Unexpected job loss and what to cut?

[jlt19]

Cable, obvs.

DH unexpectedly lost his job Monday. For a multitude of reasons, it’s going to be difficult to find a new one and even come close to making up his salary which was roughly 45% of our gross salaries. I’ll be getting a good bonus in March that I’ve never gotten before, which will be around 10% of last years gross.

He contributed 15% to his 401k which clearly stopped.
I contribute 17%, plus max the HSA. I cover all health, so that’s good. It’s $0 premium but high deductible. I’d planned on paying for any medical out of cash flow to use the HSA as a retirement vehicle.

We max our Roths by putting in $250 each twice a month. Also put $200/month into a 529.

We have $40k in I-Bonds (earmarked for emergency fund), $40k in the market via FA, and $15k in savings.

I do have $33k in SL debt I haven’t paid on.
Other than mortgage, no other debt.

WWYD as far as cutting the “expense” of saving? I hate the thought of stopping contributions when the market is “on sale” and I definitely don’t want to sell anything if it can be helped.
He qualifies for unemployment, but it’ll be about 25% of his net.

I do plan on talking with our FA about all of this too, but he’s also a friend and DH isn’t ready to tell people just yet.

I know this was long, so thanks if you got this far. I’ve got a LOT of feelings about this and no one to really talk to about it yet. So I’m just trying to triage first.

[bee20]

Ugh, sorry to hear.

I would first cut your 401k down to the minimum for employer match. The tax savings will be less exciting since you'll have a lower income this year. You can always ratchet it back up later if he gets a better job.

Next I would cut the 529, while this will be an impact to your kid's savings, if your income never recovers more scholarship money will be available and you can't take out loans for retirement.

Last would be the Roths, the amount you can contribute is capped each year, and putting in money in a lower tax year means it's overall more efficient.

ETA: For the HSA, I'd continue to cashflow but save your receipts.  Once you take out the money you can't put it back in, but if cashflow is getting tight you can file for reimbursement from your HSA.  If you get to the point of cashing in your savings, I would do your I-Bonds first (you'll just be losing some interest, a finite amount), then the general stocks, then your HSA (assuming it's invested).  HSA is usually the most tax-efficient option.  If your HSA can't be invested then I'd take money from there after the I-bonds and before the stocks. 

[krystee]

I am so sorry. Been there, and it was such a crappy feeling.

I would probably keep your bonus as a cash emergency fund and for extras the budget can’t cover so you don’t have to touch the bonds. Has your H looked at how much he can earn and still collect unemployment? Maybe he could Uber Eats or something to get to the max amount to close the gap a bit?

Does he get severance?

[sadlebred]

That's crappy, and I'm really sorry!

I don't agree that you should keep contributing to your ROTHs. That's cash that can be used towards bills, so you don't have to pull money from elsewhere. Your I-bonds are probably "making" more than the stock market right now. You can always catch up at the EOY if your H gets another job.

Check to see if Unemployment is taxed in your state and if taxes are taken out. If not, you may need to increase your tax contributions above what you already do to account for it.

Do you have a line item budget and know where your money goes every month? If so, look there first for any discretionary spending.

1. Cable
2. Cut the internet speed down to the minimum you need.
3. Yard service/house cleaner.
4. Kids camps (if your H is home, he can help with school breaks), extra activities, private "whatever" lessons. Keep it as minimal as you can. Kids don't NEED to do everything.
5. Clothing. Wear what you have for now and only replace what wears out/is outgrown for the kids. Go cheaper.
6. Eating out/take out/deliver/Ubereats.
7. Expensive cell phone plan. Look at MVNOs.
8. All discretionary spending. We never "need" that new whatever.
9. Generic medications. If anyone in your family takes a name brand med, ask their doctor about switching to a generic.

I'm sure I'll think of more. I'm prepared in case I am ever unemployed. I know what I should immediately cut and what I can wait a month or two to cut.

[steamboat185]

I’m so sorry that is such a bummer.
I’d continue funding the HSA. If you don’t need to touch it don’t, but if you do I’m assuming you have some older bills you could claim and get cash out relatively quickly.

I’d cut the 529 and probably pause the Roth. You can always fund the Roth later in the year. The 401k would be my last change, although I would look to see if the bonus is 401k eligible. If the bonus is 401k eligible I’d drop that paycheck percentage down.

[chpmnk1015]

Ugh I'm sorry..

When I lost my job we cut the usual... housecleaner, eating out, etc.
I cut the kids savings too during that time... people had a lot of good ideas above...I'd take a look at everything you are spending on and go from there

[jlt19]

Thank you all for the hair pats and suggestions.

krystee, no severance. But he used to be in the building trades, so I know he could pick up some jobs around our neighborhood. He doesn't want to go back "in the field" but he'll do what he has to do in the short term.

sadlebred, great suggestions.

1. We only have Hulu and Netflix, but I'm going to look at different deals to get them lowered. Won't be much either way, but something. Xbox ultimate game pass is paid up for a full year, so that's good.
2. Internet is still on a "deal" at $50/month. I don't think we could go much less with me working from home 3 days a week, plus phones/tv's/xbox on wifi.
3. n/a
4. Damn kids. Both are in club volleyball and baseball for DS. And while fees/uniforms are paid for already, OOT tournaments are starting. Once he's comfortable sharing the news, I think I can probably talk to some other families about sharing rooms/splitting costs/etc.
5. Absolutely
6. Absolutely
7. Ugh. I'm so annoyed about this. Thankfully I just switched myself, DD and DS to Mint Mobile around Christmas, so we are actually paid for the year. But DH's phone was through work and they want it back ASAP. so I bought him a new iphone (12 mini) so he can keep his number of 20+ years. That plus his service for the year was around $700. I'll just use bonus money to pay for it and forget about it. I could have found something cheaper I'm sure, but I was panicked and not thinking clearly.
8. Absolutely
9. Luckily our medications are generic and are probably less than $50/month for 6 maintenance ones. THAT part of our insurance is great.

DH is/was the biggest offender of #5,#6, & #8. At least this will FINALLY make him listen to me?!

steamboat185, I do know that the bonus is not 401k eligible, but thanks for that. Maybe I should try to adjust my tax withholdings though before it comes in March? Ugh, I barely know how to do that anymore, I hate the "new" W4.

I'm giving him at least this week to wallow (before starting to nag about putting together a resume, creating a LinkedIn, etc). Should I give him more? I just don't want him getting too far in a state of depression. Luckily (?) we've seen a marriage counselor for over 2 years now, and she's been more of a "whole life" counselor for us for quite some time. So, she was happy to squeeze him in Monday and I'm sure it'll be the topic of our joint bi-weekly sessions for awhile. We have 3 more "free" with her on my side and then we'll get the 6 free EAP for him and figure something out after that.

[aspentosh]

I'm so sorry. H lost his job (sole income for us) in Dec of 2020 and it was brutal for my mindset. So make sure you take the time for yourself to deal with this <3

What we did: cut out all the non-necessities. We don't have a housecleaner or yard people and DD is in school, but I put off buying clothes until we *needed* them vs buying things we *would* need in the future, really planned our groceries to take advantage of sales/ate from the pantry and freezer, and all of those other basic things.

Thankfully H was pretty marketable so we didn't feel the need to cut back on ROTH contributions (only retirement option we had while he was unemployed) or other savings goals. But obviously if you think it'll take him some time to find the right fit, I don't think stopping them would be a horrible idea. You can always catch up later in the year.

W/R/T your last post and how long to give him. I think a week is plenty. H took a day to be pissed, but it was a couple weeks before Christmas, we had no income, and I was a total basket case, so he started updating his resume and doing the website stuff the next day. Because of the pandemic and how slow gov't contracting is, he didn't start with a new job until April despite having signed contingent offers in early January. I hope yours is a faster process <3

[simpsongal]

You've gotten good advice, I'm so so sorry. My DH went through employment challenges and it was tremendously hard on him and us.  A week is pretty quick, but you know your DH.  The therapist will be a good source for consultation (though might be a place to cut expenses eventually).  My DH did not handle the unemployment situation well at all, he was definitely depressed.

I'd be on the look out for low cost and free fun activities too. Like games/puzzles you haven't pulled out, gift cards you haven't used. More eat-the-pantry meals w/grains and things you have in there. More vegetarian eating too. When I'm trying to economize, going to the thrift store helps scratch my shopping itch. I have also done decently selling things on FB Marketplace or craigslist.

At some point you might be able to adjust your withholdings. It's hard to say now since your DH may find another job in 2023, but you could potentially claim head of household.

[steamboat185]

I’d take a big look at your food budget and see if there are convenience foods that you can cut. They tend to be more expensive and since DH has some time he can hopefully try to take up some of that slack.

I agree with trying to find free stuff- we go to our library events frequently. They have a maker space, sewing classes etc.

I’m not sure if you or your DH worked from home currently, but our gas prices have gone through the roof like up 200-300 dollars a month from last year. It might be worth checking too try and have him out of the house a few days a week just to save on heating.

[Pilsy]

I'm so sorry about this. I hope he lands something new quickly.

[wildrice]

I am so sorry. You guys have had a rough few years.

In terms of how long you give him, I think that depends. If he was fired, I'd consider why - was it something within his control that he chose not to do, or is he truly struggling with something that isn't his fault? If he screwed up I'd be less lenient than if this was something that just happened to him that he couldn't have prevented. If he was fired for cause I'd want his butt to be looking for a new job basically immediately. I admit that I'm feeling protective of you here with that advice and I don't have a ton of sympathy for him if this was his fault.

[Deleted]

Not a cut per se, but when my husband lost his job years ago, I immediately inventoried our freezer and pantry. I was amazed at how long I was able to sustain us with stuff that was already in our house.

[jlt19]

Feb 1, 2023 11:22:34 GMT -5 wildrice said:

I am so sorry. You guys have had a rough few years.

In terms of how long you give him, I think that depends. If he was fired, I'd consider why - was it something within his control that he chose not to do, or is he truly struggling with something that isn't his fault? If he screwed up I'd be less lenient than if this was something that just happened to him that he couldn't have prevented. If he was fired for cause I'd want his butt to be looking for a new job basically immediately. I admit that I'm feeling protective of you here with that advice and I don't have a ton of sympathy for him if this was his fault.

I don’t 100% know, nor will I ever, probably. He’s not good at self evaluation. He was at a small niche company for almost 5 years. Literally mom and pop, daughter, her BFF’s husband (25 year friendship), HIS brother, and owners neighbor of 40 years. He was always the odd man out, but was “like family”.

Owner is an alcoholic and has been relapsing more frequently. Had two 30+ days rehab in 2022, whereas he had only one the rest of the time DH worked there. Also relapsed and didn’t go to in patient 1-2 times in 2022. DH mentioned he also has other mental illnesses at play. Not blaming him, but he just hasn’t been himself or stable for awhile it seems.

But then DH is also not the greatest at following through with things and is not a take charge kind of guy. He’s also got ADHD and is medicated for depression/anxiety but doesn’t take his medicine as regularly as he should. He swears he does, but since I re-order it all and am on similar things, I can tell.

I knew something wasn’t right when he didn’t get his annual review in September (usually a raise too). But he didn’t ask because he didn’t want to rock the boat. Also didn’t get his 5 figure Xmas bonus. Didn’t ask because owner was in rehab and didn’t want to seem insensitive. Turns out he didn’t get a bonus because owner was unhappy with his performance and thought that should have clued DH in. So, passive aggressive bullshit there. I was on him to talk to someone else because I was afraid company was going under). I was also on him to start a bullet point doc of what he did. Something to start a resume with. Did he? Of course not. (He at least admitted I was right the whole time).

It’s possible DH got “constructive criticism” at some post and either didn’t stick with it or didn’t catch on that it was important. There is blame to go around but what’s done is done and I’m furious at them, at him, feeling a LOT of PTSD from my own previous work situations and what they led to in our personal life. Then I get mad at myself for how I handled all of that and I’m in my own spiral. But I have no one to talk to because he’s too embarrassed to tell anyone and I can’t vent to him about himself because that’d be an asshole move. So lucky you, lol.

I admit we are deeply co-dependent and I usually do and fix everything. So I’m also already freaking out that an outline of a resume hasn’t been written down. Or unemployment hasn’t been filed for. But I can’t do this for him and he deserves some time to wallow in his self pity.

What’s even more, is we live 2 minutes from the daughter/office manager. They walk in our neighborhood with their toddlers all the time. And her husband will be DD’s history teacher next year. It’s a tiny school/community, and we see them all the time. How fucking awkward.

Sorry for totally unleashing…

[sadlebred]

jlt19, I am so sorry. It sounds like a terrible situation to be in, and PLEASE feel free to vent to us.

[bee20]

jlt19 , it's stressful. Vent away, that's half of this board and many of us have been through a firing or layoff and understand the feelings.

Other people may disagree, but I would say this is an ok time to be a little co-dependent. If you are better at executive function in your relationship, get unemployment registration done and check around for resources (library, county jobs corp, resumes for dummies book, etc) that can help him with the resume. You can't write the thing for him but it might give you something to feel movement on and give him some supports when he's ready.

I'd say give him the week but get going quickly after that. We're currently averaging 4 months between application and first day. Remind him he will get some time off while he goes through the interview process but needs to get it started.

[wildrice]

jlt19, vent away. That is a LOT and it seems like the two of you can't catch a break, regardless of whose fault it is at any given time (and FTR from what I recall of what you've been through personally - NONE of that was your fault!).

It sounds like his job had become a not great situation anyway, so perhaps a fresh start will be good for him. That's not super helpful for the current gap in income, but hopefully he will find something soon. I know there have been a lot of tech layoffs recently but I don't think hiring has slowed down in a lot of other sectors. It's still really hard to find people to even apply for let alone accept jobs. Like with any job search I'm sure it won't happen overnight, but hopefully you're looking at a few months vs anything longer. In the meantime, please lean on us as much as you need!

[Roc A Bee]

I’m sorry. That’s a lot.

Can you live off your income alone? I guess I’m not sure how much you need to cut monthly. My instinct would be to stop saving everything except for an e-fund because this is an emergency.

[chpmnk1015]

Vent away that's a lot.

[jlt19]

Feb 2, 2023 1:02:11 GMT -5 Roc A Bee said:

I’m sorry. That’s a lot.

Can you live off your income alone? I guess I’m not sure how much you need to cut monthly. My instinct would be to stop saving everything except for an e-fund because this is an emergency.

I just ran some numbers today and we’ll be ok short term. Without accounting for any difference of my take home, if drastically cut back food (to a realistic amount), random shopping, and the IRA’s/529, we should be able to swing it on my income and unemployment. I’ll confirm with our FA next week after my annual review where I’ll see if/how much of a raise I’ll get and how much my bonus will be (stick in savings of course).

Luckily (?) I also churn credit cards and our last 3 just so happen to be 0% interest for 12 months. I already had a pay down plan for each of them in place, so I’m going to scale back on that for now. With decreased spending, we should probably be on the same payoff track anyway. If not, I’ll have the bonus savings to pay them off before they start to accrue interest. But he’ll have SOMETHING by then.

[RockNVoll]

You've gotten a lot of good advice already. I just wanted to offer that I wouldn't stop contributing to the Roth if you can swing it. You can always pull your contributions (but not gains) out anytime you need to, completely tax-free and penalty-free. This is one aspect of the Roth that's much more flexible than a traditional IRA. I'd stop contributing to the 529 first--as someone said upthread, you can get loans for education but not for retirement.