Unexpected expenses, job loss, or medical issues can put a strain on anyone’s financial health. But nothing can ever really prepare you for financial disaster—it is truly devastating on so many levels. I didn’t fully realize that until my husband and I both lost our jobs in the same week in 1993. We had two children to care for, and suddenly we were struggling to pay the bills and scrambling to find new employment in a tough economy. The only thing that stood between my family and homelessness was a $1,000 emergency fund.
A lifetime of financial struggles
My story is a lot like the stories of many people I know. I didn’t just wake up one day and have my financial life under control. Instead, I spent years struggling financially—trying and failing to get ahead and realize my dreams in this life.
As a child, I learned what it was like to make every dollar stretch. Growing up in a proud and dedicated military household, living on a tight budget was normal. Although I loved my family dearly, I couldn’t wait to graduate, move out, and make my own way.
I was convinced that, financially, things would be different when I was finally on my own. I would no longer live from paycheck to paycheck. But, as many young people learn when they move out into the real world for the first time, adulting wasn’t quite as easy as I had hoped. My financial circumstances grew more difficult (and more stressful) once I was married and had children of my own. In fact, it was at this point in my life that things almost hit rock bottom.
A disastrous week
In my late 20s, my world turned upside down in just 72 hours. My husband and I both lost our jobs at the same time one disastrous week in May. Doug worked at a local construction company, while I was a quality-control inspector for JanSport, a backpack manufacturer located in Wenatchee, Washington. We were both extremely hard workers, but we could not outwork a declining economy.
Doug was laid off on Wednesday and, two short days later, I learned that my entire plant had decided to relocate to Mexico to save money. In the space of three days, we were without any means to support our family.
A storm of emotions
Courtesy Debbie Todd
As you can imagine, I didn’t react well to the news that both my husband and I were suddenly out of work without any prior warning. Who would? I wanted to find a place to hide, but that wasn’t an option.
I was scared when my husband got his layoff notice on Wednesday. I was still reeling from the uncertainty of how we would make ends meet when I walked into work that fateful Friday and was told our plant was closing. At that point, I was absolutely dumbfounded—angry, scared beyond description, and at a loss as to what we were going to do.
The sudden loss of both our jobs took a toll on my family as well. Doug, understandably, felt angry. It was also one of only three times in our entire marriage when I saw fear in his eyes. Our girls were young, so they didn’t understand what was happening at first. But as my husband was married before, he also had child-support obligations for my three bonus daughters. The situation was tougher to explain to them.
The key to our survival
Although money had been tight in our home for some time, our family had made a smart decision a few years earlier that saved us from disaster. It had taken us two years, but we managed to save a $1,000 emergency fund. At the time, that $1,000 emergency fund was equal to roughly six weeks of bills.
Without that emergency fund, we would have probably been homeless in short order. My family all lived in the Midwest—more than 2,000 miles away from us—so we didn’t really have family support as a backup option at the time. But having our emergency fund allowed us to pay bills for the next month. At the same time, we focused on a job search for my husband. We also assessed the options I had moving forward.
Stretching our dollars
The emergency fund didn’t provide a ton of cushion, but it was just enough. It kept a roof over our heads and food on the table. My husband filed for unemployment benefits as well, but almost all of that money went to child support. So, we spent our money more carefully than we had ever before. It was necessities only, and “on sale” was the order of the day.
Growing up as a military brat, I’d learned early on how to shop smart, clip coupons, and reuse and repurpose. I had a clear understanding of needs and wants. These skills and values were hugely beneficial to our family during this difficult time.
Don’t miss these tips on how to coupon, according to people who save thousands every year.
Courtesy Debbie Todd
In the end, losing all of our family’s income sources in the space of three days did not break us. It made us stronger. My husband went back to work to provide for our family. At the same time, he went to school to learn a trade that was more stable than construction. We were so tired of the work, layoff, scrape the bottom, claw back up, get laid off again cycle. We wanted a way out. Doug worked hard and got an associate degree in auto technology. And there was something exciting in store for me as well—a life-changing decision.
Our happy ending
Instead of hiding from my problems, I picked myself up and decided to help better my family’s circumstances. I was going to become a CPA and be the first person in my family to graduate from college. And there was actually a hidden blessing in this whole storm for me. Because my plant had closed down, I was eligible to go to school under the Job Training Partnership Act (JTPA).
This was a flashback and a second chance for me. Once upon a time, I had received a full four-year scholarship for accounting as a senior in high school, but I wasn’t able to attend college because my parents couldn’t afford my room and board. (At the time, I had three younger siblings still at home.)
When my second chance came, I grabbed it with both hands and ran! Was it humbling to ask for help from the state to better myself? Sure. But I was making a better future for my family for years to come. I have also paid that help forward countless times over in higher salaries, no layoffs, contributing time and money to the community, and sharing my story to help others help themselves.
Starting your own emergency fund
Now, I’m a CPA and the CEO of iCompass Compliance Solutions. I’m also blessed to be able to share my story, and my advice, with others through my business, 1 Hour Impact. Some of the most important money advice I share has to do with building an emergency fund.
I believe in the value of emergency funds because I’ve experienced firsthand just how critical they can be. Even if you can only afford to save five dollars a week, start saving. When you’re ready, you can speed up the progress by taking an honest look at your budget and trimming costs where you can.
You can hope and pray you won’t need an emergency fund, but you almost certainly will. You just don’t know when.
To get your finances in order, check out these 9 tips for creating a budget you can actually stick to.