I used to work as a Linux Systems Administrator making a six-figure income.
Then I lost my job.
I remained unemployed for 18 months, but now I work in marketing with a salary of just $35,000 per year.
Coping with the Loss of a High-Paying Job
When I got laid off, I withdrew $5000 from my 401k — but that only put $3000 in my pocket after paying the taxes (blah!). I also immediately signed up for unemployment benefits, which pretty much covered my basic living expenses. When my unemployment extension ran out I began tapping into my savings.
That’s when it got really hard.
Nobody was hiring — and the expensive large loft overlooking Baltimore that I was living in was rapidly eating up my savings, so I moved into smaller suburban digs with a roommate. Losing the loft was especially tough on me; living in a warehouse was a dream of mine and I had spent lots of money renovating it before I was laid off.
Eventually, I was down to my last $1000 when a friend asked me to do some temporary consultant work for $50 per hour! Thank God for being techy!
So how did I cope? It’s funny; early one morning, not long after I lost my job, I was looking out my window overlooking the city, watching Baltimoreans scurrying around to get to their jobs and what not. That’s when I had an epiphany: Yes, it’s great to make money, but it’s all temporary — and for what?! Things that we don’t really need — most of the time. All that really mattered was that Jesus died for me and my life was in His hands and that I didn’t need to worry about my future, or present situation.
While I was unemployed, I tried to live like nothing bad happened. Rather than lamenting what I had lost, I focused on online marketing because I knew it was possible to make a decent passive income there! So I spent every day hustling online: learning, trying techniques, applying for jobs and working my butt off more than when I had a “job.” And then I spent my evenings with friends to avoid becoming a recluse.
Of course, I had a couple of breakdowns along the way, wallowing in tears and anxiety, but they didn’t last long and I was able to regain my hope and focus quickly.
Thankfully, I’ve always been financially responsible; it’s one reason why I never ran out of money while I was unemployed.
I now share a condo with my roommate. My new bedroom is smaller than my old loft bathroom, so almost everything I have is now squished in this tiny room — but at least the rent is affordable!
I used to stick to a strict budget. However, after I started making a lot of cash, I stopped thinking about the budget and looking at prices. Unfortunately, now that I don’t make a lot of money again, I’m still trying to adjust. At the moment, I have no budget in place. I just try to make sure that I pay all my bills as soon as I get paid.
I don’t like to shop, which helps keep my discretionary expenses down.
In my free time I hustle, spend time with friends, and meet new people. I also enjoy helping people with their business’s online presence.
I’m not saving for anything special at the moment, but I’m dreaming. I have an emergency fund that’s got about $2000 in it.
As for my retirement savings, I have $10,000 left in the 401k from my previous employer and I currently contribute 1% of my pay into my new 401k retirement plan.
Closing Tips and Thoughts
I try to keep focused on the things that matter and what I have. I’m not concerned with the latest fashions or trends. I don’t normally buy clothes. If I do, I keep it to single digit price tags. I refuse to spend double digits for clothes. I eat very simply when I’m home, usually rice and eggs with a glass of water. Sometimes I’ll buy more, but rice and eggs usually keeps me happy. I eat better when I go out with friends; that’s when I splurge a little.
Other than that, I just don’t spend a lot outside of going out with friends.
Looking back, going from a six-figure salary to $35,000 was quite an adjustment. But over time, learning to live on the lower income taught me that the old saying “money doesn’t buy happiness” is so true!
And after everything I’ve gone through lately, I like myself a lot better now too.
If you’re a household CEO who is successfully making ends meet on roughly $40,000 per year or less, I’d love to hear from you. Contact me at Len@LenPenzo.com and be sure to put “$40,000” in the subject line. If I publish your story, you’ll get a $25 gift card or 1 troy-ounce of pure silver!
Photo Credits: Tara