The Unemployment Diet: How We Cut Our Spending By $1,000 a Month

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One Tuesday morning last November my husband called from work and told me to sit down—and not get mad. Whenever a phone call starts that way, you just know it’s not going to end well.

“(Insert jerk-of-a-boss’s name here) just called and said they were laying me off,” he said grimly. It was two weeks before Thanksgiving.

“What?!” I yelled. Oh, right: Don’t get mad.

Fired,” he clarified. Something about his employer’s (an insurance company) bottom line, in the red, downsizing, bad economy. But I wasn’t really listening anymore.

In a matter of minutes, I went from shocked to angry to petrified. How could they do this to him? To us? With no warning? He had been a good, loyal employee there for eight years, and in five minutes, he was gone.

They can’t do that, I thought. Can they? We should demand an explanation. We should get more of a severance payout (because conveniently for them, this was three weeks before end-of-the-year bonuses were due). We should sue. We should … Ah, hell, what’s the point, I finally rationalized. What’s done is done.

Now I had to figure out where we could go from there.

Re-evaluating Our Wants vs. Needs

I moved into “fix it” mode, which is something I’m really good at. “Well, we’re just going to have to cut back on a lot of things,” I said, already making a mental list (starting with that Caribbean cruise over Christmas break. And that yoga retreat with the girls. And my Starbucks addiction).

By the time we hung up, we were part of the millions of other American families who were newly unemployed and in a personal financial crisis, brought on by the larger societal one at hand. It was a scary position that I didn’t dream would happen to us, and it certainly wasn’t something we were prepared for financially.

While we had been working on beefing up our emergency savings, we were less than halfway towards our goal of having enough to survive for eight months (ironically enough, in case something like a layoff ever happened). But with me being a freelance writer, I certainly did not make enough to solely support our family of four (have you ever seen the grocery bill for two teenage boys?). In fact, I only brought in about 25% of our total income, so you can probably see why panic was setting in.

One thing I had learned in my personal finance travels was the importance of addressing your “needs” versus your “wants.” And when it comes times to saving money, you must cut those “wants” from your budget without a backward glance. Only the line can, admittedly, get blurry and emotional: I clearly needed those adorable new yoga pants, my Kombucha fix and my HGTV.

But with 75% of our income gone, there was no time for whining—from me or the kids, who were told upfront and honestly about the situation (I don’t believe in hiding things from them). They quickly learned that they needed to scale back too—everything from taking shorter showers to save on water, to holding off on new clothes to using their own money if they wanted extras (like a trip to the drive-thru).

I pulled up our online bank account and analyzed every single dime we spent over the course of the last year. After feeling completely nauseated over some of our wasteful habits and the fact that we didn’t have more in savings, I started slashing. Away went every “want.” Everything I truly loved and enjoyed, it seemed. But what choice did we have?

How We Saved Over $1,000 Each Month

Getting there wasn’t pretty, but in the end, we were able to reduce our expenses by over $1,000 a month for the four months that my husband was out of work last year.

Here’s how we did it:

  • Alex

    Kudos to you for taking charge during a difficult situation. Your advice is truly inspirational and timely during this rough economy. Keep up the good work!

  • Katya

    Most HGTV shows are online on their website. = Free
    As a matter of fact, most TV shows and Movies are online as well, which can help a lot of people spending too much on cable.

    • ANGEL

      AND YOU CAN WATCH THEM AT THE LIBRARY! FOR FREE USING THE WIFI!

  • SY

    Great work, I can’t imagine just how tough it must be to have a family of four and having to cut down. It’s brave and I really admire you.

    May I ask — how on earth did you get your cell phone provider to lower the family plan bill? Were you on contract or simply asked them to do it? I honestly feel like mobile providers are jacking up the price these days for 4G data and I’m thinking of cutting that down just out of principal. Heck, I have a smart phone and I don’t ever use 4G….yet I’m forced to pay that anyway. Ridiculous.

    Thank you for sharing your story, and good luck.

    • http://www.facebook.com/carrie.sloan.98 Carrie Sloan

      Hey SY, LearnVest actually published a story to help you try to lower your bill. Here’s a nine-step process and a sample script you can try when you call. Note: results not guaranteed!

      http://www.learnvest.com/knowledge-center/how-to-negotiate-for-a-better-cell-phone-bill/

    • http://www.facebook.com/profile.php?id=99000469 Anna Posekany

      I have Virgin Mobile unlimited everything (talk, text, data) for $45/month. Their coverage isn’t spectacular but the affordability more than makes up for it.

  • Lauren

    We had a similar reality check when we were suddenly raising 3 kids in NJ on a resident’s salary (which isn’t much). We got really good at clipping coupons and utilizing any store discounts we could (i.e. when my dad came to visit, I shopped on Tuesdays and took him along to get the extra senior citizen discount). We also cut out cable. We do Hulu Plus and Netflix, which have all the shows we love at a much lower price and they are portable. Even now that we are living in VA and I am making much more money, we still coupon, we still grab up the in-store sells (the bread they discount at the end of the week goes straight in our freezer and saves us about 75% of retail) and we still don’t have cable. We don’t miss it at all and are paying down the debt amassed by our custody battle and sudden parenthood.

  • thr1ftyg1rl

    instead of yoga class OUT, try Bryan Kest’s Power Yoga Videos at home…less expensive in the long run (3 workouts on one dvd) and a very good workout. Dr.Oz uses it as well, swears by it.

  • cocoachanel74

    Super! I am now on a four day work week due to government changes…naturally. So I had to do better. Thankfully, I had already started cutting the fat beforehand, about a year ago so I wasn’t completely downtrodden. I had cut out cable and some other wants and am now living on less and continuing to build my savings! . :) I am no longer taking my $$$$ for granted. Thank you for this. It can get old and depressing going this route sometimes. LOL…but this was an encouragement for me to keep it going!

  • Shannon

    Thanks for the article. I’m waiting for an article about someone who already doesn’t buy lattes at Starbucks daily, doesn’t go to yoga classes, doesn’t buy new books at the bookstore, doesn’t eat out twice a week, etc…how does a family trim the fat of an already fat-free life? How do you save money if you don’t have the money to waste in the first place? Get an extra job, I guess.

    • Havealwayslivedbelowmymeans

      You took the words right out of my mouth! I already eat at home, get books and movies from the library, have a cell plan for only $30 a month and cable (with HGTV) for $28, etc. Nothing in this article was new to me and those of us who haven’t been wasteful spenders…where’s the tips for people who already live money conscious?

      • Dawne Mulhollen

        exactly. I am just newly employed after buying a house just 2 months ago! Coffee? We’ll be lucky if we can afford the $3 store brand coffee. And you can still buy wine? The author of this article has no idea. I need advice for someone who has $50 per week to buy groceries for a family of four.

    • megs

      for realllllz. all of this was obvious. why do i keep clicking the links to these things?

      • disqus_mXcvCrOPVr

        You, like me, just want to see if there was one thing we missed.when cutting our expenses. Seems a lot of us already have conservative spending down to a science.

    • CH1EF_QUEEF

      Yup – we don’t own a TV, love to cook together and I already use the library and practice yoga at home. And who goes out to movies anymore? This article is for yuppies who already blast through too much money to begin with.

    • Paige

      Thank you! My thoughts exactly!!

    • mara

      Like you, I already do all these things but I have been able to cut more spending lately by doing some extra stuff (I am trying to put an emergency fund together plus pay cash for a used car)..here are some of the extra things…

      - Food (where I have been able to cut the most!) : we are already using coupons and shopping generic and all that but I have been trying to waste less produce by doing things like freezing chopped herbs in ice cube trays to use later, having my own little herbs and vegetable gardens (this has saved me TONS! of money), meal planning and prep (another big money saving!), buying drumsticks rather than chicken breast all the time (they are cheap and taste way better!), making green tea (really concentrated from tea bags then diluting it) and lemonade at home rather than buying it…those are just a few things.

      -Shopping: I was a MArshalls/Tj max/Ross/Forever 21 shopper now I go to consignment shops and I have been able to buy expensive quality clothing for a fraction of the price! plus take some of my gently used clothing to get some extra cash too :)

      - Fitness: I have been working out at home for a year and ..surprisingly..I have been way more successful than before. dailyhiit.com, ZWOW in youtube are my go to websites…free! and my home made snadbag saved me money on buying one online

      I already do the library, don’t have cable (netflix and redbox :), and hardly eat out.

      I am going to take this ladies tip and call my phone provider. As soon as my emergency fund is completed I am also planning on going for higher deductibles.

      I have honestly never had much luxury since I left my parents’ house so the changes are not “sacrifices”…plus I keep myself busy to avoid spending money our of boredom..some stuff even makes me extra income!

      So far I have completed my car fund and have a little than half of the EF…somewhere in there we need to save for a wedding to. Sometimes we feel we are crawling but at least moving forward :D

      OK..I got excited replying to your comment and now I am writing a whole other article hahaha

      • mara

        sorry for the typos :(

      • Tania

        Thanks for sharing the exercise site, I’m definitely going to check this out. I do have a cheap membership at 24 hour fitness ($25/yr) because I bought a lifetime membership ten years ago but since I moved to Maui, the location is not convenient for me and is so crowded all the time. I’ve been looking for some at home options. Gas is a killer here too $4.50/gallon so I hate to drive >20 miles to get to the gym on a Saturday.

  • http://www.facebook.com/blessdgal Katrina Jenkins

    For those of you who like yoga,you may be able to get free classes. I know that I used to clean the studio and check people for class. I was given free classes in exchange for my work.

  • Francesca

    It’s amazing what we can do when we are forced into a tight corner. Well done and all the best to you.

    • http://www.facebook.com/charles.cartagenaortiz Charles A. Cartagena-Ortiz

      If going from three yoga classes to two is amazing in your eyes, I wish I had your sight.

      • http://twitter.com/HealthyGarcia Tasmanian Minimalist

        Charles I was speaking in relation to people in general. For this author this way worked, for others it wouldn’t.

      • http://twitter.com/HealthyGarcia Tasmanian Minimalist

        I was speaking generally, plus what’s wrong with being supportive anyway?

        http://tasmanianminimalist.blogspot.com

  • ed180002

    I am appalled at the amount of money this author was wasting every month. Why should we follow her advice on anything? #clueless

    • Michelle

      is it wasting money if you have it to spend? As long as they’re saving for retirement, emergencies and college for the kids, then shouldn’t they be allowed to spend money on “fun” things?

      • JoP

        actually, the fact that in this economy they did not even have an emergency fund of one year, tells me that they did not have the money to spend on “fun” things.

    • http://www.facebook.com/wendy.shryocktokarz Wendy Shryock Tokarz

      Did you ever think to read the article and try to get something out of it instead of whining about how much money she spent. There are several people that live on the you make it why not spend it . I read these articles to try and get as much advice as possible . Maybe you should as well, But alas Freedom of speech

  • bill

    My family and I have been doing much of the same:

    Cable – gone: we watch next flix and Hulu for total cost of less than $20 compared to the $80 mo cable.

    Books – converted to ebooks: my daughter loves to read, just an avid reader. Many ebooks are free and at most we stay around the $4.99 rang compared to $19.99.

    ie. the lastest book I purchased: You are worth millions you just don’t know it – only $2.99.

    vacation – still have’em: we just spend more time doing things like camping. You spend less money, enjoy nature and spend a lot more time with the family (which is always good – they grow up so fast).

    I even use a suppermarket program that give me cash back for gas – and we all suffer from high gas prices.

  • Jaclyn

    My husband was out of work for 10 months last year and we survived by me working 4 jobs and cutting back on a few items. He was very appreciative of all my hard work. Now he’s back working with a job that’s even better.

  • http://www.facebook.com/carol.kieda Carol Kieda

    I agree with Shannon. Many of us are already saving as much as possible. I go to Starbucks for an expresso 2X per month.
    And their bagels w/ cream cheese are cheaper there than at my work. We now need to find “other” ways to save. Someone recently suggested going window shopping by leaving your wallet at home. Sounds like a winner to me.Carol

  • Dr. MAC

    Deborah, I just reposted your article on FB, and my cousin responded that they are cable and land line free and still watch HGTV. How? Her reply:

    Kenna Westerman We have a Smart TV and got the internet remote. You use the tv like the internet and go to their website and see all the shows you want.

    Great article, and love your website articles!!!

  • Amy R

    These articles to me are like the weight loss “miracles” where the person stopped eating fast food and cut out colas and dropped 100 lbs in 3 months. I read this woman’s situation and think “if only!” We’re already cut down to the bone in our budget, and need to cut further if we’re ever going to get off this financial treadmill.

  • http://twitter.com/HealthyGarcia Tasmanian Minimalist

    Horses for courses people,we all have our own way and individual lives,this was one way for one person.

    http://tasmanianminimalist.blogspot.com

  • Tania

    You can watch HGTV online. If you have a smartphone, there’s apps for that too :-) They also have a magazine if you can find it at your library. Btw, don’t feel too bad about the negative comments. We all have to start somewhere. You’re sharing your story, that’s all you can do. It’s easy to fall into the trap of spending here and there and that is something many people can relate too. Not every single piece will resonate with every single person.
    I see these kinds of comments on LearnVest all the time and I think the frustration is with the site and wanting a larger variety of personal stories.

  • mo Jet

    I am a bit perplexed as to why there are so many negative comments. At the income they were at, they did not realize they were being wasteful because there was a surplus of money. Once that income drastically changed, they were forced to look at their spending habits. It made them realize how their spending was excessive. It is great that they acknowledged the problem and made adjustments.

    My husband and I also went through this. Although I already used coupons, bought generic, and worked part-time, we still were careless spenders because the household income was very nice. But, once I became a full time mom, and my hubby took a 20% pay cut, our finances changed. We had to revamp our spending habits. We changed insurance deductibles, stopped cable and home phone for one year, cook at home, utilize local libraries, comparision shop for food, and walk to the store more in order to save gas. I signed up for many reward sites, and even do surveys at home. I also double check credit card and insurance statements, because believe it or not, I have found errors in calculations. The most recent was a $168 error on part of our medical insurance.

    So, for those who feel this article was not for them or only geared towards yuppies remember…..there is a family possibly looking at you too, wondering how you can afford a car, braces and bikes for your kids, jewelry to wear, even a cart full of groceries. In their eyes you just might possibly a yuppie too because they might view those things you have as excessive.

  • grace

    If you’ve been practicing yoga for a while, try going to a single class each week with a teacher you love. After the class, challenge yourself to write down the sequence and practice it on your own at home. This doubles as a memory strengthening exercise – the more often you do it, the better you get at it. This is something that yoga teachers often do themselves, though they probably don’t even go to class once a week…

  • J

    This author wrote about what worked for her. It’s true that we’re all entitled to our own opinion, but there’s a difference between stating your opinion and complaining/whining.

    I find that you can always review your budget and if you are creative you can always find ways to save more money. I think it’s all about perspective.

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  • Gigi Cake Shoppe

    I had to do the same thing when I lost my job a couple of years ago. Amazing how much you can save when you really look at the big picture and see where you can cut stuff. A lot of the stuff I had to cut, I don’t miss as badly as I’d first thought. I have a part time job now while I am starting up my own custom cake business, but I am really looking forward to quitting the part time job and working full time for myself !

  • cherfer

    I don’t drink coffee or take yoga, don’t have kids, and I work for the cable company so that’s free.. not sure what else to cut!

  • Ann Gonzalez

    I’ve been out of work since sept. 9th 2013 after 8 years of waitressing! I’m 40 years old. I have 4 adult children, 25, 23, 21, 20 & 3 young minor children 16, 11, & 4years old. I’m out of my savings of $9000.00 !!! I’m really scared! Invested money into Childcare learning, pretend, & activity play for my Childcare home innocent creations quality home Childcare. I’m not receiving any calls from parents needing Childcare! I am now doing surveys, & selling avon products, by handing avon books out, letting potential customers know that they also can order in the comforts of their home online http://www.youravon.com/anngonzalez. I so badly want to cut cable off, but can’t! Why? Because I need the high speed internet, & I was Dunbar for signing a 2 year contract for the security system that is $50.00 a month! I asked how much if I cut cable tv off? The comcast man said. $10.00 would be deducted from the bill more service less money, less services more money! I do not know what to do? I too have t-mobile with 4 phones. My phone bill was $400.a month! That was because of the $1588.00 on phones alone when I was working, bringing in $600,$700. a week! Now I’m living on $228 every 2weeks child support! My rent was $668.00a month when I was working. I reported I’m no longer working ,& within a month my rent went down to $71.00 how? Thank you God! We right now have section 8. One day I would love to own a house to call our home. I do not see this happening anytime soon. I feel like I’m drowning& putting on a happy face in front of my children. I am truly open to any ,& everyone’s advice!!!

    • Big Sarge

      Get another job waitressing, shouldn’t be very difficult to find one…