Before I lost my job I was, like many in the U.S., living paycheck to paycheck.
Thank goodness for an overdraft, which we used quite a bit.
I made just enough to not have to be very strict with my finances, even though we had hardly any savings to show for it.
It was kind of a sloppy way of managing finances.
Then, I lost my job.
Managing finances was different. What I learned was that if you make gazillions, you don’t have to think about it. If you make NOTHING, you don’t have to think about it (because there are no decisions to make about where to send the extra… there is never extra nothing :p).
We still had some serious expenses.
While I was unemployed my wife had a baby, and then a surgery. In the past we would do what our insurance company told us to do. But without insurance, it is different. What we learned was we could negotiate with the hospital and pay 50% LESS than before (as long as we paid the 50% in cash, before we left). Did you know you could save thousands on a hospital bill? We never cared to know, but once our finances changed, we CARED!
Here’s another thing I learned. After my business started making some money I decided to do something I had always wanted to do: I paid $400 extra on my mortgage. I thought that $400 would pay down principal, but apparently I did it wrong, and they only applied it to interest. I felt cheated. I spent time on the phone with the mortgage company and learned there is a special address to send additional payments to. I have since sent additional payments there, and am seeing my overall amount owed go down. I learned that an extra payment isn’t really an extra payment unless you do it right (which means pick up the phone, call them, ask them how to “do it right.”) That was a few years ago and I’ll still jaded from them stealing my $400 and applying it to the wrong place!!
Recently, I’ve started to put 10% of my earnings into a special savings account. For a long time I haven’t felt like I had the money to do this… but what I learned is that I do have the money to do this. It’s better to save a bit and live within the rest than it is to continue to live “paycheck to paycheck” and never “get ahead.” It has taken discipline to save the 10% but it has been rewarding to see the savings grow over the last few months.
For too long my finances have just kind of happened, but I’ve decided to take charge of them and be much more intentional about what I’m doing.
I remember someone at a job club a few years ago saying that if we were more careful with how we spent money we would not be in so much pain when we lost our jobs.
It’s a hard truth to swallow, but it’s true.