We have mentioned a couple of times but Scott was let go from his job last year. He got a working notice which was basically means that he was told the last day he had a job. He got the notice in May of 2016 and his last date was December 31st. As Scott mentioned here we took some active steps to help prepare ourselves if in fact he was not going to be able to get a job after his last day. The most drastic step we took was moving to one income as of August, 5 months before he would have lost his job. Living on one income taught me more than I ever thought it would.
Changing the Budget:
This was the most difficult part as so many things got cut; regular RRSP contributions, going out, extra mortgage payments or vacations. Anything that wasn’t a bill that we couldn’t get out of got slashed. We had to explain why we couldn’t make it for dinner as much, weren’t spending as much when we were out with friends and why we cut out our cable. Since we didn’t tell everyone that he was going to lose his job that made some of the above conversations a little tricky.
Moving the Money to a Safe Place:
While Scott had a job we started pumping the money into emergency funds. We then used my pay to take care of all of our expenses. This became pretty scary as now my job was supporting the household. I never thought that my pay have to do that. A small amount of panic also set it because if something happened to my job or I became unhappy and wanted a change I felt stuck. I had been privileged to never feel like that before and it was scary.
On a side note, I personally thought we would never be a one income household. We went to school, worked hard and had jobs that we were good at. I figured that even if there were some changes to our job situation from time to time it wouldn’t be as it was (privilege – I know).
Change of Mindset:
Once that shock wore off and we directed money every week to savings it became kind of freeing. We had extra money coming that was increasing our safety net every week. We got use to spending less and making our money stretch further.
Now with a baby on the way we are going back down to living on one income again for another year (plus). Scott’s new job is great and after his probationary period is up in July we are going to re-incorporate his pay back into our budget. That is just in time for my last paycheque to disappear. We saved up a lot of money to cover off my income while on maternity leave so we do have a buffer to cover off our monthly expenses. With all of the large expenses we have coming up covered (diapers, wipes, baby gear, weddings etc.) we are excited to be contributing to our retirement, planned spending and our little one’s future once again.
What did I learn?
Living on one pay I learned that we can do much more than I thought we could. Since Scott got his new job in April we have been taking his pay and putting it into planned spending accounts and reaching those goals a lot faster. Another benefit we see is that we are living on less, spending less and aren’t sad or feel deprived. I know that we made the right call to cut back as early as we did even though cutting out those retirement contributions was difficult.
It was helpful to me to understand how we can do things differently in the future even if we had two incomes. That key takeaway helped re-shape my money picture. But being more mindful of how you spend your money is a privilege.
Scott was out of a job for only 2 weeks; I understand completely that our situation is not a reality for most people. We have safety nets on top of safety nets and it is unrealistic to say that “everyone can do this because we did”. The reality is that many people can’t. What makes this personal finance world so great is to hear all of the diverse stories. What isn’t so great is the assumption that everyone has access to the same resources. Not everyone has the ability to save an extra pay without losing their house. I know now that our money can do so more than I thought but we were never in any real risk of losing our house.
We Thought Living on One Income Was Going to Be a New Normal:
After months of looking for a job with not so much as an interview we truly believed we needed to go down to one income. We wanted to take the extra money coming in while we could to help us in the future. Now that everything is stable again that money has helped us and will continue to help us in the future. The lessons and new perspective that I have are greater than the money itself. I know that we can make do with less and continue to do so. We can reach our savings goals faster if we funnel one income to those goals. Since we are now going to start year two of a single income household I know that these lessons will help us.
Have you ever been forced to change your money habits or behaviours? Have you felt different after that experience?