A few months ago, I lost a job. It was a first for me. To recap, a high-paying client let go of the majority of their freelancers, which included me. I felt rejected, but I quickly came to terms with it. It's business. However, since I'd been focusing 90 per cent of my work life on this client for the past couple of years, I consequently lost 90 per cent of my income when I lost the job.
This post originally appeared on GetRichSlowly.
It sucked. I went from saving a lot of money to only being able to pay my bills after drastically reducing my budget. But something surprising happened. Despite losing so much of my income, I was still meeting my savings goals each month. I thought that was pretty cool, so I figured I'd share how I did it. Yes, this is only what worked for me, and of course, these tips might not work for everyone. But hey, if some of them work for some of you, it's worth sharing, right? Here we go.
I Got Over My Fear Of Investing
Before the layoff, I'd started educating myself about investing. I invested in index funds. I researched them. I considered their long-term and medium-term return, buying accordingly. Throughout the year, I paid attention to what worked and what didn't — and I tried to understand why they did or didn't work. Sure, there's only so much that's dependable when it comes to investments, and I considered that fact too.
One of my medium-term money goals is to save for a deposit on a home. For the past few months, I haven't been able to set aside much toward this goal. But in December, I looked at my progress. The two savings accounts I have allocated toward "Home Down Payment" earned $966 in dividends. I thought that was pretty good, considering that, with holiday expenses, I was barely paying my bills that month.
It was my goal last year to learn more about investing, and I seem to be reaching that goal so far. Sure, I know that things could change direction; those funds could lose money too. But there's no arguing that knowledge is better than ignorance.
Of course, I want to earn more and continue to save more of my income. But in the meantime, it's nice to know that forcing myself to get over my fear of investing is paying off.
I Cleaned My Closets
The day after Christmas, my boyfriend and I cleaned out the apartment. Turns out, we had a few hundred dollars worth of junk collecting dust in various cabinets and closets. We donated some of that stuff, but we also put some of it up on eBay. Within the first two days, I sold a juicer, an ALF lunchbox, and a pair of jeans for a total of $140. After a week, I made a few hundred bucks. And this was just stuff that was hiding — unused and unappreciated — in our closets. I put the money in my savings account.
I Saved My "Mad Money"
A while back, I wrote about paying off my student loan in a year. One thing that worked for me was putting "mad money" towards my student loan debt repayment. Any time I earned money from credit card rewards or traditional savings accounts, I'd use the amount, however small, to pay off my loan. Fast-forward 10 years, and I'm still using the same tactic to reach my savings goal of buying a home. Here's the "mad money" I had in December, the month I tallied all of my savings:
- Credit card rewards: $35
- Interest from emergency fund: $10
- Refund from lowering my mobile phone bill: $20
- Income from a small, quick, one-time freelance gig: $25
That's $90 in savings, which may not seem like a lot. But I learned from my mum's savings success story that every little bit counts.
I Reevaluated My Expenses
There are so many resources on this topic — in fact, I wrote about this topic when I discussed my job loss — so I won't go into it in depth. But it's also probably the most effective tactic for saving when you're broke and definitely worth repeating. To summarise, here's how I reevaluated my budget's expenses after I lost a freelance job:
- I stopped eating out and shopping so much.
- I downgraded my internet.
- I learned how to do my own pedicures and thread my own eyebrows.
- I called my mobile service provider and asked for a better deal, reducing my phone bill by $20/month.
- I stopped driving to places that are within a few blocks of my house and walked instead. I took the train more. I don't drive much, anyway, but this still saved at least $10/month.
- I called my internet provider and asked if I could buy my own modem to reduce my bill by $5.99 each month; they said yes. They charge a monthly fee to use their stupid modem. So silly. I should have done this a long time ago.
Again, I understand that what works for me isn't necessarily going to work for everyone else. Maybe your budget is as tight as it can be. Maybe you're at a low point with your investing. Maybe you don't have any mad money. I've certainly read my share of practical advice that I didn't necessarily find applicable.
But, to me, it's ultimately about being resourceful. When you want something, you do whatever you can, depending on your situation, to make it happen. (Even if it means selling your beloved ALF collectible lunchbox.) I really, really want to save for the future, whatever it may hold. I'm doing anything I can to make it happen during my financial struggle. Turns out a little resourcefulness goes a long way.
How I Kept Saving Even During a Job Loss [GetRichSlowly]
Kristin Wong is a freelance blogger who frequently writes about relationships for MSN's The Heart Beat blog. After paying off her student loan debt, Kristin decided it was time to pursue her dream and also put her English degree to use. She scrimped, saved and in 2010, left her hometown of Houston, Texas, to pursue a writing career in Los Angeles. Since then, she has written for television, web and occasionally sketch comedy. When she's not attached to her laptop, Kristin enjoys baking, amateur gardening, listening to '60s rock and exploring her city.