Have You Ever Lost Your Job?
Had a severe salary gut or lost a significant amount of hours at work? What do you do in this situation? It is very difficult for anyone to deal with, especially if you have nothing saved for these very situations.
Starve Yourself-
I have been toying with the idea of “financial starvation”. The concept is simple. The follow through is quite a challenge.
Let me preface this by saying, I do not make much money. I have debt. And I do not spend much money as it is. Even with these “challenges” in place, I still find money for the things I enjoy. I buy books, go out, and occasionally pamper myself in a few select ways. So if I were to lose my job, or lose a significant portion of my income, my (fully funded) emergency account would not go far.
The idea behind financial starvation is to remove EVERY SINGLE extra that you possibly can. In addition, you would have to cut every expense possible. We’re talking live off the land kind of starvation. It’s kind of a “what if” for the worst possible financial situation. Just the idea of it makes me cringe, but I also see it as quite a challenge. How well would I do if I were to remove every single extra in my life, and live as “simply” as possible?
Duration-
The length of time for a potential “financial starvation” period also comes into question. The shorter the duration, the more difficult it would be to truly experience the “rock-bottom” effect I would be trying to achieve. Not to mention that it would no doubt be uncomfortable…but probably more so for those around me than me personally. I would love to do a one-week trial run, but it seems too short to actually get the effect. If I really commit, a month seems like the right amount of time, but I would definitely have to run that by the Mrs.- and I’m not so sure that she would be on board.
Actions I Would Employ-
When I say starvation, I really mean it. We’re talking about eating the cheapest food on the planet, using the least amount of electricity possible, dropping the cell phone, canceling subscriptions to anything, including magazines and cable. You starting to get the idea? The goal with this plan is not to make more money, but to see what I could do with no (or almost no) money. As far as bills I already owe…well, I can’t do much about that. They would have to get paid as normal.
Should I or Shouldn’t I?
As I said, I am still on the fence about this idea. It could be fun, it could be a complete disaster. I guess the question I should really ask myself is, How much could this actually benefit or teach me? I feel as if I am pretty well versed in handling money and balancing my wants and needs. But I also feel that I can always learn more about both personal finance and myself. Would you try it? Why or why not? Should I try it?
I’m looking forward to some responses on this one!
{ 5 comments }
Wow – What a challenge! I would DEFINITELY run it by the Mrs. And possibly a few close friends. Maybe your parents. The latter 2 not for permission, but just as an FYI, what do you think, this is why I want to do it, you know. This is something that’s pretty… I think “severe” is the right word. It does sound like a fun experiment – but do you want to go cold turkey like that? I know this is supposed to mimic the absolute worst, but I feel like since you “know” its not that actual situation, you’ll have that feeling in the back of your mind. But maybe I’m just too good at justifying lame purchases.
Whatever you do good luck!
Here’s the thing…The Mrs. would absolutely hate this exercise. I, on the other hand can probably do it with almost no issue.
What I do not want, is for it to seem like I’m doing it to punish her or teach her a lesson. It looks pretty bad if I end up breezing through the “starvation” with no issues at all, and she is struggling at every turn.
If it is not even a challenge for me personally, is it worth it?
I don’t think you should just cut off all the cell phone, cable, etc bills. Instead I would shop around and see if there are better plans or offers from their competitors. Then I would call them back up and see if you can negotiate a better rate. If you cancel some of these bills, they might have termination fees associated to it. Then in a month when you turn everything back on they can hit you with installation or activation fees. I know my cell phone company will do this if I’m still under contract. You could also see if you can downgrade some of your services without canceling them entirely. For example going down to basic cable instead of expanded; removing extra channel packages if you had them; and dropping any unneeded cell phone plan extras.
For magazines I would look to see if they are available at the library so you can eliminate the expense entirely.
Shopping around is great, and really smart…but one of the main purposes of the exercise would be to see what I do not miss if I remove some of these things. I have a bare-bones cell plan, and I would never get rid of that because it would just be asking for some kind of emergency.
If I do go through with it (which is looking more and more unlikely) I would be very careful to only give up what would not completely put me out.
I haven’t had cable (or even basic tv service) for a couple years now and don’t miss it at all. The internet provides a lot as far as entertainment, and you can get that free if you have wireless and are a little creative. I think what you’d learn most from this exercise is how resourceful you can be with what you do have, but I don’t know that a month would be enough. Definitely worth consideration, but you do have to take all factors into consideration, including how this experience, however long you’d do it, would affect important relationships.
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