What if I lose My Job?

Job Loss Subscribe to future posts from Figueroa Financial by e-mail

Have you asked yourself that question recently? This question became relevant to me very recently as some colleagues at my company experienced the dreaded layoffs.

As I spoke to them about their situation and their next steps, I began thinking about what I would do if I found myself in their shoes. Regardless of your financial situation, losing a job is definitely a crisis, an emergency situation.

I have been blessed and I have never experienced a job loss before. So this is primarily theoretical question but an important one. Consider it an emergency drill. This is how I think I would handle the loss of my job:

Acknowledge and Accept the Loss

  • You may be a very good performer with great skills and a terrific service record for your company. It is still possible that you will get caught in the numbers game. In that sense, a job loss would not be your fault and you need to understand and remember that. In my case I would need to remember that I do have a lot to offer to prospective employers and clients.
  • Losing a job is extremely personal. Most likely, one of the comments I would hear from management is something along the lines “it’s not personal, it’s business decision”. The only problem with that is sentiment is that losing a job affects your entire life so it is indeed very, very personal. I would probably spend some time dealing with a sense of loss and grief. But I don’t think I would dwell on it too long.

I would need to be able to fairly quickly acknowledge and accept the situation. Once that step is completed I would be ready to deal with what comes next.

Assess Financial Situation

  • I would need to do a quick assessment to understand the following:
    • What are our monthly obligations? Our monthly budget should be able to answer this question.
    • What are our assets and liabilities?
    • How much money do we have in the emergency fund?
    • Am I getting a severance package and if so, how much?
  • Quickly prioritize the 4 walls of food, shelter/utilities, transportation and clothing for spending in our monthly budget.
  • Determine which spending categories can be reduced or eliminated completely while we are dealing with the crisis.
  • Determine how to cover medical expenses.

Because my wife and I have a much better handle on our money than when we first got married, this second step would be very manageable. I could easily map out how long we can manage our obligations while I look for that next job.

Having your finances under control today will enable you to deal with a crisis tomorrow.

Assume Responsibility for Next Steps

  • Reach out to friends and family. In my case, I would let them know what happened, how we are doing, and I would ask for prayers for God’s wisdom, peace, and provision.
  • Review and update my résumé as necessary. Thankfully, I have kept my résumé up to date since I first experienced an employment crisis back in the early 90s (I did not lose my job but my division got sold. Big wake-up call and lesson for a 26 year old). I also have a very up to date LinkedIn profile that I review on a regular basis.
  • Reach out to former colleagues and/or clients. They can help identify potential employment leads. These people know me well and could speak on my behalf and keep an eye open for opportunities.
  • Read/review materials on strategies for job hunting and interviewing. Over the past few years I have read some great resources such as “48 Days to the Work You Love”, “No More Mondays”, and “Quitter”. It would be time to review key lessons learned and to get my hands on similar material.
  • Remain active. Not having something to do every day would be new to me and there is the danger that I could fall into too much relaxation. To fight that off:
    • I would need to continue to exercise on a regular basis.
    • Find more opportunities to serve others.
    • Devote most of my time to the task of finding another job.

Even though losing a job represents an emergency, crisis situation it could lead to something better. But I would have to assume ownership and responsibility for what happens next.

What about you? What would you do in the case of a job loss?

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15 Tips for Saving Money

savings, Piggy Bank-01

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Do you struggle with saving money on everyday purchases? As you seek to get your finances under control, it is quite possible you are running into trouble with a few categories on your budget.

As I recall our own journey towards financial wellness my wife and I ran into that problem.

For us there were 3 categories where the spending fluctuated greatly: groceries, restaurants, and recreation/entertainment.

I know these areas could be a challenge for you as well and I wanted to help.

The Bible says that in the abundance of counselors there is victory (Proverbs 11:14), so over the last week I have been asking the fans/followers of Figueroa Financial on Social Media to share how they save money in these categories.

So with their help I give you the 15 Tips for Saving Money:

Groceries

  1. Use coupons.
  2. Shop with a list and only get those items on the list.
  3. It’s ok to get the store brand. In many cases, the items are as good as the name brand.
  4. Don’t go shopping when you are hungry. You will want to buy anything and everything!
  5. Use cash (envelope system). When the money runs out, you stop shopping. 🙂

 

Restaurants

Yes, it is ok to eat out even when you are on a budget. Just make sure your spending is consistent with your take home pay and that you plan for it in your budget. In addition:

  1. Look for special offers like “2 for the price of 1”.
  2. Couples: Order an appetizer and share a meal.
  3. Drink water. This is cheaper than drinks, tea, or soft drinks and water is better for you anyway. 🙂
  4. Use cash (envelope system). When the money runs out, it’s time for leftovers. 🙂

 

Recreation/Entertainment

  1. Movies
    1. Go to the first show of the day, or a matinee and save on the full ticket price. One of my readers say that he and his wife do this on Sunday mornings on a weekly basis as their “date day”. It is cheaper and it helps your relationship!
    2. Looking for a rental for a home movie night? Redbox offers rentals for about $1 (if you register with Redbox, you get coupons via e-mail). You could even do an internet search for “coupons” and find some coupons for free movies (it might apply to other items as well).
  1. Watch out for special deals at parks/museums. One of my readers indicated that she watches for the “Dollar Days” at the local Zoo.
  2. Books
    1. Don’t buy the hard cover edition of a book. Wait for the paperback edition.
    2. Shop at a store that resells book at discounted prices (like Half Price Books). You can find a great selection of used books at great prices.
    3. Get a library card from your local library and take advantage of the opportunity of borrowing a book.

What other saving money tips could you share with us?

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Friends, Family, and Money: Dealing in Truth & Love

Giving, generosity, open hands.“but speaking the truth in love, we are to grow up in all aspects into Him who is the head, even Christ,”
Ephesians 4:15 (NASB)

One of my main motivations for helping you get control of your money is to enable you to be in a position to help others and give extravagantly.

Our world engine operates on the fuel of money, and if you have the financial capability, you can do a lot of good. As Margaret Thatcher said: “No-one would remember the Good Samaritan if he’d only had good intentions; he had money as well.

But how do we define help in the case of friends and family in financial need? What happens when you get that phone call or e-mail saying: “I am in dire need of money”? Do we lend money as asked? Do we simply give it if we have it, regardless of the person or the situation? Is there a good time to say no to someone who says they are in need?

I would like to give you a simple process to help you walk through a financial request from a family member or a friend. I hope you find it useful to deal with your family member or friend in truth and in love.

1. Pray

As a Christian, this is usually my first step. Ask for time to respond and consider the request. Personally, I need divine wisdom to evaluate the situation and the person making the request. If you are not a person of prayer, then make this your “sleep on it” or “think through it” step.

Please take your time to evaluate what you will do. Do not respond immediately simply out of emotion. Sure, emotion and feelings play a part in this, but make sure you give yourself time to decide.

2. Talk it Over

If you are married, do not skip this step. Remember, you and your spouse are building a life together and you should make money decisions together. Don’t try to hide it to avoid a difficult conversation. Your spouse deserves the truth and the opportunity to respond and weigh in on the decision.

Talk it over with your spouse because you need his/her wisdom to respond in this situation. If you are single, you still need the wisdom of a trusted friend or advisor. This person can give you objective advice to help you make your decision.

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3. Speak the Truth

Here comes what might be the most difficult part. You may know why this person is in this situation. It is quite possible that a major issue like an illness or a job loss is the cause of the financial distress.

But it is also quite possible that it is the result of mismanagement of money. Don’t get me wrong. I have mismanaged quite a lot of money myself, so I understand how this happens. We all make mistakes with money and I know that it hurts when someone we love is making some of the same mistakes.

However, this might be a good opportunity to speak truth into this person’s life. If they feel close enough to you to ask for money you should feel close enough to offer some advice at this time.

Talk about how you have turned your situation around and tell this person you are willing to walk alongside to share what you have learned. The person might not be as receptive in the future and you can be a part of turning their situation around for good.

4. Show the Love

Be careful as to how you define help. Personally, I don’t lend money to friends or family members because it changes the nature of the relationship. I don’t need to be in a master-slave relationship with someone I love (Proverbs 22:7).

However, if you are in a position to give this person the money do it. Make sure you are not enabling bad behavior (i.e., giving a drunk a drink) and that you are truly helping. If you think the money will harm the person, be careful that you are not making the problem worse. You might be better off showing love by saying no.

Otherwise, if you are dealing with a family member, it is your flesh and blood, give them the money. If it is a friend, then by all means be a friend (I John 3:17). Be a blessing when you can be a blessing.

One last thing. The person might insist on paying you back. Be firm and state that you are not making a loan. Simply say that the only “repayment” you want is for them to get their finances in order and that when the time comes, they help someone else in need. In other words, ask them to pay it forward and be a blessing to someone else.

“It is better to give than to lend, and the cost is about the same.”
Sir Philip Gibbs (1877-1962)

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5 Common Budgeting Mistakes

Cash, Budget

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As I have written previously, I believe having a monthly working budget is the key to your financial success. If you can’t control your money via a budget, you can’t build savings, you can’t pay-off debt, and you can’t plan for the future.

However, it is quite possible that as you are getting started with the budgeting process, you are running into some issues. Here are 5 Common Budgeting Mistakes and how to solve them.

1. Failing to Track your Monthly Expenses

Remember that a budget is simply a plan for your money. And the only way a plan of any kind works is if you can measure the results against the intent of the plan. This works whether you are discussing a schedule for building a house or a weight reduction program. You need to face the reality of how you are spending your money.

I will admit that I am a bit obsessive with tracking spending but I have a system that works for me. Every expense is tracked in Quicken and I also keep tabs of the actuals in an Excel Spreadsheet. I can always tell where we are at any given point in the month. It gives me great peace of mind.

Whatever budgeting system you are using, do not neglect to track your actual expenses as it will give you a good view on how well you did in planning your budget.

2. Preparing a Budget but not using it

This is closely related to item #1 above. You may have done all the preparation work on Quicken, YNAB, or an Excel Spreadsheet. You even did it before the month began and you allocated every dollar to a spending category.

But now, the budget is filed away and the month goes by without you checking how you are doing against the budget. Remember, the budget gives you the boundaries for your spending (like the foul lines on a baseball field that enclose the fair area of play). You should keep an eye on how the actual spending matches against the planned spending.

So I don’t’ suggest you look at your budget every day but at least take snapshot once a week. Get the budget out and see how you are doing in staying on track with your money plan.

3. Failing to Adapt/Change When it is Needed

As you keep an eye on your expenses against your planned spending, you will be able to gain insight into any required adjustments. For example, you may have an unexpected drive out of town and you need to increase the allocation for gasoline. And perhaps your clothing needs are not as high this month as you thought. So you make the adjustment in those categories and balance your budget.

Remember that this is your money and your budget. It is not written in stone so if the conditions of the month change, hold a budget committee meeting and make adjustments as needed.

4. Forgetting to Prioritize the 4 Walls

Your budget is a great tool to help you prioritize your spending. First and foremost you need to take care of your family and yourself.

This means that the 4 walls need to be protected by allocating the spending first those categories. The 4 walls are: food, shelter/utilities, transportation, and clothing. If you take care of those items first, you will be in a better position to deal with the rest of your spending because you would have taken care of your family first.

5. Making it too complicated

The final mistake is making this process of budgeting too complex. The reality is that the concept of budgeting is very simple: lay out all your income side by side with your expected expenses. Then allocate each available dollar to a spending category. That’s it.

You could get bogged down with all the configurations of a tool like Quicken or build an Excel spreadsheet with 20 tabs. Don’t do this. Keep it simple and it will be easier for you to stay with the budgeting process.

Are you making any of these budgeting mistakes? What are some of the challenges you experience in using a monthly budget? Let me know what you think!

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