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:
- 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.
- 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.
- 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.
- 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.
- 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).
- 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.
- 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.
- 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.
- I joined LinkedIn. I probably should've done this a while ago, but now seemed as good a time as any.
- 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.
- I started contacting friends, family and fellow MBA-ers to see if they knew of any job openings that I might look into.
- 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.
- 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.
- 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).
- 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.