I posted the message above on my Twitter account around the time the recession first hit me back in 2009.
The day the hammer landed, I thought I was about to be commended on a job well done. Instead, my boss rambled on about the department not doing well and they had decided to let me go.
I was hardworking and innovative with great work ethic, and a team player. I was always on time and one of the last people to leave. Yet somehow I was about to be out of a job without warning.
But I haven't done anything wrong I kept saying.
Well, the recession didn't give a damn and my company certainly didn't care. It was all about the bottom line and I was costing them money. It didn't matter how awesome I was at my job; no one was indispensable.
I struggled for a long time and learned to adjust my life to the phrase, "Nothing in life is certain so always be ready."
I came out of the experience relatively unscathed, 15 pounds underweight, with the following 9 lessons engraved into my brain cells forever: -
- Always Have Money Stashed Away: I had little by way of savings when I lost my job. With no income coming in, the little I had disappeared fast. The amount of stress and anxiety I had to deal with between jobs affected all my relationships. Once I got back on my feet, this was the first thing I addressed. Giving up things in the short term is worth it to prepare for the long term.
- Always Have Mad Money Stashed Far Away: This is a cut above regular savings. This is money that will enable you to walk away from any crappy situation if it's starting to affect the quality of your life, even without another situation lined up. Mad money is why I was able to leave a soul sucking job and start my own business. Having mad money is a lot of sacrifice and financial planning but it is possible if you are willing to give up instant gratification for the time being.
- Pay Off all Your Debt and Stop Being the Bank's Bitch: A person without debt is free to make the best decisions for their life. As long as you owe the bank or credit card company money, you're their bitch. The sooner you get rid of all your debt, the faster you can arrive at mad money level and have choices about what you want to do with your life.
- Never Carry Over a Credit Card Balance. Ever: The interest rates on credit cards are more than enough motivation to get rid of this. If by some misfortune, you're unable to make the minimum payments, the speed at which the balance will go up is beyond alarming. You can live without a credit card. Live within your means. I'm sure you've heard it all before. Now do it!
- Always have a Plan B, C & D: Even though everything is fine, I still have a plan for several eventualities. For instance, what if I lose clients and it takes up to a year to sign up new clients? What if running my own business doesn't work out? What if I get sick and can't work? You see where I'm going with this. I have a plan in place for everything. Even if they never happen, I still like to know the contingency plans are there.
- The Difference Between a Want & a Need: A want is something that you can live without like more clothes, shoes, cable TV, a car, jewellery, etc. A need is something you can't live without like water, food and air. I was never much of a spend thrift before the recession but I had my impulse buy days when I picked up stuff without thinking about it. Nothing cures you of that faster than not knowing where your next meal will come from.
- Track All My Spending: I developed a budget sheet and started noting down every penny that came into and left my life. It's easier to identify where you're wasting money and control it with a tracking sheet. A budget sheet can't lie. If you're a spendthrift, it'll become obvious eventually.
- I'm Not Related to the Joneses: The Joneses have everything - money, perfect apartment, awesome car and they're your friends. It's natural to want to keep up with them, eh? The truth is no one knows what's going on in the Joneses life. They could be up to their eyeballs in debt trying to keep up appearances. I've learnt to keep up with my own life and purse. Just because a bunch of friends did something doesn't mean I have to do it to fit in.
- Never Forget the Pot Noodles: This is a personal point for me. When I was broke, I ate a lot of pot noodles. It was the cheapest thing I could get that didn't require additional components. Just hot water and I was good to go in 5 minutes. How much pot noodles did I eat? It was enough that I never want to see another bowl or pot of noodles as long as I live. Every time I'm about to do something stupid with money, I ask myself, "How many pot noodles did you eat during the recession again?"
It's been 6 years since I wrote that message and I now run my own business. However, the lessons have never left me and I continue to plan my finances within those parameters.
Don't get me wrong. I'm not a savings nutjob who never has any fun with her money. However, I do important things with it like indulging in my passion for travel, funding the cancer charity I opened in my mother's memory and expanding my horizons by taking a course - with a plan in place and within budget!