Surviving Unemployment: Seven Money Lessons I Learned

Like most people, I didn’t learn much about managing my finances while growing up. My parents did their best to teach me to save money and to stay away from debt. But they didn’t talk about investments, emergency funds, or buying real estate.

To be honest, I learned the most during a very challenging time in my adult life, the 2008 recession. I want to share these seven money lessons I learned while surviving unemployment. Hopefully, you can be better prepared for difficult times.

1. Never Take Your Job For Granted

Before the financial crisis, I used to be pretty naive. I believed that as long as we wanted to work, my husband and I would always have jobs. In my mind, the unemployed were people who, to say it nicely, lacked the motivation to get a job.

But then my husband lost his job as a program manager at a manufacturing plant in Phoenix, Arizona. “We are moving your job to Mexico,” he was told. Businesses were letting people go left and right. We were suddenly faced with the reality that I never imagined possible; living on one income, mine, as we still had to pay for our two-income lifestyle.

We had a mortgage, credit card debt, two car payments, and a student loan. We were “normal” by any American standards, except we were now dealing with the ripple effects of a job loss. This time in our lives taught me never to take my job for granted. It could have been me getting laid off.

2. Triple Your Emergency Savings Fund

Quickly it became clear that living on one income and surviving unemployment would require some serious lifestyle adjustments. Although we cut down many expenses, the money coming in was just not enough to make ends meet. Our checking account balance kept shrinking every month, followed by the savings account. Whatever we had saved for emergencies was evidently not enough to face the 2008 Recession.

I thought we needed to start using credit cards to supplement our income and cover basic needs. Then, something big happened. After many resumes sent, job interviews conducted, and an eternity waiting for things to get better, my husband finally got a job. Yay! As I write this, I still have vivid memories of the relief that I felt when he told me the news.

This was a great lesson, and I cannot stress it enough. You need to put enough money away to cover at least six months of expenses. However, most Americans don’t have $1,000 today to cover an emergency, much less to face a job loss.

Whatever you have today in your emergency savings account is most likely not enough. At least not to get you through a period of unemployment. Triple it! In difficult times you need peace of mind to turn your situation around. And when you are worried about how you are going to put food on the table, it is much harder to interview for new jobs with confidence.

3. Get Rid of Credit Cards

During this rough patch, I thought that it was a blessing having a credit card, just in case we needed to cover our basic needs. Then, one afternoon, I opened a letter from our credit card company to discover that our interest rate was being increased.

My stomach sunk.

This must be a mistake, I thought! We hadn’t missed a single payment in the history of the account. Also, we were making monthly payments on time, and even paying a little extra every month. And then, it hit me. They were increasing our interest rate because they were not making much money out of our account.

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This is a precious lesson. Credit card companies let you borrow money because they make money off the interest they charge on your balance. It is my belief that this credit card company was hitting us with a new higher interest rate of 15 percent on future purchases because our balance wasn’t growing!

I even called them to complain but just wasted my time and got angry. What kind of company increases your interest rate when you are current on payments and facing a job loss? That day, I vowed to pay that stinking card off and never deal with credit card companies again.

Credit Cards Are Not The Answer To Surviving Unemployment

Since then, I haven’t used a credit card. The most valuable lesson I learned was that I shouldn’t rely on credit cards to deal with an emergency. That is actually the worst time to get in debt when you don’t have any money. Instead, I challenge you to get on a budget. Once you get your spending under control you will be able to get out of debt. And when you don’t spend all your money on payments, you can actually save it. Your goal should be to put aside at least six months of expenses.

If you get rid of your credit cards, you will have no option but to save money for an emergency. Can’t figure out a way to save money? That means that you need to live on a budget. That’s the only way to control your spending.

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4. Be Grateful in Every Situation

Let’s be honest, our journey surviving unemployment was long, depressing, and stressful. But in hindsight, it was the best thing that could ever happen to us. I know that now, ten years later, but I couldn’t say or see that when we were in the hole.

Then, I didn’t know much about emergency funds, saving money, or investing for retirement. The loss of my husband’s job and the financial and personal struggles that it triggered opened my eyes to the urgent need of getting our act together!

Today, I am grateful for the struggle. Surviving that period of unemployment without getting behind on payments, getting into more debt, or asking family members for money was quite an achievement. And most importantly, that time taught me how I never wanted to live again, in fear of not having enough money to provide for my family.

Always be grateful in any situation, God is trying to teach you a good lesson.

5. Know That The Struggle Of Surviving Unemployment Is Temporary

We suffered because we didn’t know how to manage our personal finances, and you know what, we earned it. We lived as everybody else did, relying on credit cards, car loans, mortgages, and student loans to live our “ordinary” life. And although back then it seemed like there was no end to our self-made misery, eventually it came to an end.

I wish somebody had told me this then, so I am going to say it for you: The struggle is temporary. If you are going through a hard financial situation, know this, it will pass. And, if you are ready to learn your lesson, whatever you are struggling with now will become an opportunity to turn the page and start transforming your finances.

Turn Your Life Around

Fortunately for us, we survived unemployment and came out of the Recession wiser and stronger. Believe it or not, we managed to live on one income and a small amount on unemployment benefits for a couple of years. In the meantime, we paid off our two car loans and credit card debt. And then, when my husband went back to work, we kept the same standard of living and used his paycheck to replenish our savings.

You will make it to the other side, but not without sacrifice. Just remember every single day, the struggle is temporary.

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6. Commit to Living Debt-Free

Changing your financial reality for the better is very possible, but you must acknowledge your mistakes, take responsibility, and commit to living debt-free. Do you have a car payment? Do you use credit cards to go out to eat or on vacation? Are you house poor?

It takes humility to admit it when we are living beyond our means. We look at our neighbors and friends, and they seem to have all the things. So, little by little, we go and buy them too, and tie a rope around our necks along the journey. Debt will eventually kill you, I mean it figuratively and literally.

You can have a beautiful life if you develop the discipline and maturity to save up and pay cash for most of what you want. Why? Because although it takes longer, by paying for everything outright, you remove the risk of a loss if your financial situation changes. And we all know that change is constant.

I don’t want you to experience the pain of financial struggle. Instead, I want you to have a fulfilling, happy, and comfortable lifestyle, and you can do it debt-free.

7. Learn From Your Mistakes

Going through a layoff when you are not prepared, can be a devastating experience. If we faced another job loss today, our experience would be much different. The emergency fund we have built would take care of our family for several months without having to relive the stress, trauma, and anxiety of 2008.

We have learned from our mistakes and realize that it is possible to live and have the things we want without getting into debt. Now, we are committed to paying cash for anything we buy, from groceries to vacations, to cars. So, make a list of the money mistakes you have made, be thankful, and learn from them.

In Conclusion: Surviving Unemployment

The 2008 U.S Recession and our time surviving unemployment taught me these seven tough but valuable money lessons:

1. Never take your job for granted
2. Triple your emergency savings fund
3. Get rid of credit cards
4. Be grateful in every situation
5. Know that the struggle is temporary
6. Commit to living debt-free
7. Learn from your mistakes

Today our family is in a much better situation because of the hole we got into ten years ago. You don’t need to wait for a layoff or a financial crisis to slap you in the face and teach you life’s most valuable money lessons. Learn from ours! And if you are going through hard times, I encourage you to take ownership of your future and work hard to turn your situation around. You can too make the decision today to become smarter with your money!

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Surviving Unemployment: Seven Money Lessons I Learned