How We Prepared for a Lay-off Part 1: B is for Budget

We all hope that the worst of the Great Recession is over. However, in just the past few months I can count at least 5 people that I know personally who have been laid off. That doesn’t make me feel very hopeful.

I certainly hope (and believe!) that most of you will not have to face the same thing. However, I’ve heard it said, “Hope for the best. Prepare for the worst.”

If you haven’t yet, it may be time to ask yourself if you are prepared.

We survived a year and a half of uncertain income without going into debt. It was the choices that we made prior to the layoff that truly made the difference for us. Unknowingly, we were ‘preparing for the worst’ since the beginning of our marriage.

While there are thousands of ways to be frugal, we wouldn’t be where we are today if it weren’t for these five BASIC decisions that we made before the layoff:

To begin this series on BASIC lay-off survival prep, let’s start with the letter B:

B-Budget
A-
S-
I-
C-

One of the best decisions we made early on in our marriage was to sit down with an older married couple who helped set us up with a budget. We were a double-income-no-kids family then and we could have spent our excess income very easily (new car, anyone?). But this couple helped us to see that we needed to set aside money monthly for future bills and begin to save for our futures.

We also made it a priority during the first year of our marriage to eradicate all of our debt and continually work to be debt-free. This was a life-saving move for us. If we had been weighed down by student loans or car payments or credit card debt throughout our unemployment, who knows what may have happened. We would have had to search for one of the best credit card for someone with no credit and be tight with our money. Thankfully, we can live comfortably.

Budgets often get a bad rap, but we know that we would not be where we are without one. (You can view our sample budget here.) If I’m being honest, there have been times that we have strayed from our budget and I’m always finding ways that I can do better at staying on track. But there is no better feeling than when I have a grasp on where our money belongs and I put it there!

How about you? Do you need to get a better grasp on your money? Have you had success/failure at following a budget? What tips can you offer those who are just starting?

Coming up next in the series: A is for Apartment.