I thought Lance’s article on surviving a layoff contained some real quality advice, so here’s my two cents. The best defense, they say, is a good offense, so I’m going to focus on what the BF and I are doing now to ensure our financial future whether or not we get laid off. The two biggest expenses we have are our debt (credit cards and student loans) and our house, so our plan is twofold:
- Maximize our debt-payoff strategy, and
- Minimize our monthly expenses
Maximizing Debt Payoff
I recently mentioned in a comment on a previous blog post that I owed around $10K in credit cards. I have had a couple of minor windfalls lately and will soon be below $7K, all of which will be on one card. The BF is currently transfering things around to get the best promotional APRs on the balances that he has (when it is worth it, depending on balance transfer fees). Despite lowering our interest rates and balances via one-time things, we do not intend to lower the amount we are paying towards our cards; we are just trying to get more of our current monthly payment amounts going toward the principle.
At the rate we are going now, we will have all our credit card debt paid off within three years (we have not been making any charges on these cards for some time now). Then we can go from paying with our check cards to charging everything and paying it off in full every month, which will increase our credit scores. The goal, of course, is to never have credit card debt again now that we are no longer full-time students.
Minimizing Monthly Expenses
After lots of discussions of our monthly expenses, we decided the only real way to make an immediate impact on our monthly budgets was to move. So, the BF and I are moving to Tempe! Benefits and savings:
- I will go from an hour commute each way to about 10 minutes. This will save time/gas/money even if I continue to drive to work.
- I will also be on a bus route and, for the cooler part of the year, within biking distance. So I will investigate those possibilities – one of my employee benefits is a discounted bus pass and it would certainly be worth the one-time layout of cash to buy a bike (I used to ride all the time, but my bike was stolen and I never replaced it). If I have reliable alternate ways to get to work, then I can stop having $27 taken out of each paycheck to park in the garage. Not to mention it’s more green!
- The new place has all the grocery stores we go to nearby and LA Fitness is jogging/biking distance. So these will be gas savers as well. It’s also motivation to work out more since we are currently so far from the gym we hardly ever go.
- We are going from $1450 per month in rent to $975 and cutting two utilities out completely (water/sewer/trash is paid by the complex and our current place has gas and the new place doesn’t).
- I expect we will save money on electric as well, since the new place is 1) smaller and 2) one storey instead of two.
We found out from our leasing agent that our rent doesn’t even cover the landlord’s mortgage, but the market here is so bad we were able to drive a bargain and the landlord is just happy to have someone living there.
It is probably 300 square feet smaller than our current place and we are losing one room entirely (right now we’re in a three bedroom), so the next step is to get rid of as much stuff as possible. Here are some of the ways we have tried to turn this downsize into a money-maker:
- We have made about $200 so far selling books and DVDs on Amazon.
- We are also going to try and sell some furniture and larger things on Craigslist.
- Whatever doesn’t sell goes to Goodwill for the tax writeoff.
I think this is a perfect time to get rid of as much stuff that we don’t use or don’t like or can’t fit as possible, since our next move will probably be an upgrade and by then we will be able to afford really nice things (or receive them as wedding presents!). Plus it’s good karma in this economy to sell things that you don’t need cheaply or to donate them to charity. We have lots of things that are perfectly usable that we don’t use.
On a Personal Note
I’m so excited because our new place is absolutely adorable! It is a condo, about 1100 square feet, and has a living room, a separate formal dining room, a kitchen, two bedrooms (each a master with a walk-in closet and a bathroom), and an inside laundry room with washer and dryer included. We also have a private patio/backyard area big enough to fit the BF’s fancy grill (he put it together himself, just months before going veggie…). Some highlights:
- The back bedroom (which will be ours) has double French doors going outside into the backyard.
- The front bedroom (which will be a spare bedroom/study) has double French doors off of the living room.
- Inside the spare bedroom are built-in bookshelves, a window seat with storage underneath, a built-in desk with more shelves, custom bathroom with saltillo tile and a painted sink, and custom after-market shelving in the walk-in closet.
- The kitchen has saltillo tile, a new refrigerator, hanging lights, and lots more cupboard space than we have now. It’s also more useful cupboard space, as the shelves on some of them pull out and another one has a built-in lazy susan.
- The dining area has room for both our dining room set and, because it is next to the kitchen, bar space for our two stools. The dining room has recessed lighting and also a huge skylight.
- The living room has a working fireplace (again, saltillo tile) and a wall-mounted flatscreen tv (yes, the tv comes with the place). It is also big enough to put a desk in the corner and have another working office area.
- The laundry room just got new flooring and everything looks clean.
The complex seems really quiet and is super cute, with grass landscaping (kind of a rarity out here) and a pool. It is also right across the street from a park, which is great for the dog (none of the other places we looked at were super dog-friendly). Most of all, though, I am excited because it is a place the BF and I picked out together (the current place he picked without me) so it will really feel like it is ours. The place is ours starting March 13. I can’t wait!
Final Thoughts
The key to either maximizing your income or to minimizing your expenses is the same: be proactive and don’t be afraid of change. It’s easy to let inertia get the best of you, but there are definitely benefits out there to be had if you’re willing to put in the effort. What have you been doing to weather this financial storm?
If this post made you wish your place was as cute as mine, you might also enjoy: