What If Wednesday: Losing Your Job

What If Wednesday

In the What If Wednesday series, we transport to a hypothetical alternate-reality and watch life play out. And we do it on Wednesday, because alliteration.

Close your eyes. Nope… that doesn’t work.

Okay. Let’s start over. Kind of close your eyes, only until there’s a tiny slit for you to keep reading this. Now use your imagination… You’ve just arrived at work. You’re feeling on your game today. You walk past a row of cubicles and spot the usuals: Tom eating Pringles directly from canister to mouth at 8:30 a.m., Debbie sanitizing her desk with Clorox wipes for the 10th time this week, Seth with his XL energy drink in hand, and the group of IT guys who insist on keeping the lights off in their section of the office. You walk past your friend Jessie’s cubicle and skip the routine morning high-five. As you settle into your desk and check your email, you see that your manager wants you to come to her office ASAP. You start mulling over the reasons: another project, a pat on the back (yeah right), a response about the vacation days you’ve requested.

But no. Five minutes later you return to your desk and numbly gather your things. You’ve been let go. Severed. Fired.

Okay, open your eyes and let the shock wear off. WHEW. Ignore that thought you just had. Yes, the Joanna’s really bad at staging hypotheticals one. And instead think this: What if you lost your job today? What would you do? What would your next steps be? If this question hits home harder for your significant other, apply it to him/her.

Since I work from home and make less money than Johnny, I’m asking myself, What if Johnny lost his job tomorrow?

Our Response

Well, we’d immediately be living in a deficit. I make significantly less money than Johnny, by at least half (yikes). Our spending would be more than our income, so we’d work to fix that by moving to a rental that’s a few hundred dollars less than where we are now. Johnny would contact recruiters about freelance work and then hit up LinkedIn and start emailing all his contacts in his industry. Luckily we’ve built up an emergency fund that could support us for 6-8 months if necessary, and my income would almost cover all of our necessities.

And we’d ask ourselves what we wanted out of life. We did a post about working for the weekends, and Johnny losing his job might be just the opportunity we’d need to start living more and working less.

  • We might move closer to family so Baby Girl could actually meet her aunts, uncles, and cousins.
  • We might move somewhere warmer.
  • If freelancing went well, Johnny could probably just work from home.

It’d be a big blow, but because of my job and our emergency fund, we’d be okay. Obviously, we really want Johnny to keep his job, but who knows… losing it might open doors we’d never considered before. After all, apparently 2013 is the year we all quit our jobs.

So… what if you (or your significant other) lost your job today? How would you cope? What would your plan be? Would it be just the push you need to start pursuing what you really want to do?

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  • Reply Mrs. Pop @ Planting Our Pennies March 27, 2013 at 7:18 am

    We’d be okay for the most part, though the savings rate would plummet. Right now pretty much all of the needs for us are paid for by my income, with Mr. PoP’s going towards savings, paying down debt, and investing.
    If I did lose my job, it’d be tempting to try and start working for myself – but who knows?

    • Reply Johnny March 27, 2013 at 11:55 pm

      It’s nice to know that things would be alright. Even nicer is the possibility of starting anew on your own. Unfortunately for me, I think it would take losing my job to actually try to make it on my own. At least for now.

  • Reply Carrie March 27, 2013 at 8:16 am

    My husband and I both work for (different) federal agencies. As you may have heard on the news, our country is having a bit of a budget issue. : ) We just avoided government shutdown but there is a pretty constant threat of upcoming furloughs. I realize that having unpaid days is a drastically better situation than actually losing a job, but I still am concerned about the possibility of unpaid days reflecting in my paycheck. We have a good bit of savings and are being a little more cautious about spending any unusual amounts. If we actually lost a job, we could make some big adjustments and be okay, but it would be unpleasantly tight.

    • Reply Johnny March 28, 2013 at 12:02 am

      Wait, what?! Our country…mismanaging its own budget?! You’re kidding! 🙂

      Sorry to hear that there’s a chance you might get caught up in all of the sequester nonsense. But good for you for preparing for what might lay ahead. And it’s good to hear that certain adjustments would still allow you to make ends meet in a worst case scenario.

  • Reply Laurie @thefrugalfarmer March 27, 2013 at 9:14 am

    Great post, Joanna. We went through this same scenario 3 years ago when Rick’s former company had a mass layoff due to financial troubles. It totally and completely sucked. We made it through financially ok, due to a severance pkg and unemployement, but without those, we would’ve been sunk. And yes, it took us 3 years MORE of irresponsible spending before with got our crap together. Rick did look at other options, like starting a business, but unfortunately, with our debt load, he was more or less forced to go back to a j-o-b. Once we get done with our plan, though, if it happens again, he’ll have a lot more options. This is just another reason for everyone to get out of debt and start saving quickly.

    • Reply Johnny March 28, 2013 at 12:05 am

      Ugh. Sorry to hear that. When Joanna wrote this, we realized that this wouldn’t be totally hypothetical for some people in the last few years. Thanks for sharing and offering up your words of advice. And more than anything, glad to hear you’re back on your feet and prepared for anything now.

  • Reply Emory March 27, 2013 at 9:33 am

    Right before Christmas my husband was faced with two options at his job as a personal trainer: he could either start selling less training and more products or he would be let go. We mulled over the options for a couple of weeks and he decided to turn in his two weeks notice. This was very scary for both of us because it meant we were taking a week of vacation to visit family and then he was coming back to no job! But, fortunately God has been good to us and my husband was able to find work within a week of coming back from Christmas visits and he loves what he is doing. We struggled for the first six months of our marriage with him being in a job that made him unhappy. He has taken a bit of a pay cut, but honestly the work is steadier and he is happier so that is so much more worth it to me. Losing a job or being forced out of a job is definitely a challenge and we had to rework our budget a bit, but since we were already working on a small budget we were fortunate and have made it through with little negative impact except to my psyche.

    • Reply Johnny March 28, 2013 at 12:08 am

      I’ve only spent a week or two in my adult life unemployed, but those one or two weeks were some of the most stressful I’ve experienced. So I can only imagine how your and your husband felt coming home after Christmas. So glad to hear that everything is working out and that he’s happier where he landed. Money is important, but it’s certainly not everything when considering a job.

  • Reply Michelle March 27, 2013 at 10:08 am

    If either of us lost our job, it would suck, but I do think that we would manage. Our expenses are pretty low (and that’s including the two cars). We would have to find a new job soon in order to not let our savings and goals disappear too quickly.

    • Reply Johnny March 28, 2013 at 12:10 am

      Like you mentioned, my biggest concern would be running off the rails on our savings and goals. But that’s what an emergency fund is for.

  • Reply Rob March 27, 2013 at 10:26 am

    Been there, done that – several years ago. Due to waves of mass layoffs, spread over 2 years, in the company that I was with I was eventually let go and was out of work for 7 months. Fortunately we coped ok due to the fact that my wife was working (although in no way making as much as I had been earning) and my severance package helped make up the difference. That said, 2 things that we had done, when first we married, also helped prepare us for just such an eventuality:
    (1) we had managed to save up a sufficient emergency fund, but also
    (2) in saving to buy our first house we had learned to live on just one of our salaries, while saving the other salary. We thus reverted back to that earlier budget, drastically cutting out discretionary spending, forgoing on planned purchases, basically doing without.

    I eventually got another job. Not as high paying as the one I had left and not exactly what I was trained for but I knew that it was sufficient for the year or two that I figured that I would need to find more suitable employment (which I did).

    During the 7 months of employment there were moments of depression and worry but I never gave up thinking positively. I still have the cartoon that inspired me – here’s the link:


    • Reply Chris March 27, 2013 at 11:03 am

      Haha! Great inspiration.

    • Reply Johnny March 28, 2013 at 12:43 am

      Haha. I have a vivid memory of that cartoon hanging in my 5th grade classroom. Obviously it made some sort of impression on me if I still remember it… or I just liked seeing a frog choking a stork. 🙂

      Appreciate your insight. Joanna and I calculated our emergency fund on a completely bare-boned budget, similar to your #2. Knowing we could live on less, it sometimes makes me wonder why we don’t. And then I remember that we quite enjoy our current (limited) discretionary spending.

      • Reply Rob March 28, 2013 at 7:06 am

        “we quite enjoy our current (limited) discretionary spending”

        As do we Johnny. To put things in their proper perspective, I feel that money is not only to be saved and used wisely but also to be spent and enjoyed in a mature way. Scrimping and saving one’s entire life, to the exclusion of enjoyment, is really no way to live since you can’t take it with you, eh? 🙂

  • Reply Leslie Beslie March 27, 2013 at 10:30 am

    I typed everything out then got really depressed so let’s just say that if I lost my job today, things would be pretty bad.

    • Reply Johnny March 28, 2013 at 12:51 am

      No!! It’s all hypothetical, so don’t get too down. But maybe after going through it in your mind, you’ll figure out ways to protect yourself in the terrible event you did lose your job. When Joanna and I have talked about this before, we realized we needed to get an emergency fund together and keep our LinkedIn profiles and resumes updated. And we have. So take that depression and turn it into action.

  • Reply Budget and the Beach March 27, 2013 at 10:37 am

    Well that actually DID happen to me, although we did know it was coming for quite some time. So as someone who did go through it, you’re right in that you need to cut back immediately. I didn’t’ do this thinking things would get back to normal pretty quickly (um yeah it was 2008) and I blew through my savings way too quickly. But I survived it and I’m still freelancing, as tough as it can be sometimes. It’s amazing what you CAN do if you have to.

    • Reply Johnny March 28, 2013 at 1:05 am

      Ugh, sorry to hear it. But glad that you’ve weathered the storm as well as you have. Your line “It’s amazing what you CAN do if you have to” is so true. Obviously I never ever want to lose a job, but part of me would like to see how we’d make things work budget and career-wise. Because we’d have to.

  • Reply Chris March 27, 2013 at 11:01 am

    I don’t know what I would do. I have a bit of an emergency fund built up but currently that would only get me through about 3 months. I think it would push me to try new things though. It’s funny how something so terrible and unexpected would have the power to make you do something that you could’ve been doing all along. It’s like those people that don’t start eating healthier until they have diabetes.

    • Reply Johnny March 28, 2013 at 1:08 am

      I know it’s probably a really bad thing, but I do kinda wonder if it would be the push off the ledge that I’d need to find a pleasant life outside the rat race. If I get fired tomorrow, I’m blaming you. Just so you know.

  • Reply Brian March 27, 2013 at 11:11 am

    I would be better if I lost my job than if my wife lost hers. She is very marketable, but she really likes this job and pays for the baby’s health insurance and it is pretty awesome. Of course I can always add them to my plan, but it would cost more than it does now.

    If I lost my job I would just do the stay at home dad thing while looking for a new one (that would save us $255/week right there). I would pretty much break even with my unemployment. It might also push me into a much higher paying job since I have the degrees and the experience now. But who knows, maybe I would like being a stay at home dad and would continue doing that. Of course having a paid off house helps a TON

    • Reply Johnny March 28, 2013 at 1:21 am

      Congrats on having your house paid off. That’s freaking awesome.

      I really do like that stay-at-home dad game plan. And yet I’d never ever consider it unless I lost my job. That’s kinda lame, right? I hate that it would require someone else basically making the decision for me.

  • Reply Emily @ evolvingPF March 27, 2013 at 11:34 am

    We created an emergency budget that is only about a $100/month deficit. If we cut out retirement savings and giving, we would have a small surplus, though we would have to play catch-up later. We make the same amount of money so it wouldn’t matter which of us lost. If we BOTH lost our jobs we’d be up a creek.

    As for looking for new jobs, it would really depend if we’d finished our PhDs. If my husband was dropped now I think they would give him the degree and he would just find a postdoc as fast as possible. If I were dropped now I don’t think they would give me the degree so I would have to find another lab to take me in to finish up or change my career plans drastically.

    My husband has stated that he is graduating this summer whether or not he has a job, so we probably should give some serious though to what we would do if he finishes his program and doesn’t yet have a place to work. Some people he knows have graduated without jobs (thinking that they don’t have time to look until after they finish) and I’m not sure how they’re getting by!

    • Reply Johnny March 28, 2013 at 1:27 am

      It sounds like you’ve got things figured out for the most part. We finished our undergrads the first or second year of the recession and it was so weird to suddenly not know whether or not we’d actually be able to find anything. And that’s more or less the reality still. But you and your husband have got a few months to start getting things lined up.

      Best of luck with your next chapter!

  • Reply jrm March 27, 2013 at 12:25 pm

    Wow, awesome topic. It happened to me – once as a firing and once as a layoff, incidentially in the same year, 2007 — not so great.

    January 2007, I was fired. it was not completely surprising. I take full responsibility for the actions that led up to it. I was SO unhappy in the job that I think I was unintentionally self-sabotaging my work. The silver lining is that my apartment lease was up that month (the renewal notice actually came the day of the layoff), I moved cross country to live with my parents while I figured out what to do with my life. There was a huge demand for my skill set in the new city and I landed a new job 1 week after moving.

    Unfortunately, the new job involved doing work for real estate developers. The company I worked for didn’t have a very diversified book of business, of course easier to say in hindsight. In October that same year I was laid off. While I only received $1,200 in unemployment it was enough for me to live off of. At the time my rent was $400 (apartment share where the utilities were included), COBRA was $300 (or so), car insurance. Put my student loans in forbearance, all my other debt was paid off.

    All of this reminds me that I need to build up an emergency fund. My rent is considerably higher now and have a small car loan. Good things to think about.

    • Reply Johnny March 28, 2013 at 1:31 am

      Wow, 2007 was rough! And you’re still here and standing tall to tell about it. 🙂 It’s always nice to hear that life moves on and other opportunities arise and you survive and thrive. Congrats, and thanks for sharing.

  • Reply Johnny Moneyseed March 27, 2013 at 12:35 pm

    The post I posted today was a similar topic to this one. This is the exact reason why I don’t understand why people try to pay off their mortgage early, because say you paid your mortgage down to $25,000 from $300,000 in an astonishing 5 years. Now, you’re jobless, and you have a house that’s almost paid off, and nothing really in savings. Why not put all that money in savings instead, so when the time came, and things became turbulent, you’d have a sweet safety net to rely on. One where you could say “I don’t even need to change my lifestyle” while you look for further employment.

    • Reply Johnny March 28, 2013 at 1:42 am

      That’s a really good point. In fact, when we were paying off our student loans, there were multiple occasions where we considered just throwing all of our savings at our debt and be done. And in almost every situation, an unexpected expense would come up and we’d realize that we would have been toast had we not had our savings/emergency fund. Moral of the story: be liquid enough to take care of life’s unexpected twists and turns.

  • Reply Financial Black Sheep March 27, 2013 at 12:43 pm

    I have been thinking about this possibility since I paid off debt in early March. I am in school with lots of little jobs / internships while Mr. FBS brings home the bacon. I have been thinking about putting off school in order to build an emergency / losing job fund. Don’t worry it wasn’t because of your post, but it did remind me that maybe I should put a plan into place instead of just thinking about the loss of a job.

    • Reply Johnny March 28, 2013 at 1:47 am

      First of all, congrats on paying off your debt! That’s always awesome news to hear. Second of all, definitely figure out and put a plan in place. If there’s a surplus of money in your budget each month, it’d probably be wiser to throw it into an emergency fund than your savings. Because should an emergency arise and you don’t have the money in your emergency fund, that savings money is good as gone anyway.

  • Reply My Financial Independence Journey March 27, 2013 at 1:14 pm

    I’d have to start frantically looking for another job, living off my emergency fund, and preparing my mom for the possibility that I might be living on her couch in the future.

    My hope is that in the future once my passive income increase enough to cover my expenses. I just sort of shrug, wander off to my car and then decide whether or not to bother looking for new work.

    • Reply Joanna March 28, 2013 at 1:48 am

      Thank goodness for mom’s and their couches, although I hope you never have to use it!

      Wouldn’t that be great to be able to choose whether to keep going into work? Best of luck in increasing that passive income stream! 🙂

  • Reply Emily March 27, 2013 at 2:45 pm

    This happened to us in 2009. Long story short: we learned how to live on less. We cut things that weren’t necessities. We bought used. We made do with what we had. We survived it without going into debt. Totally doable if you are willing to make sacrifices. Terrifying at first, not trying to sugar coat it. We bought a house, had our first child and a laundry list of crazy health things around that same time. Definitely not how I envisioned any of those things going, but I am choosing to believe God’s timing is far more perfect than mine. As a bonus I discovered the inner tree hugger in me, and will never go back to excess! Life is so much simpler when you don’t have to worry about ‘stuff’.

    • Reply Joanna March 28, 2013 at 1:42 am

      Love your comment, Emily. I can’t imagine how difficult that must have been initially. It sounds like you guys a) made the most of it and b) grew from it, which is about the best anyone could do!

      And I totally agree with your sentiment about living simply! Johnny and I have been talking about that a lot lately. We’ll probably do a post about it soon. We’re really hoping to de-clutter or lives/our home and simplify. How awesome you guys are already doing it!

  • Reply Grayson @ Debt RoundUp March 27, 2013 at 2:53 pm

    We would have to make some drastic changes and would quickly move to get another job, whether it be for a lot less money. I would work nights, weekends, and any time they would let me. I wouldn’t feel bad about reaching out to lower paying jobs. That kind of thing is trivial.

    • Reply Joanna March 28, 2013 at 1:32 am

      It sounds like you’d be willing to do whatever it took to support your family. Johnny’s the same way, especially now that Baby Girl is part of our brood. If you’re willing to work hard, I think you’d be okay no matter what!

  • Reply Lisa D. March 27, 2013 at 5:02 pm

    Sort of a depressing subject 🙁 I’m about 5 weeks away from actually starting my job, but since it’s in the magazine business this topic is definitely one I should give some thought to. I have some savings in the bank (which I refuse to put towards my student loans) and I would probably move in with family or friends and try to buy only what I needed, while I figured out my next steps. Network, babysit, freelance, work part-time, look for the next great gig and try not to get sick/injured since I probably wouldn’t pay for my own health insurance (sorry Mom!).

    • Reply Joanna March 28, 2013 at 1:29 am

      No, don’t be depressed, Lisa! Having a plan for such situations is empowering. But I agree… it’s not something worth dwelling on.

      How awesome to be starting a new job, and an awesome one at that. My perfect job would be editing for a magazine (my minor in college was Editing, with an emphasis in magazine editing), so I’m really excited for you!

      And if worse came to worst, we’d probably move in with family as well. It’s great to have them to fall back on if necessary!

  • Reply JW_Umbrella Treasury March 27, 2013 at 6:53 pm

    I work for a non-profit and I’m constantly worried about job loss. My husband’s job is a little more stable. However, we both work in very specific industries, so if we were to lose our jobs there could be quite a long period of unemployment. In addition, there is a fairly large income disparity between us. I earn about 65-70% and he earns about 30-35%. If I were to lose my job, we would need to make some major adjustments. We would be able to cover our fixed expenses, but we’d definitely need to scrimp and save in every category possible.

    I probably worry to the point that isn’t healthy…some days, my productivity suffers BECAUSE I’m so worried about losing my job. It’s a terrible cycle. Our most immediate financial goal is to build up as a much as an emergency fund as we can, so that we have some cushion in case we need it.

    • Reply Joanna March 28, 2013 at 1:21 am

      Have a plan for if it happens, and then don’t think about it anymore! Easier said than done, but knowing that you worry too much is a good start! And it sounds like you’re already working toward a backup plan, which is awesome.

      We would be in a similar boat to you if Johnny lost his job, but life happens, and we just have to enjoy the good times while we’ve got them! 🙂

  • Reply Jess March 29, 2013 at 10:52 am

    I’m pretty lucky in that I am currently living at home with my parents. And while I have a considerable amount of [consumer] debt, my vehicle is paid off. So if I were to lose my job today, which essentially could happen in the non-profit field, I think I would be okay for a few months. I would not be able to have any fun, and could only drive to and from my classes, but my general needs would be met. Albeit, I wouldn’t starve or be without shelter. My goal for 2013 though is to pay off the consumer debt and save for an emergency fund so I can better plan for a potential job loss (or the real possibility of having to quit my job to finish my Social Work MSW program).

    • Reply Johnny March 29, 2013 at 12:03 pm

      If living with parents is an option, I totally support that. That’s a fast pass to getting out of debt if your two highest expenses are covered (rent and food). And it’s especially comforting to know that surviving without a job wouldn’t be too difficult. Knowing that, you’ll likely be able to take bigger risks in the upcoming months/years in pursuing a different path.

  • Reply Carrie Smith March 30, 2013 at 9:19 pm

    My quitting date is May 1st and I couldn’t more excited or freaked out! Lol. Between my boss basically forcing me into quitting with an ultimatum and some family members that will need help with some medical stuff over the next few months, 2013 is the year I take the leap. I’m not quite as prepared financially as I’d like to be, and I still have lots of other stuff I feel like I need to do, but I have faith. For the past decade I’ve been a workaholic, and it’s time to stop sacrificing my life, and learn to start living!

    • Reply Joanna April 1, 2013 at 12:42 am

      Wow, Carrie! You’ve got some crazy months ahead, but it sounds like you’ve got the right attitude to face everything. That alone will ensure that you’ll succeed in this next phase. Best of luck with everything. We’re rooting for ya!

  • Reply Holly April 2, 2013 at 3:09 pm

    Interesting that I would find this post today as my job was eliminated and my last day at my company is this Friday. Thankfully for us we paid off all of our debt and are currently living with my family so our regular monthly bills are very low. We have been saving one paycheck and living off the other so we will continue to do this but will modify it some as there will be less to save. I get a severance and should be eligible for unemployment so we should fair just fine. We want to start a family very soon so we are looking at this as a blessing in disguise and a chance for me to stay home with our future baby and work part time for my families’ business. We put our faith in God knowing that He will always provide no matter what, so we will continue to be faithful and save/spend wisely.

    • Reply Johnny April 3, 2013 at 1:38 am

      Way to have a positive outlook on the situation. That’s really inspiring to hear.

      Congrats on paying off your debts and being in a position where you can weather this storm. Best of luck with your next chapter, whatever that might bring. 🙂

  • Reply Shauna July 29, 2013 at 3:47 pm

    This happened to us. I was let go from my job during my probationary period due to an unexpected illness that required hospitalization. My company decided they didn’t want to wait around for me to get better so they let me go. While I was recovering from surgery and a major illness, my husband got laid off from his job. We survived with help from family, but it was a terrifying period, especially as most of our savings had been wiped out by a cross-country move followed by my medical bills.

    My point is that you do what you have to; take part time jobs with crappy hours, do odd jobs to bring in extra cash and spend the bare minimum to get by and pay your bills.

    My husband ended up being off work from his real industry for more than a year, and I only work part-time while I’m in school so we still haven’t cometely caught up, but we’re working on it. We just take it one day at a time and do our best.

    Interesting hypothesis. Wish I didn’t know so much about it.


    • Reply Johnny August 6, 2013 at 5:14 pm

      Thanks for sharing, Shauna. And in a bit of misfortunate foreshadowing, this exact scenario struck us two months after posting this. Creepy, huh?

      It’s an awful process. Glad to hear things are nearly back to normal. Best of luck to you two!

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