Wednesday, February 25, 2009

A Financial Setback and How to Deal

I had to take my car in to be reinspected and have the emissions checked on Sunday. Unfortunately, my brake pads needed work and my muffler had a hole in it; as a result, I ended up having to go to another garage and spending just shy of one thousand dollars before I was able to get my stickers renewed today.

$1000 and a two day wait without being able to drive my car.

Luckily, I do have the money set aside in my emergency fund; I had hoped to avoid pulling so much money out so soon, especially as I am still unemployed and will likely need it in the future. Still, while this situation is adding to the stress of being unemployed, it's nothing compared to what I'd be suffering without an emergency fund. I've been able to forestall having to make more difficult choices, such as selling my stock holdings for a loss or floating the expense on my credit card, which will help me to get to sleep at night.

This has been a wake call for me. I had been assuming that I could ride out my unemployment without making any significant changes, that somehow all the horror stories and risks didn't apply to me. However, this car issue came out of nowhere, blindsiding me. If I didn't have funds already put aside, I'd be in serious trouble. As it stands, I've been forced to pull out money from my emergency fun, getting ready to pay the bills that will be due in the next few weeks.

From here on out, I'm going take on a few additional tactics to help make it through my unemployment:

1) Cut down spending
- I've been resisting this, but I need to spend less. I'm not a prolific spender, but I do a fair amount of shopping and impulse buying (perhaps too much), and if I am going to be unemployed for an extended period of time, I need to be able to stretch my emergency fund. I can't keep assuming that something will come along before I exhaust my money; I need to cut down my expenses NOW.

2) Increase my job hunting
- I keep searching, applying to jobs, calling to follow up, trying to see if anyone I've encountered in my past could help me to get a new position. But there's so much more I can do; if I treat job hunting like a job itself and spend five or six hours a day, I can canvass more ground. I've considered hiring a head hunter in the past; I might have look more into this avenue, and see how I'd go about hiring someone.

3) Stop my automatic investments
- This one is painful; I like investing, even now, when my mutual funds and ETFs seem to be down more often than up. But, while I still believe in the importance of investing, right now, the $300 I'm putting into stocks is probably better if held in my emergency fund. I'll have to put more in later, once I have a job, but for the moment, my priority has to be taking care of my expenses.

4) Look into more 'side hacks'
- I've found a part time job, running study sessions in organic chemistry, and have been approached by a few students to have additional, private sessions. It's not a huge amount of money (about $150 a week, all told), but it helps, and does allow me to network with some people in my field. I'm looking for more possibilities to get money from other sources, including this blog. I won't get enough to replace a regular salary, but every little bit helps, especially in an economic environment like this.

If I implement these plans, I should be in much better shape next time I need to tap my emergency fund for unexpected expenses.

How about you? What changes would you make if you were unemployed?

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