Tuesday, December 25, 2012

Our year of living frugally.....

     2012 was a transitional year for our family.  We had notice that my wife's job of 10 plus years was ending, and she went the majority of the year without working. We experienced a drop in income of 30% and this is the story of how we not only weathered the storm, but thrived during it.

     My wife is a independent medical transcriptionist, or was, or is, or I don't even really know how to describe her anymore, I mean she still has that skill set, but no longer works in that field. She was fortunate enough, for years, to have enough work from a single client that paid her handsomely, and allowed her to work from home.  Her schedule was her own to make, she worked the hours she wanted each day and told them the days she was and wasn't available to work.  It wasn't a great business model, being an independent contractor with a single client, but truth be told, there was always work there, so why develop other clients?  It worked, right up to the end of 2011, when that client told her that they would be moving their work to a larger transcription company in mid January and terminated her contract.  She interviewed with the larger company, but it would have meant going back to the bottom rung of the work ladder, working some nights and weekends for less money, so we collectively rejected that idea, and prepared for a period of unemployment while she looked for a more appropriate job for this time in our lives.  With that industry going to more voice recognition software, overseas transcription, and electronic devices for capturing data it was a shrinking field, so we hunkered down and prepared for an indeterminate period of unemployment, but I don't think either of us suspected it would be almost an entire year.

What my wife used to do.
     We were in decent financial shape to start off with.  Contrary to what our current President would have us believe, we have always had money in savings.  While we weren't quite at the 3 months salary that is recommended, we had money in the bank, a company bonus pending, and some tax money coming back. As a saving strategy, we've always purposely overpaid our taxes each year and get a refund of $5,000 or so.  It comes to us right after Christmas, right when the 2nd semester college bills are due, and right before our annual vacation, so it's nice timing.  A sharp money man will warn you away from this savings mechanism, as you actually have to declare the refund as income on your next year's taxes, but it has worked for us for years in spite of the additional tax burden.  My bonus, though not guaranteed, is earned regularly, and we are smart enough to not pre-spend it, so that went into savings as well.  We had our pot of money, we only had to figure out next how long it would last us.  We spent some time recording where our money went for the last year and developed a proposed budget for the family.  It was pretty easy to do, you look at the bills that you pay each month and record them against your
net income and then see what you have left over.  On  the first go-round, we just recorded what we had previously spent and that budget put us in the hole about $2,000 each month.  Next we paid off some short term bills like a credit card and the final payments to an orthodontist.  We then attacked the rest of the monthly expenses to see what we could reduce or eliminate.  We slashed our entertainment and grocery budgets, we renegotiated our phone and internet, we reduced our fuel and electric expense, and we put off some home improvement and car upgrades that were planned for the year.  We weren't Draconian in our cuts on the first round and we didn't plan a balanced budget for our drop in income, we compromised on a -$800 shortfall each month and pledged to keep to it.  Throughout the process we included the kids, living at home or not, in our plans and asked them to share in the pain.  We had created a solid, reasoned, logical plan and the only thing left to do now was to implement it, which we did.

     I have had 2 periods of unemployment in my life and I was bound and determined to be as supportive of my spouse during her time off as she had been during mine.  She never doubted that I would find work and the right job, just not any job, and I had faith that she would do the same.  I also wanted her to enjoy her
At dinner in London Ontario
time off.  She had worked continually since she had been a teen, so I encouraged her to take this break and work on some long term projects and to enjoy some of the travel benefits that came with my work.  Our company policy is that spouses can travel along with you as long as the additional expenses aren't charged to the company.  That meant she could jump in the car on any driving trip and stay in my hotel room in that city, and only pay for her meals.  Her work schedule previously hadn't allowed her to take advantage of this benefit, but in 2012, she was able to on several occasions.  We went to 2 Canadian cities, NYC, Boston, and even extended a trip to Phoenix a few days to drive up to Sedona.  We used hotel and car rental points, and Group-ons for meals and when necessary dipped into our savings to supplement our travel.  I'd place us centrally in the city and work during the day and she would walk and explore the parks and museums and we'd get together at night and compare notes.  She would drive to the cities allowing me to work on my laptop in the car, so I actually improved my productivity during these trips.  It was a win-win and it gave her a break from all the job searching.  I've often said that the hardest job I ever had was looking for one, and I think Char found that to be the case too.  She would check the job websites and papers each
In Florida at my nephew's wedding
day, she'd network with people and go to job fairs and interviews, but the right opportunity never presented itself.  We were looking for the right fit, a part time, flexible position and one that would not require a lot of travel.  The interviews kept coming, even a few job offers, but not what we were looking for, so we kept to our plan and kept enjoying the time too.  We even were able to spend half a week in Florida as a family (sans Molly) and attend my nephew's destination wedding there.  The year was quickly coming to an end and we were on pace to finish with money in the bank and with smiles on our faces.  We were truly blessed to have been given this opportunity. 

     In the end she secured work, and being the over-achiever that she is, it's actually 2 jobs.  The first is a flexible transcription job, not in the medical field this time, and the second is an administrative assistant job, part time and walkable from our house.  Incidentally, both were gained from networking with friends (Thanks Lisa and Bruce).  The pay is fair for both and our budget is balanced again, but more importantly, they both allow the freedom and flexibility that we wanted.  Nolan has 5 years of school left, and we want to be actively involved in them.  Her mom works part time, and is aging, so she'll have some time to spend and enjoy with her, just as I was able to do with my mom, and it's time spent that she'll never regret.  So in 2012, we tightened our belts, we trimmed some fat and kept our eye on the prize, but we also made sure to enjoy the ride.  Not a bad year at all, even living frugally. 


Judy Johnson said...

Great attitude and you're off to a great start for 2013 - not that anyone should be surprised. Happy New Year!

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