looking at this in a drastic way, if you are truly in the place where you or your family is out of a job.
I told someone recently how much money I spent in a given month, and I’m not sure if the person actually believed me. Most people (Americans anyway) spend a lot of money each month, sometimes without any realistic idea of how much they are actually spending.
Honestly, before I didn’t have a job anymore, I was that way. I was SURE that my grocery budget for the month was between $650-$800 a month (including restaurants) but after doing an audit, I was horrified to find out that the family was spending more than $2000/month on food, drinks, Costco, groceries, what have you.
Seriously, I can now easily support myself and my entire family on the money that I used to spend on groceries and eating out at restaurants.
Losing a job/recalibrating can be a good thing
If you can find the silver lining in having to figure out how to make ends meet after losing a job, it is that you might make some long lasting budgeting changes.
When I stopped working, I realized how much money I used to waste.
I was going to work to earn that money, leaving my house, my kids, all the things I loved.
And for what? Money that I wasted on nothing important.
Now that I have reduced my spending, I don’t have to make as much money as I used to, in order to support my family and my lifestyle.
I have a smaller house, fewer things, and I do a lot less of trying to keep up with the Joneses.
But I also spend WAY more time with my children, even though I share then with their dad now.
If I was working full time like before, I would not see them much at all, I would not be able to volunteer in their classrooms, I would not be able to chill out on a weekday and head to the library.
I’d be working to make credit card payments, for stuff that I bought that I didn’t yet realize that I didn’t need.
It’s been a painful and stressful few years. But now that I am pretty much through the toughest time, I can find time to be glad for it, because my life is different now. And I won’t go back to the golden handcuffs.
Emily Anderson is a mother of three children, all under the age of 10. Located in the Pacific Northwest of the US, Emily is a mom and part-time blogger, jumping in front of the computer when the kids are sleeping. She started this blog in April of 2019 and is proud that the blog is now paying for itself. If you want to know about her journey as a blogger, check out out her personal digital journal or her post about failing her way to blogging success.