The last blog post focused on open enrollment. Although it can be a hassle to sort through all the options, just be grateful you have the ability to enroll in health and other employer-sponsored benefit plans. Not everyone does.
Generally speaking, the financial planning process makes you vulnerable … you share intimate details about your financial regrets, values, and dreams. So it is only fair to share in that vulnerability, through a very personal story.
The U.S. unemployment rate doesn’t seem like a meaningful statistic until it hits your family.
My husband Bryan is a highly educated, hard-working, and ethical man. He majored in accounting simply because he perceived it as the “most difficult” major in the business school. He managed to get a full-ride scholarship to University of Missouri-Columbia and did the unthinkable: graduated with an undergraduate AND graduate accounting degree in 4 years. He promptly sat for the CPA exam and passed.
Bryan went on to work for a Big 4 international public accounting firm and then transitioned to a corporate role at a highly regarded Fortune 500 company. Bryan’s corporate tax role did not suit him, so he worked full-time and took part-time MBA classes at Washington University in St. Louis. He graduated with an MBA in 2 ½ years and transitioned into a different role at the same firm.
Bryan lost his job in June 2016. To say it was devastating to our family would be an understatement. Even though he now has a new position, I’m holding back tears to write this.
Here are some of the lessons I learned from Bryan’s unemployment:
1. Don’t freak out
You are familiar with the fight or flight response, right? If you or your spouse is faced with unemployment, your body will likely go into hyper-alert mode. Take a deep breath and try to calm down. Your emotional reaction to a stressful situation will largely play into your physical health.
2. Maintain employability
If your spouse made a deliberate choice to stay-at-home, encourage her or him to “stay sharp” with professional skills. Volunteering (especially as a leader) is valuable experience to show prospective employers. You never know when that stay-at-home parent will be seeking employment.
In our case, I was operating an accounting practice on a part-time basis. Bryan’s unemployment actually spurred me to start WorthyNest. The concept of WorthyNest was on my heart for a long time; life is too short to think about, not act upon, dreams.
3. Save for a rainy day
Live below your means when employment is stable. We would not have gotten through this difficult transition without a savings account. Since I am self-employed, we needed an even bigger cushion. My earnings from the accounting firm were not nearly enough to cover all family expenses.
4. Cut expenses
One of our biggest expenses as a family is childcare. Shortly before learning of Bryan’s unemployment, we welcomed an au pair into our family. Sole was an 18-year old from Ecuador, and the boys loved her. We even purchased a used car for her to drive! Between the program cost, auto insurance cost increase, and food bills, it was simply too much expense to bear. Against all our willpower, we said goodbye to Sole and found more affordable part-time childcare.
5. Envision the opportunity
Exit packages are sometimes available if the lay-off is spurred by poor company performance. Such a package can provide some much-needed financial breathing room. We also looked at this as an opportunity for Bryan to rewrite the script. He finally had time to reflect on personal strengths and weaknesses and see how those would fit into the next role.
6. Have faith
Saved the best for last! Perseverance. Hope. Faith. These values will get you through the tough times. When you see a storm coming, you can confront it head on OR you can slowly stand on the outside until it engulfs you. Bryan and I bravely chose to face the storm, head on. We put our trust in God, and Bryan quickly found a new, comparable role. Any money borrowed from our emergency fund has since been paid back.
This is my most personal post, and that is intentional. How can I expect you to open up about finances if I do not share something equally intimate? Please share some honest feedback … did you like this style of writing better or worse than prior posts?
Deb Meyer, CPA, CFP®