Minimalist Money: Surviving Unemployment

Almost one year to the day after quitting my last job, I began a new one. I never thought it would take so long. It’s harder when you’re older, but even more so when you don’t have many contacts. I did make it to the initial interview at one company only to find that the job description had been misrepresented and the salary so low I’d need another source of income. I passed. Strike one. In the spring, I succeeded in getting through two rounds of interviews. They told me I was the #1 finalist. Then the job was withdrawn due to budget concerns. Strike two.

I began taking on contract work when I could get it, but by the end of the year, my money was running out. I started making alternative career plans. Then out of the blue, the company that had withdrawn the position previously called and asked if I was still interested. You bet I am! I had an interview with one of the directors, and a few days later, I accepted an offer. I took a deep breath, followed by a sigh of relief. I had survived a year of near unemployment. I hadn’t lost my house, gone into debt, or dipped into my retirement savings. I had also been able to enjoy my life and stay positive (most of the time).

How did I manage it? I received no unemployment compensation because it was my choice to quit the last job. I had one small paycheck to come, but that paid little more than one month’s mortgage, and I had less than $1500 in my credit union accounts. Fortunately, I had over $25,000 in my online savings account. That’s what gave me the freedom to quit a job that I hated.

“Well, ok then,” I hear the cynical reader say, “if I just happened to have that kind of money lying around in my savings account, I could quit my terrible job, too.”

“But here’s the thing. I didn’t ‘just happen to have’ a sizeable savings account,” I would retort. “It came from years of tracking expenses, paying off debt, and intentional simple living.”

It’s no exaggeration to say that minimalism, or living simply, enabled me to survive a year on very little income. However, one could also say that it’s due to minimalism that I quit my job in the first place. What? Let me explain. About five to six years ago, I began to reflect more seriously on how I wanted to live. I finally acknowledged to myself that my job and financial situation were too stressful. I began to read more about minimalism and simple living and living more intentionally with more meaning. After all, I had survived a house fire and cancer and was getting close to 60. Time for a change! Before I could make that change, though, I needed to get real about my finances.

The First Steps

• detailed tracking of all expenses, including debt payments and annual costs, like car insurance

• regular analysis of how, when, where, and why I spent money (tracking alone isn’t enough)

• careful planning to reduce my cost of living and eliminate debt

• periodic exploring of new job and living situations

The result is that I sold my house for a nice profit, paid off my debt, put money into savings, and moved to a more affordable part of the country. After living in the area for two years, I moved again to a much smaller house in a location that was much more walkable and bike-friendly with more amenities nearby. I broke even selling that house, but I gained by buying a smaller, less expensive one. Now, my mortgage was cheaper than anything I could rent, and I had a good financial cushion in savings.

Not everyone is in a position to move to a different home, let alone a different part of the country, but we can all track expenses and reduce our cost of living. Yes, it’s a hassle to track every single expense coming in, and if you really can’t (or won’t) commit to doing it all the time, try it for at least for three months. That should give you a realistic average of your monthly costs. You can figure out where your money is going and how you can reduce costs. Over the years, I have reduced my cost of living considerably, but now I was determined to go even lower. I made a plan.

The Next Steps

• reduce dining out

• increase cooking

• make a meal plan more consistently

• decrease entertainment costs

• increase use of public library, parks, and other no- to low-cost venues

• use car wisely (not commuting helped)

• stop and/or do not renew subscriptions and memberships

If I compare my average monthly expenses of the previous year to my unemployed year, I see that I reduced costs by over $250 a month. That doesn’t tell the whole story, though, as I separated my health insurance costs from my monthly average. This was a new category now that I was unemployed. That expense cancelled out my reduced costs and even put me over my previous monthly average. That’s the real down side to unemployment, folks. In the U.S., health insurance not provided by one’s employer can cost a small fortune. I had looked into various insurance possibilities, but none of the monthly costs were significantly lower than the COBRA plan I could use for 18 months after leaving my job, and most of the others had much larger deductions. Health insurance became my second largest bill after the mortgage.

As anyone working contract, or freelance, jobs knows, the payments are irregular. I was a newbie and had just begun, so my total income was about $14,000—not enough to pay the bills. That’s where the safety net of a good savings account helps. I also received a very generous birthday check from my friend of 45 years, which kept me afloat in December. Was I worried? Sometimes. But I figured I could build up my freelance work and get a non-professional job for a regular paycheck.

More importantly, I knew that living with less was manageable, even enjoyable. I made it a challenge to get by on less without it seeming too much of a sacrifice. I’m sure my close friends had some ideas about what I gave up, but judging from conversations with others, it wasn’t that obvious. Sure, I sometimes wanted to purchase stuff, including the means to enjoy more experiences, but overall, I didn’t waste too much mental energy worrying about it. I feel grateful knowing that I can be content with less. Now that I have a good job, I can relax a little, but not too much. It’s time to build up that savings cushion again!

RESOURCES

Bolle, Richard N.  What Color Is Your Parachute? 2018: A Practical Manual for Job-Hunters and Career-Changers

Cavoulacos, Alexandra and Kathryn Minshew The New Rules of Work: The Modern Playbook for Navigating Your Career

Millburn, Joshua Fields and Ryan Nicodemus Essential: Essays by The MinimalistsE

Minimalism: Live a Meaningful Life

Susanka, Sarah The Not So Big Life: Making Room for What Really Matters 

For more resources, go to this page: Resources

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