Bless me, personal finance bloggers, for I have sinned. This is my first time at confession.
I didn’t have an emergency fund before I got laid off, but I did have some savings set aside that I could dip into in case of an emergency. I had cashed in my savings bonds in December and put all the money into an ING Orange Savings account (let me know if you want a referral code!) where it could accrue some nice interest.
I was ok money-wise for about a month of my unemployment. I know what you’re thinking: but you’ve only been unemployed a month! Didn’t you get any severance pay? Yes, and yes, I answer you. I was only unemployed a month, and I did get some severance pay. But I still had bills to pay, groceries to buy, and a joint account to contribute to.
By the end of the month, I had to dip into said ING account. I needed $700+ to pay for taxes, and that wasn’t in my checking account. I needed $1000 to contribute to the joint account for rent and utility bills. Now my savings are seriously damaged.
I had to use my credit cards, too. Just before getting laid off, I paid $500 to each one, which I mentioned here, and was feeling pretty good. I regretted this decision when I realized another $1000 in my pocket would have been nice over the past month. I did my best to hold off, but as my checking account balance dwindled, and I still had things I had to buy (my train passes to get into work have been the biggest culprits, but wanting to do Easter baskets for mum, dad, and the BF didn’t help, either), so out came the card.
As penance, though, I have decided to freeze my spending as much as I can for the time being, at least until I get paid at the end of the month (just missed the payroll cutoff for this week) and put all of my unemployment money (if I ever get any *note to self: call the dang DUA*) back into my savings account to boost it back up.
I have also decided to change around my direct deposit allocations. $50 per month will go to a local savings bank, where I have a checking account, and pretty much just sit there as an emergency fund (since ING takes a few days). $100 will go to ING to my savings account. I plan to use this account for major purchases and/or events, which may include a new car, a wedding (not up to me on the timeline for that particular event), or a down payment on a house. This account might be split into three distinct areas for said major purchases/events, but that’s pending a discussion with the BF when both our finances rebound a bit. The rest of my check will go straight to my checking account for bill paying and discretionary cash.
And once I’ve evened out a bit more (read: after the end of this month, once all my bills are paid for the time being and I’m earning a steady paycheck again), I’ll get my debt snowball crackin’ in earnest. I still want both my credit cards paid off ASAP and would like to clear out some of my smaller student loans shortly thereafter.