[Josh's note: This is Part 3 of a 3-part series. Part 1 is here and Part 2 is here.]

Slow and Steady Keeps Me Sane

Once I finished my mental list, I had to start thinking about what I would do with all my new free time.  Obviously, I would need to continue looking for work, and maybe trying to find ways to make money in the interim.  I was actually kind of excited about the prospect of having 40+ hours freed up every week and I resolved to use them wisely.

I decided that the first thing I needed to do was settle into a routine. For me, routines keep me sane, and I knew unemployment would be miserable if I just sort of meandered through it, wondering what would happen next. I get bored easily, and I had to try to prevent boredom from ruining my time off.  So, I started going to Starbucks every morning to read, write, study, listen to music or whatever I needed to get done.  At first, I would buy a drink every time I was in the store, but then I figured out that I could make it myself for about 15% of the cost, so I bought the ingredients and started making my Starbucks drink at home and taking it with me.  It turns out I like my version of the drink better anyway, so I have a better drink and I save a bunch of money every month (I’m embarrassed to even write the amount of money I was spending on Starbucks every month, so I’ll just keep it to myself; suffice it to say it makes me cringe when I realize that my drink used to cost about four bucks every time I got it).

I used my time at Starbucks to keep up with current events (like world news, technological trends, various blogs, etc.), read (I’ve been reading Infinite Jest for several months now – I’m a very slow reader), find new music, keep in touch with friends, look for good job prospects and do school work.  I tried to find ways to feel productive, even if those ways involved checking up on pop-culture or playing Words with Friends on my iPhone.

I also made sure to continue going to the gym regularly.  It’s difficult to explain, but being out of work actually made it more difficult for me to go to the gym consistently even though I had more free time. So I resolved to continue putting in at least four days a week (Monday and Thursday are cardio days, Tuesday and Friday are weights days).

I tried to spend time with friends as much as possible. I have several friends whose work schedules are unusual, so we spent a lot of late nights playing PS3 and goofing off. It was nice to be able to just spend time hanging out and not worrying about getting to sleep so I could get up early for work.  During my time away from work, I realized how important my friends are to me, and I realized that I need to focus on cultivating and building relationships – we only get so many meaningful friendships.

All Good Things Must Come to an End

About six weeks after I was let go, I was asked to interview with my old company… for my old job.  It was awkward.  Apparently my previous co-workers had a lot of nice things to say about me, so I was at the top of the list of candidates for this job. The interview went well and it helped me to keep in touch with some people at the old company.  I never heard back on that interview, but after another six weeks, I was interviewed for another position at the old company.  This time I was offered the job, which I accepted.  In my list of things I did after I was let go, I mentioned that I resolved to leave on good terms – four months later, this decision led directly to a job offer that allowed me to return to work for my old company.  If I had left on bad terms, I would probably still be looking for work with growing anxiety and a shrinking bank account.

While I was enjoying my time off, I was starting to get a little bored. The routine was starting to get old, and I was having a hard time keeping motivated and being productive. I was also running out of cash, so the time was perfect for me to go back to work.  I’m still working on my MBA, and I’ll have to start thinking about what to do with it once I have it pretty soon.  I’m also writing a book, which could open doors to future career opportunities.  But for now, I’m back in the office 8-5 every day, and it’s nice to have a steady routine and a paycheck again.

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[Josh's note: This is Part 2 of a 3-part series. Part 1 is here and Part 3 is here.]

Work the Plan

Since I started paying down the 0% card, I had also started considering what I would need to do if I lost my job. By the time I was let go, I had a very clear plan for cutting expenses, taking advantage of my insurance before it lapsed, and living a leaner financial life.  I’m going to list the pieces of my plan in a bulleted list to make it easy to skim and identify individual items.  This is a long list and some things were trivial while others were crucial.  Here’s what I did the day I got let go:

1. I went to the gym and did an hour of cardio. Normally, I do some combination of reading, watching TV and listening to music while I do cardio.  On this day, I just did cardio and started mentally sorting through my new situation.  I think it was important for me to calmly start analyzing my situation. Even just an hour of clear thinking can help me start thinking straight and avoid doing anything rash.
2. I had to make a decision about whether to keep my gym membership active. After I finished my cardio, I went to the front office and spoke with a sales rep about my situation. My options were to keep the membership going, pause it (meaning I couldn’t go to the gym, but they wouldn’t charge me either) or ask for a sort of temporary free pass to get me by. My membership is $30 a month, and I decided that $30 a month was a good price for unlimited entertainment, keeping in shape and occupying my time.  This is one of the few expenses I kept intact.
3. I went home and called up any charities or non-profits I supported and let them know that I would have to stop supporting them indefinitely.  These were difficult phone calls, but they were necessary – I had to cut monthly expenses immediately, and I had to cut them as much as possible.
4. I called my dentist and scheduled a cleaning and check-up. My insurance coverage would be lapsing at the end of the month (two weeks from when I was let go), and I didn’t know what I would do for coverage after that. I needed to take advantage of my coverage while I had it.  If I hadn’t recently been to the doctor, I would’ve set something up with him as well.  When I went to the dentist, I mentioned my situation and asked for advice on things I might do to prepare in case I was without insurance for an extended period.  They recommended I go ahead and get some fillings done (we’d been “watch”ing them for a while, and rather than risk that they become full-blown cavities while I was without insurance, we went ahead and took care of them).  They also gave me some free samples of stuff (fluoride toothpaste, floss, etc.) to try to help me out.
5. I logged onto my Netflix account and dropped my subscription to the cheapest version that would let me keep free streaming on my TiVo (this saved me $10 a month).
6. I talked to the people who run the place where I get my haircut.  I told them my situation and asked if there was anything we could do to save me some money. They moved me over to a new stylist whose rate was much cheaper than my normal stylist. They said I could stick with the new guy until his rates went up at the end of the year.
7. I made phone calls to my family to let them know what was up.  This might have been the most difficult step, and I procrastinated on it for a while. I was pretty confident I would be ok, but I knew my family would be worried.  Nevertheless, these calls were necessary and ultimately provided a lot of encouragement for me.
8. I contacted my MBA program and let them know I’d lost my job. I asked them if there was anything I should do, needed to know, or should consider going forward. They recommended that I contact Financial Services (to see if anything could be done to help me out financially), and that I consider signing up for a Fall elective. Financial Services was of little help (status quo), but I ended up taking my required week-long elective and got that out of the way early.
9. I joined LinkedIn. I probably should’ve done this a while ago, but now seemed as good a time as any.
10. I contacted a career assistance program we’re offered through my MBA program.  They helped me update and rewrite my resume, and they taught me how to look for jobs, target companies and make meaningful contacts that could potentially lead to future job opportunities.
11. I started contacting friends, family and fellow MBA-ers to see if they knew of any job openings that I might look into.
12. I started looking into unemployment benefits in Florida. It’s pretty easy to Google “unemployment benefits” for your state to find out where to go and what to do. In Florida, FLUIDnow.com is a one-stop shop for all things unemployment.  I waited a bit before doing this because I knew there was a waiting period before I would become eligible to receive benefits, so there was no rush on this one.
13. Now that I had made serious cuts to my spending, I needed to recalculate my monthly expenses. Once I knew how much it would cost me to live each month, I could figure out how many months I had before I went broke.  It turned out that I had a little over six months before my money would run out… barring an unexpected, large expense.
14. I had to decide what to do with my car. I still had eight monthly payments to make, and those payments would constitute a big part of my monthly expenses.  It turned out that it really didn’t matter what I did because I had enough money in the bank to last seven or eight months (including my monthly car payment).  I decided to go ahead and pay the car off because it wouldn’t really impact my ability to survive, I would save a little cash on the final interest payments, and so that if something catastrophic happened, my car couldn’t be repossessed (and I could sell it if necessary – but that would be my choice, not the bank’s).
15. I resolved to leave my company on good terms. When I left my previous job in Dallas, I read an article that said to always leave a job on good terms, and to resist the urge to unload frustrations on the way out the door. The article emphasized that burning bridges is almost always a bad idea, and that we never know where our next job lead might come from.  Often, job leads come from contacts at previous employers, and those leads can be valuable.  This decision – to leave on good terms – would prove to be critical later.

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[Josh's note: This is Part 1 of a 3-part series. Part 2 is here and Part 3 is here.]

After being out of work for almost five months, I’ve finally gotten a job offer. I consider this to be both excellent news and sort of a bummer.  I’ve actually had a great time while I was out of work, and my financial situation is actually better than it was before I was let go.  I’m sure each jobless person’s situation is unique but, maybe in sharing mine, I can help calm the fear of the unknown and the anxiety that some experience when they first lose their jobs.

Preparation: Don’t wait until it’s too late

I started preparing for the possibility of losing my job about a year before I actually lost it.  The economy was tumbling, my company was constantly in flux, and I could sense that my job security was becoming more and more dubious.  I started examining my financial situation and realized that, if I were to lose my job that day, I’d be in real trouble.

First of all, I was spending a lot of money very quickly. It had been several years since I had a real budget, and I was blissfully ignorant of where my money was going. Subsequently, I wasn’t saving money like I used to.  Since I bought my house, I didn’t have the same motivation to save because I didn’t need to come up with a down payment anymore. Instead, I just kind of spent money as I got it.

Because I wasn’t saving money, if I had a big expense “pop up” (tires for my car, a landscaping project at my house, etc.), I would just pay for it with my handy-dandy 0% APR credit card. “It’s free money!”  I had managed to rack up about $10,000 on that card.  Since I was in college, I frequently bounced balances around on 0% cards because it felt good to borrow money interest free.

When I stopped to actually think about how much I’d need to pay each month to pay off the card before the 0% APR period ended, I realized I needed to start spending less and saving more. Immediately.  I toned down my spending on music, food, entertainment, clothes (although if you know me, you know that spending too much money on clothes really isn’t a problem for me) and other non-necessities.

It took me about 11 months, but I finally got the card paid off, and several months before the 0% APR period ended.  And literally the next day, my house had plumbing problems and I put $5,000 right back on the stupid card. C’iest la vie, right?

As I paid down the card, I also started trying to save money. I managed to sock away a little cash so I would have something to work with as an emergency fund. I didn’t get a whole lot of money put away, but I did have some cash in the bank when I was let go, and that cash helped me bridge the gap until unemployment benefits kicked in.

One way I shielded myself from the disaster of losing my job was by paying down debt ahead of time. For a lot of people, it’s too late to do this step. But for most people – like the 90% of Americans who still have jobs, but are likely worried about losing them – it’s not too late to start buckling down, spending less and saving more. Pay down debt so joblessness doesn’t mean financial catastrophe.

I also realized that I had an empty room in my house, and that room could be helping me offset the cost of my mortgage if it had a person in it. During the summer, I started looking around for potential roommates and discussing things with my current roommate to see if he planned to stick around.  He decided to get his own place, and I ended up finding three roommates.  This would end up being a pretty big decision as it would reduce my monthly costs substantially.

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