Financial Check Up: March 2009

Well this month and last seem to be waiting, waiting, waiting. The company I worked for very abruptly decided to close its doors in February. Since my husband’s income pays most of the bills, mine is used for our savings, groceries and retirement funds. I have never applied for unemployment in the 17 years I have been working and going through the experience now really sheds some light on things! I applied in January and am still waiting to hear how much I qualify for and if I will even receive payment.

Unemployment offices in most states are so swamped right now they are asking for 6 weeks to process claims. My case is nearing the 10 week mark and we have been told the process won’t go any faster unless we can prove severe hardship- such as a foreclosure notice from our bank.

Thank goodness we got on board with Dave Ramsey years ago and paid off almost all my school loans, our cars and credit cards. We still have a portion of my grad school to pay off and then we can really get back on board with focusing on our savings account.

What I have learned from this experience is the importance of having a savings account. Since I am 31 weeks pregnant the opportunities for employment are limited. I had no idea the unemployment process took so long and that it would be over two months without a word.

I also decided to be extremely proactive in the process. The night we heard my company would be closing, we sat down and really looked at our budget. When we moved to California last January we put 20% down on our house, which basically wiped out our savings. This was a mistake that we have learned from and will never repeat! At the time we had no idea the economy would experience the roller coaster we have all been on.

Since then, we have been focused on slowly building our savings back up and have 3 months of expenses in the bank. Our goal is to not have to touch that money during this process so we slashed everything in the budget. I fought our way out of an expensive cell phone contract and I will be getting a prepaid phone. I would skip this altogether except being so far in the pregnancy I feel more secure knowing I can get ahold of someone just in case. We slashed our grocery budget down to $30 and I am spending a lot more time at home to avoid filling up our tank. We cancelled my daughter’s expensive gymnastics class and I am taking her to the park several days a week instead. I sold a few items we don’t use on Craigslist. I submitted our taxes the same day I got our final W-2 and we have already received a refund from the federal government. (Just in time to pay the registration on both of our vehicles).

While we aren’t in financial peril, we should have known better than to empty our savings account last year. I am thankful that we do have savings in place that combined with my husband’s income would easily get us through the end of this year. I am thankful that we don’t have bill collectors calling since we paid off our cars and credit cards years ago. I am also thankful that we have the determination not to go back into credit card debt and we are willing to do just about anything to stay out of it. We are also trying to stay positive and are looking forward to getting back on track with the debt snowball to pay off the last bit of student loans.

Stay tuned as I will be posting our experiences with Dave’s program and how we eliminated over $20k in debt a few years ago.