New Game: Live like you're Unemployed

Naughty Boy by Brandi Milne
Near the end of 2009 I was fired from my job. It wasn't anything specific that I did or didn't do, it was just that the recession hit my company pretty hard and they had to downsize by about 35%. I was one of the newer people there at the time so I'm surprised that I lasted as long as I did but in the end. I lost my job.

At the time I received the maximum unemployment benefits allowed which I believe was $400 per week or $1600 per month. Depending on what part of the country you live in that might be more than enough to get by, but in San Francisco, that's not a whole lot. After I paid all of my fixed bills such as mortgage, HOA fees, utilities, internet (I still had to look for a new job so the internet was an absolute must). I was left with about $300 to spare for all of the other stuff.

Keep in mind that I said, all of my "fixed bills" I hadn't counted food for the month yet. For me, $300 is plenty to get by for a month, but if I wanted to do more than eat then things got a little dicey.

Because of the recession everyone was a bit scared of losing their jobs, it didn't look like employment was going to be picking up anytime soon, for me it took about 10 months to find a new job. At the beginning of my (f)unemployment I wasn't particularly worried about my financial situation, I had some money saved so I thought I would be okay for a while.

The first thing I did was.... Well, file for unemployment benefits, I think that only took me like 20-30 minutes to complete but after that... Well, after that I called up my brother and friends and invited them out to drinks on them on a lovely Wednesday evening!

It was time to celebrate, I didn't really like my boss there so getting paid to leave was a blessing (there were a few people I did miss though, some of my coworkers were cool and one of the owners of the company was a great guy). But after all of the immediate things and taking a little time to unwind from the frantic pace that I had been working at to try to keep my job. I settled into my new life with a fixed income that didn't look like it would go very far in the city that I lived in.

Even though it was only a fraction of what I was getting paid previously I found that it wasn't too difficult to get by. In fact, I found that I had a little extra left over while living off of unemployment checks by themselves. Oh wait, I hadn't paid for taxes on my unemployment checks yet so I was probably in the red by the time all was said and done.... But that's not the point of this story, the point was that despite only having a fraction of what I made before I could still live my life, and I didn't feel like I was sacrificing much.

Live like you're Unemployed

I learned what was actually important to me. Before I was unemployed I was an avid art collector, that was the first thing that stopped. It was an expensive hobby but it was 100% discretionary spending. But since I suddenly had lots of time on my hands and not a lot of money to spend I learned to cook for myself.* When I did go out to entertain myself I found myself going to the free days at the museum or street fairs. Being able to go places during the middle of weekdays (instead of work) really helps you hit the free/cheap entertainment.

Sometimes it's hard to see the upside to things while they are happening. Losing a job is definitely up there as one of those things that might not have a silver lining for most people. For me it ended up both good and bad, the bad was that after 10 months I ended up settling for the first job that came my way, you stop getting picky after a while. Luckily, I've moved on since that job. But the good thing was that I learned that I was still happy living off of only a fraction of what I was before. When I got a new job and had a similar income again I did have a little lifestyle inflation from my unemployment days, but it wasn't that much.

I think that was really the initial start to my more extreme savings. When I got back to work I suddenly saved about 35% of my income instead of the 12% I was before. Eventually I learned to crank it up a lot more but even if I stayed at 35% that would be a solid savings rate to be proud of.

Being fired was one of the best things that ever happened to me. It taught me about what I actually needed versus what was truly discretionary spending. It also taught me about what I thought was still worth spending money on even if I didn't have a lot of money to get by on.

I don't want you to get fired and learn this lesson the hard way, but if you can, try to live like you're unemployed. Even if it's just for a short time it might teach you a thing or two about what's important to you.

*When I say cook for myself I meant easy stuff like pasta and .... other types of pasta dishes, I'm no master chef!

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13 comments:

  1. Since I know I'll be unemployed starting next summer, I've tried to start living like I was unemployed now. I've definitely cut back on a lot of things, but I still have some work to do to get it lower before real unemployment starts. My biggest fear isn't actually the money though - it is being unemployed for too long and then just taking the first job that comes along.

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    1. Autumn,

      Actually I think for most people that read personal finance the hardest part will be the possibility of long term unemployment. That was the one bad thing about my time being unemployed, I took the first job I could instead of the best job out there.

      For most people they do this because they think they will keep looking for a job after they land the first one, it will make it easier and safer that way. I wish you the best of luck with your situation, I hope you don't have to settle and can just get a great job right away.

      -Zee

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  2. You mean sleep until 1pm and party until 3am? Sweet. Personally I hated being unemployed. I also hated being poor, which meant living like I was unemployed without the choice to do so. While I am still pretty frugal, there is a certain joy I get in being able to go to the grocery store and buy what I want or have a drink with dinner. A 50 cent soda used to mean checking slots of machines to see if someone left a quarter or taking our the neighbor's garbage just so I could put that overly sugared deliciousness into my mouth. Now I realize you aren't saying "live like you are well below poverty level", but again, it's all about deciding what is of value to you and what you can cut out. For me, being able to purchase food in any form without worrying is very important to me (probably because food was hard to come by as a kid sometimes) but clothes? Yeah, that's something I don't care much about. I also hate knickknacks and prefer travel over other types of gifts. A full life to me is about the experiences I have, not the objects I own.

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    1. Rags2Riches,

      You forgot the part where I eat Cheetos and play video games all day!

      I can see how some people would hate being unemployed, if they don't have something to do then they can get bored. I think that's where finding new hobbies and stuff to occupy your time will be the new goal. I think I would probably end up working at an animal shelter being a dog walker or something else of the likes. I love animals and that would give me something to do with a good purpose behind it too.

      You may not like being unemployed, but for me I don't like going to a job and doing something that I don't particularly like doing every day.

      I also know plenty of people that are unemployed and go out to dinner or drink soda. Those are important things in their lives so those take priority in them. I'm not saying that in order to reach early financial independence you have to give everything up, I'm just saying focus on the important things and let the other stuff go.

      If nice meals are what do it for you then keep doing it. What is life for if you can't enjoy the things that you love.

      -Zee

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    2. As easily as I get bored, for some reason I day dream often about giving up on my current life and moving to a foreign country where I would be challenged to learn a new language, live simply and without a lot of possessions, and do charitable work. It's not me being unemployed, but living simply and stopping the quest for happiness by playing the unhappiness game.

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  3. Very good idea Zee! Based on $1,600 after my fixed bills I would be a bit less at about $250ish. Not alot but at least I wouldn't need to spend so much money transporting myself just to work either. Heck I that it is essential to be able to survive on one income if you have to if you are married, especially if kids come around. If the job is gone you don't also want to lose your house as well!

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    1. Kipp,

      Yeah, not having a job does cut down on some expenses, I know that food became cheaper because I suddenly had the time to make more of my own, also commuting saves money too. It's all about just cutting out the non-essentials or the things that don't add value in your life.

      -Zee

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  4. Great story, Zee! Too bad you had to give up the art colecting, because you have a great taste. Love the pictures you use in your posts.

    I don't think I'd live my life differently if I became unemployed now, but I guess that's good thing. So far I've optimized my spending to the point that I could get by on unemployment benefits already.

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    1. No More Waffles,

      The main reason I gave up art collecting was because I ran out of wall space. The reason I started collecting art was because I bought a house and I didn't want it to look like a college student lived there so I forbid posters or anything like that. I still look at art online but purchases don't happen very often, I have different priorities now and things that I think are more important to me than overfilled (yet pretty) walls.

      When I do buy things I usually get cheaper pieces or they just have to be simply amazing.

      -Zee

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  5. When not working, I find that having greater access to discretionary time reduces discretionary spending. You can be fully rested, which reduces impulsive behaviour and you have more time to shop for deals at the grocery store. As you pointed out, you can also entertain yourself on the cheap by visiting museums and galleries when they are free/inexpensive and not crowded. I enjoy that pace of life. You can actually stop the rat race for a moment, be free to think, and appreciate what simply joys come about daily.

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    1. Having your own time and not needing to pay for convenience is a major reason why it's easier to lower your budget when you're unemployed. When I'm working I find it difficult to even find the time to do certain tasks, like making it to the bank or the post office when it's open is such a hassle when your working hours overlap theirs. I'm waiting for when I can make that a permanent change!

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  6. It may sound weird, but I have been living with this attitude for quite a few years. My sister and her husband, on the other hand, had to file for bankruptcy a few years ago because they were living beyond their means. She asked me how I live within my means and I told her that I always try to live so that if I were laid off, I would be able to afford my bills. As a single person, I only rely on my income and know that if I were laid off, I would not have another person's income to fall back on. She thought it was a good idea.

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    1. That's great that you've always had that mindset. I didn't always have that mindset, but once I was unemployed for an extended period of time it was easy to adjust to. Now I for the most part stay close to that budget anyways. I also think that being single helps, you learn not to rely on anyone else to bail you out if needed. I'm guessing that a lot of couples have the mindset that they will always have at least 1 income as the worst case scenario.

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