In our plan to Financial Independence the main goals are:
- Clear all debt starting with the smallest amount to build a nice big snowball to throw at the largest debts
- Initially save 1k (but eventually 5) as an emergency fund
- Invest a minimum of 20% of our combined net pay into a combination of stocks and bonds, beginning once debts are clear
Certainly achievable but what happens when life throws a spanner in the works?
By spending less than we earn these goals should be easily attainable and we have been plodding along doing just that. Still working on the debt but getting there. We will be on to the next step of saving the emergency fund in no time, and then our humongous snowball can go straight into investments.
A few days ago I had a meeting at work, we have them weekly to keep on track and focused towards the next steps, as is the norm in programme and project management. During this meeting I was told that the budget had been cut (again, happens often in the NHS) and my role no longer existed. I have 2 weeks left at work and then I am out of a job.
It sucks but it shouldn’t be completely detrimental right? We spend less than we earn and have an emergency fund to fall back on…except there is no emergency fund. We haven’t got to that point yet and have been so focused on clearing debt that we hadn’t thought to save something, anything at the same time. So here I am, scribbling furiously* and trying to plan a new budget whilst on my lunch break.
I’m not sure how it is going to work. We could survive on one wage (by the skin of our teeth) if we went down to one car, but living in the sticks makes it difficult to live without a car and with needing to take our daughter to school and hopefully attend interviews we definitely each need a car, so that’s out. On the plus side however it costs me nearly £120 PER WEEK for fuel and parking because of my crazy commute, so big saving there at least!
First thing first is to learn from past mistakes. Unlike when we were in debt before, we are not burying our heads in the sand and struggling along. We will contact everyone one of our creditors straight away and negotiate a lower payment, even if it is just for the short term. If everyone knows what is going on then we shouldn’t get to the horrible bit of constant phone calls emails and, god forbid knocks on the door.
Sometimes life can really test you, its certainly testing me right now. But it will be OK. We have managed to dig ourselves out of a HUGE hole before, and the finish line is in sight.
Have you ever been in a similar situation? I welcome any comments or ideas on how to keep ticking over in the interim, let me know guys.
*(I hand write all of my work and type it up as my way of proof reading and editing. Also means I am the person most likely to wander off with your pen. Sorry!)