Logic would mandate that there is no better way to gauge your preparedness for an emergency then actually experiencing said emergency. (It worked well for BP and the whole gulf oil spill crisis, right?). While my emergency action plan did not have to account for any environmental impact on walruses (research BP's plan and you'll get that), it did have to account for supplementing my expected unemployment benefits. Allow me to expound that point: plan to supplement your unemployment rather than planning to live off your survival fund and you can extend the solvency of the fund. Thankfully I had a very good idea that unemployment would be a strong potential in the near future, and I was able to save the equivalent of four months of expenses with another four months locked up in 180-day CDs.
From the time that I starting prepping the survival fund, I knew that I would not be able to maintain the expenses commensurate with my current lifestyle. The Country Club membership and the yacht payments both got placed on hold. Okay I don't live that kind of life, but I have plenty of expenses that cannot be justified if the income is drying up. That raises a novel idea: Stop spending money! (I really wish I could scream that loud enough for Washington to hear).
I had to plan to survive on $1,200 a month and whatever supplemental amount would be required from my survival fund in order to cover mandatory expenses: utilities, rent, car payments, cell phone, internet access (bet you thought that would be cut, but how else would I conduct my research and job search?). With rent accounting for roughly 50% of the UE benefits and the car payments taking up another 40%, I quickly figured the leftover amount would not comfortably cover the remaining expenses. Enter Plan A: the Survival Fund. I am now in Week 8 and have just made my second withdraw from the fund. I've been able to hold off this long by reducing spending on unnecessary items and placing memberships with monthly recurring charges on hold. I really feel for those who are caught by surprise with UE and don't have a survival fund in place. Generally they turn to Plan B: charge everything to the credit card. I have used the credit card for major expenses that have popped up, and send a small payment monthly to keep them happy, but I wouldn't advise the credit card as a primary means of survival. I would much rather survive the winter wearing a sweater in the apartment with the heat turned down then, try to resurrect my credit score once the employment situation is rectified.
So do I live like a church-mouse? Heck no! I'm just frugal (I said frugal, not cheap!) with my money and try to plan all of my errands into one trip rather than multiple trips during the day. And wouldn't you know it, Christmas decided to pop up right in the midst of UE! No way the nieces and nephews are going to be left out of my budgeting.
A final point to raise and it's purely a personal budgetary decision, but I caution to not stop your tithing. Certainly reduce in order to align with your new temporary income level, but do not skip out on this important responsibility. There are plenty of people in more dire situations than you, no matter your situation, and we are called to support those charities that help the neediest of our communities. Always remember how far the poor widow's two coins went in the Kingdom of Heaven (read it Luke 21:1-4).
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