One of the things you learn when you live a life committed to being debt free is how to get by in tough times. We’ve had our share of lean years, emergencies, and layoffs and yet we’ve always managed to remain debt free. The worst time I can remember was after we were first married and were both working low paying jobs. I think we were making about $28,000 between the two of us. We didn’t have much in savings at the time because we hadn’t had time to build up much of a nest egg. I think we had maybe $2,000 in there. Then the worst thing happened (at least it was the worst by my definition at the time). My husband lost his job, leaving us with my piddly $13,000 income and no insurance.
So there we were, with no decent income, no insurance, and bills to pay. We were terrified. The easiest thing to do would have been to turn to our credit cards or to get a loan from a bank or our parents. But we did neither. We agreed that, if it came to eviction from our apartment, a medical emergency, or having to give up water or electricity, we would use the credit cards. Otherwise, we would get by with a lot of work and a severely curtailed lifestyle.
Fortunately, we had no debt and a cheap (read: small, dark and tacky) apartment so we weren’t starting out from a deep hole and trying to cover basic living expenses and a large debt load. But we had next to nothing. Our savings were gone within two months. Unemployment helped some, but not enough. Buying our own insurance was downright painful. So we buckled down and got serious. I got another job and my husband pieced together whatever work he could find. At one point I was working my regular job during the day, a part time job at night, and taking whatever freelance work I could get on the weekends. He had three part time jobs and spent every other free moment looking for work. We were working all the time, which was just as well because we didn’t have the money to do anything fun.
We cut everything we didn’t need from the budget. Out went the cable and eating out became a thing of the past. No more trips to the movies. Our weekend drives that we used to take for the fun of it were curtailed. The meals we ate at home got cheaper and smaller. We got better at using coupons and shopping the sales and “cheaper” stores in our area. We bought nothing that wasn’t necessary and that meant that our underwear had a lot of holes for a while. We became very stingy with the utilities, turning off every light when not in use and saving every drop of water we could. If there was a penny to be pinched, we found it and pinched it until it begged for mercy.
Our lives weren’t very fun that year. There were a few arguments and a lot of stress. We did not thrive, but we got by. It took about ten months for my husband to find work that paid well and offered insurance. We got lucky in that when he was finally offered a good job, it nearly doubled his previous salary. By that time I had a nice freelance business going on the side that I continue to this day. But that year remains one of the greatest teaching periods of our lives. We realized that we could survive hard times with a lot of work and sacrifice. To this day, when hard times come, we reflect on that year and know that we can get through. Most importantly, we learned that remaining out of debt was paramount to surviving bad times. Things were bad enough as they were; if we had had a towering debt load, I suspect we either would have lost everything or we would have incurred even more debt that we would still be paying off today.
We’ve since had other bad times and followed essentially the same plan each time: Work hard doing whatever will pay the bills and cut the budget down to the bare minimum. I was laid off twice and my husband was laid off one additional time. The roof and the heat pump had to be replaced in the same month, parents have needed support, and there have been a few medical emergencies that weren’t fully covered by insurance. But through it all we’ve remained debt free because we know that very little is truly necessary during lean times and we’re willing to work very hard to get back on our feet. During good times, we work to boost our savings and coping skills so that when the worst happens, we can get through it without as much worry.
The benefit to remaining debt free and committed to saving is that, as the years go by, emergencies and hard times take a progressively smaller toll on us. We have reached a place now where we can survive almost any catastrophe without going into debt. We don’t enjoy bad times, but they no longer terrify us. And that’s a good feeling.