How a Series of Layoffs Led Us to Disciplined Financial Stability

Getting laid off is stressful.

The first time it’s completely shocking. The second time it’s very concerning. By the third, you start to wonder if you’ll ever find stability. This was my reality for the first few years after graduating from college.

No one plans to get laid off, but chances are it’ll probably happen to someone in your family. Whether it’s because the company lost a client, the earnings report did not meet the forecast, or the economy tanked, your position could be lost in an instant.

After two post-college internships, I got my first real job. It was exciting to feel like an adult and get my first real paycheck. Up to this point, I was living with my parents.

I waited until I had been at my new gig for three months before moving into my own place. While I didn’t make much, I was proud to be able to pay the bills all by myself.

This was in the fall of 2006. Little did I know, the economy was about to take a turn for the worse. When 2007 rolled in, rumblings of a recession were flying around, which I completely ignored. Being young and naive, I didn’t realize how a recession could affect me. While I was able to pay all of my bills, my salary was pretty low, so I wasn’t able to save much money each month.

The First Time the Bottom Fell Out

It was May 2008, and rumors of layoffs were making the rounds at my company. Since I had just spent a couple of weeks in Europe, I missed the latest news to hit the rumor mill. Upon my return, I was sick with bronchitis for a few days, so I didn’t make it into the office until the beginning of June. The next day I was given my first layoff notice.

Needless to say, I was devastated.

My boyfriend and I had gotten engaged in February and were in the midst of planning our wedding for that fall. We were paying for almost all of the wedding by ourselves with a little help from our parents.

Fortunately, my fiancée (now husband) was a natural saver and had a good stash that was helping us cover the wedding costs. The rest we paid as we went from our paychecks.

The layoff left me blindsided. My expenses were fairly low, so my unemployment benefits helped me cover the essentials. This was also my first lesson on the power of networking. A former colleague helped me land another similar position a month later. I often freaked out that first month of unemployment and worried about my financial future.

A Wedding, a Honeymoon, and a Pivotal Financial Decision


The wedding planning continued full speed ahead as I settled into my new position. We were still able to cash flow all wedding and honeymoon expenses. Since we love to travel, we spent a large chunk of our wedding budget on our two-week honeymoon in Italy.

When my fiancée’s lease on his apartment expired at the end of June, he moved into my tiny one-bedroom place. This helped us ramp up our savings even during my layoff. We got married that fall and continued living in my apartment through the end of my lease in October.

We had spent the majority of our savings on our wedding and honeymoon, so we started our marriage with exactly $2,000 in our bank accounts. The good news was that we didn’t go into any debt for our wedding and honeymoon. We kept the costs down, shopped for deals, and cut corners where we could.

The bad news was that we were starting from scratch financially. We both still had student loans and drove old cars that required costly maintenance. Having experienced a layoff at such a young age left us unsure of what the future may bring.

The recession was in full swing at that point and more and more people were losing their jobs.

My natural tendency is to be a spender, while my husband is a saver. Because of the economic uncertainty we were facing, we decided to live only on my husband’s salary. We didn’t know it at the time, but this decision would be pivotal to our financial future. It was difficult at first to ignore my paycheck, but we gradually adjusted.

More Layoffs on the Horizon

It was December 2008 and my office held their annual holiday party at a local comedy club.

My husband and I couldn’t quite believe our luck when we found out we would be watching Jimmy Fallon do stand up. It was one of the best holiday parties, and we had a great time.

The following Monday I was laid off for the second time.

If you were counting, I had only been at my new job for six months. It was devastating to get laid off twice in less than a year. The only comfort I had was that we had planned on not needing my salary. So we were still able to pay our bills out of my husband’s salary and save my unemployment benefits.

This time it took me longer to find another position. My industry had been hit hard by the recession, and budgets were getting cut left and right. Many people had been unemployed for months with no end in sight. It took about three months before I got a temp-to-hire position. It wasn’t a great fit but it was a paycheck.

Our decision to live on only one salary was paying off in more ways than one. Earlier that same year, my car’s air conditioning had quit working. It was going to cost as much to repair it as the car was worth, so we decided to look for another vehicle. Since we live in the South, going without air conditioning was not an option.

We were able to put a $10,000 down payment on a gently used 2009 Toyota Camry. Even though we had to take out a loan for the remaining $10,000, we paid it off in 10 months. Because we lived on one income, we were able to write a check for $1,000 every month that went toward paying down the loan.

You Guessed It – Another Layoff

By this point, I’m sure you won’t be surprised to find out that I got laid off for a third time in December of 2009. We continued to live below our means. While this was stressful, we were doing okay financially.

This was my third lay off in two years, which made me wonder if I should switch industries. At the same time, I realized that if I wanted more stability, I needed to make the move from working for agencies to the corporate side.

Networking paid off yet again, and I had a new gig by February 2010. My new office was very small, but I loved my co-workers and the company culture. We finished paying off the car and continued saving one income and living on the other.

Once we finished paying off the car, we started building out our emergency fund. While we had a couple months of living expenses saved, history had taught us that wasn’t enough. We stashed away all of my earnings and built out a healthy emergency fund that could easily cover six months of living expenses.

Home Sweet Home

We realized that the recession had made real estate more affordable, so we started looking at houses. While there were plenty of deals, our target neighborhoods were still a little out of our price range. We were determined to find a house we could afford on one salary even though we could qualify for a higher mortgage.

This was difficult at times as we struggled to find any options in our dream neighborhoods. We knew that if we just included my income into the calculation, we could buy a nice house in our favorite area. However, we stuck it out and kept scouring real estate listings daily so we didn’t miss any deals.

We looked at house after house with one issue after another. Many of the houses were old and had foundation issues. We live in a part of the country that has clay soil, which means foundation problems are a fact of life. However, we knew that those could get expensive pretty quickly, so we ended up passing on a few houses.

After doing some research and talking with our real estate agent, we decided to get pre-qualified for a mortgage loan. This way we could be in a stronger position to put in an offer. When we finally found a deal on a house in our dream neighborhood a few months later, we were able to move quickly.

While it was a buyer’s market, our area of the country was not as affected by the real estate bubble. The house we wanted was still a good $30,000 over our budget but we weren’t deterred. Against our real estate agent’s advice, we put in a lowball offer and waited. While I really wanted the house, I wasn’t willing to break our budget. After some back and forth, we got the house while sticking to our budget.

The Pay Off Plan

When we bought our house, we paid 10% down and got a mortgage for the rest. While we could have put more toward the purchase, it would have drained our emergency fund. Experience taught us that you never know when you’re going to need it to pay the bills, so we didn’t touch it.

While we had found a house without foundation problems in our target neighborhood, it was definitely dated. It had a great layout as well as dropped ceilings, wood paneling, and linoleum floors. Even though we would have loved to remodel and update it, we knew that would require taking out loans.

Instead, we grabbed our paintbrushes and painted every square inch of wood paneling. It was much cheaper to do a few quick cosmetic fixes and live with the rest. We sat down and made an ambitious plan to pay off our mortgage in five years.

In all fairness, we were already living on one salary, so this wasn’t as much of a stretch. We also got a great deal on our house and live in a part of the country where houses are more affordable.

Using our plan, we threw every extra paycheck at our mortgage, furiously bringing down the balance. My husband created a budget that helped us stay on track as we inched closer to our goal.

Our strategic decision to live on one salary has paid dividends over and over. We felt more financially stable and knew we could handle financial challenges.

Shortly after starting our house payoff plan, we had to replace my husband’s car. Just like with my car, we put a $10,000 down payment toward a used car purchase and paid off the balance in less than a year.

The Bottom Fell Out – Again

Fast forward a few years and you will be shocked to find out that we faced another layoff. By this point, we had a little less than a year left on our house payoff plan. However, this time it wasn’t me who was facing a layoff; it was my husband.

One of the good things about this layoff is that we knew in advance it was happening. My husband’s employer decided to close down his branch. However, this took a few months and they gave everyone advanced notice. This allowed us to make plans as we faced yet another job loss.

This latest layoff turned into an opportunity for us. Because of our good financial habits, we had adequate savings to cover our expenses. Additionally, I had gotten a corporate job, so I wasn’t too worried about getting laid off again.

My husband wanted to start his own business, and this layoff was an opportunity to pursue his dreams. He split his time between looking for another position and getting his business off the ground.

It took six months of hard work before he made any money from his new venture. However, the moment he made his first dollar, he realized this is what he wanted to do.

While this may have seemed like luck to many people, it was the result of building good financial habits. When other people barely covered their bills on two salaries, we consciously made the decision to spend less.

We lived on one salary and used the other to create financial stability.

Even with this latest layoff, we were still able to meet our house payoff goal. It took right under five years for us to completely pay off our mortgage. This required making trade-offs such as buying a smaller home that was not renovated and putting in some work ourselves.

We had to defend our choices to family and friends, but it was worth it in the long run.

The Value of Financial Stability

financial stability

We didn’t set out to live on one salary. In fact, as the spender in the family, my main goal initially was to not rack up credit card debt again. Being young and naive, it had never occurred to me that I may actually lose my job because of the recession.

Experiencing three layoffs in less than two years completely changed my mindset. It felt like the rug had been pulled out from under me. Spending money on clothes and shoes took a backseat to the need to feel in control financially. While having fancy things was nice, paying our electricity bill was a higher priority.

Every person has a different reaction when encountering financial hardship. When we faced a loss of income not once, not twice, but three times in a short period, we decided to focus on saving.

We realized the power of our combined finances. Two people could live almost as cheaply as one so we took this as an opportunity to live on one income and save the other.

This has been the single most important decision in building our financial stability.

However, we didn’t just let the money pile up in our account. We gave that money a purpose — to keep us out of debt. The more money we owed, the more vulnerable we were if we lost our income. We decided to limit our debt exposure by single-mindedly attacking our debts.

When we first got married, neither one of us made more than $50,000 a year. In fact, in my first job after college, I was making around $32,000. However, we were still able to pay off a car loan in less than a year and save for a downpayment on a house.

The Bottom Line

While making more money would be nice, it’s also important to evaluate whether you’re using your current income as well as you could. Having a bigger place or a fancy car is not worth losing sleep over the possibility of a job loss.

We didn’t let commercials and peer pressure sway our decisions on how to spend our own money. Instead, we made a conscious decision to use our income to build financial stability. This allowed us to make choices down the road based on our values and long-term goals rather than on how much money we owed.

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