first things first: what should you do if you suddenly lose your income

First: I am so sorry that this happened to you. A sudden drop in income is rarely a happy occasion.

The good news is that you can mitigate the long term damage to you and your family's finances by cutting expenses immediately.*  Don't worry, I'll cover more of all the amazing fun things you can do for free in later posts. Cutting all of your bills honestly won't make your life miserable. It may focus you a bit. You might miss off-season raspberries but at the same time you will appreciate them when they are in season oh so much more. If you do the below suggestions you could easily cut your spending by $2000 dollars a month or more.

Some back ground - my husband and I both lost our traditional, stable, secure, government jobs in the first six months of our daughters life. Yeah, that happened. We live in San Francisco, arguably one of the most expensive places in the United States to live. Parenting list servs, of which I am a member, regularly had posts titled things like "How Does Anyone Live on $250,000 a year in San Francisco!" during the time we were working hard to live on about $30,000 a year.  I am not going to pretend that it wasn't hard - spoiler alert, it was hard - but it was survivable. And, honestly, we had a great life during those lean years. But, we cut expenses way down so that we could reach into our savings as little as possible.  Here are some of the things we did:


Apply for Aid 

Yes, apply for unemployment. Apply for food stamps if you are eligible. You have been paying into these systems and they are here to help you out now that you need a hand.  You will probably also learn that the unemployment office has a terrific work center you can use to make copies, search for jobs, etc -all free!

• Here's a California website with info on benefits: https://www.mybenefitscalwin.org/
• Here's another one - more San Fransisco specific : http://www.sfhsa.org/
• Here's the unemployment website for California: http://www.edd.ca.gov/unemployment/

Net value: + $1800 unemployment, + 400 - 600 in food benefits = $2200 - $2400 in $ you can spend on your expenses

Bills

Look at all of your bills and make sure you are getting the best deal. If something isn't necessary - cut it. I mean it - cut it. For all other bills look to see if there is any way to consolidate or cut costs. The more you save up front the better off you will be if this is a prolonged income reduction. If you are lucky enough to have a very short period of unemployment you may discover that you greatly prefer saving all the money you were spending.

In Order of Importance (mostly) 

Student Loans
Do you have student loans? It may be a good idea to freeze your loans with no interest and no payments due - you can usually do this if you lose your job. Alternately you could get on an income based repayment plan, which would knock your monthly amount way down.  Contact the lender managing your loans for details on what is available to you.
Savings in monthly spending = depends on your loan payment, can be $500 a month or more.

Credit Cards
Call credit card companies and get rates lowered if possible. If you have an offer for a rollover with zero interest you may want to to transfer that balance.  If you haven't lost your job then I would suggest you do all you can to pay off your credit cards, now. Also make sure you have the absolute lowest interest rate possible; this can be as simple as calling and asking for a lower rate. No, really.  And think about getting unemployment insurance for your debt.
Savings in monthly spending = $100 (savings depends on debt amount. We had no credit card debt - but if you do it is important to get the monthly bill reduced while you are unemployed. If you are working I suggest pay your credit card debt off asap.)

Health Insurance
There are a lot more options in the health insurance world, which is a great thing. You will likely want to take advantage of your company's COBRA just so long as necessary to stay insured while you search for a lower cost option. Your children are likely to be eligible for low or no cost excellent coverage - here in California it is Medical.You may also find that applying for coverage from providers,  like Kaiser, provides a great low cost option. Here is San Francisco we also have Healthy SF, a terrific very low cost program that can insure all SF residents. A good place to start is with the your local Human Services Agency (a social worker). They can tell you the steps you need to take to be eligible for different low cost plans.

• San Francisco's Human Services Page: http://www.sfhsa.org/
• California's Medi-Cal page: http://www.medi-cal.ca.gov/
• San Francisco's Healthy San Francisco page: http://healthysanfrancisco.org/ 
• California's Covered California Page: https://www.coveredca.com/

Savings in monthly spending = $1000 (Our COBRA costs compared to our Healthy SF, Kaiser & MediCal costs)


Car & Car Insurance
Are you keeping your car? Can you sell it? If you need it to work or to look for work - ie you live where there are no real public transit options, then keep your car. If you live someplace like San Francisco (transit rich) and your work does not require a car, consider getting rid of it. Cars are expensive. Estimated annual cost of ownership in California is $3966 - but I'd hazard a guess it's more if you live in San Francisco, land of parking tickets! Mind you - that is the cost of a paid off car, never mind if you have car payments. If you are keeping your car, audit your insurance and make sure you have the lowest rates (shop around!). 
Savings in monthly spending = $330  (Savings if you get rid of car, per the estimated annual cost, above. Savings is greater if you get rid of a car payment)

Cable
Cancel your cable. Really. Alternates: For $7 a month you can watch unlimited Netflix streaming TV shows and movies, for approximately 7$ a month (annual fee and not monthly) you can use Amazon Prime which also has a ton of free streaming TV shows and movies and includes free 2 day shipping on all Amazon orders as well. Hulu standard has free streaming - so even cheaper than Netflix and Amazon Prime. Equally as inexpensive is checking out movies and TV shows from the library for free. When we were unemployed we only did the free options - broadcast television websites play most episodes day after airing, Hulu is free and we checked out DVDs from the library.
Savings in monthly spending = $150 

Gym
For some things, like gym, I would do a cost analysis. The first three years of my child's life I was out of work and home with my daughter as full time care for her as well as managing the house, cooking, etc. One of the only ways I could get a small amount of time during the day when I was not watching my child was the extremely affordable child watch at my local Y - which also gave us a big break on membership while we were looking for work. I got a break and a work out and it was super affordable. We kept the gym membership. You might choose to simply go running instead. If you do think you want to keep your membership - see if you can get a price break.
Savings in monthly spending = $80

Phone
Reduce your phones - I'd recommend keeping a cellular and canceling your land line unless you have a good reason to keep the land line, in which case cancel the cellular. Audit your cellular plans and make sure you are getting the best aggregate deal for your whole family. We did this and ended up saving over $100 a month on cellular bills plus over $50 a month on land lines. That adds up!
Savings in monthly spending = $190

Internet 
You may decide to do away with your internet connection entirely and do all you internet-required work (job hunting!) from a local coffee shop or the library. If you decide you do want to keep internet at home, audit your bill, call you provider and ask for the lowest rate and then shop around. We got a lovely high speed connection for 30$ a month - introductory offer for the first 6 months.I call every six months to see if they want to extend that offer. So far: yes.
Savings in monthly spending = $25 


Other Expenses

Food
Cut your food budget in half and likely half again. Start making everything from scratch, this is easier than you think and cooking is a great lifelong skill. How else to cut that food budget? Eat way less meat. Eat in season - so no out of season berries! Buy in bulk. Buy on sale. Eat more beans. Eat more vegetable soups. Learn to bake bread. Learn to make pizza. Join a CSA (Community Supported Agriculture, literally, a local farm).  I'll cover this extensive topic in a later blog post - I promise!
Savings in monthly spending = $400 (depends on your food spending, savings can be considerably more)

Entertainment
Stop going out to dinner or meeting friends for drinks. Stop going to movies. Stop drinking coffee and tea from coffee shops. Instead invite friends over and make pizza or have a potluck; a super fun and inexpensive way to see people. Buy a thermos and bring tea or coffee along. Bring your lunch. Go on hikes. Once you get used to not spending and feel like you have developed the skill (it is a skill, you can get better at it) feel free to meet friends for drinks - just only have water. Or leave the credit and debit cards at home and only bring the amount of cash you are willing to spend. I would argue only do this for a networking event, have friends over and buy a bottle of wine or a six pack to share if you want a drink - much more cost effective!
Savings in monthly spending = $200 (savings will vary, can be much much more than $200)

Clothes
Do what I call 'closet shopping' and review everything in your closet. You will discover clothes you have forgotten. If you absolutely need a piece of clothing (other than underwear and socks) look at your local thrift store, try to borrow it from a friend, or see if you can organize a clothing swap with friends.
Savings in monthly spending = $100 (savings varies, but annually you can save thousands. I have a great friend who buys all his fancy designer brand suits from a consignment store. Saves a ton. Looks great.)

Books
Stop buying books. The library is your friend - check out books for free. You can also get many titles digitally for your ereader. You don’t need to buy one, you can download free ereader software to most smart phones.
Savings in monthly spending = $20 (depends on your reading habit.)

Movies
Stop going to the movies. Its super expensive. If you must, find a great local cheap matinee and buy no snacks. I can't tell you how much fun my daughter and I have at 7$ matinees now that we can actually afford to go to the theater!
Savings in monthly spending = $100 (that's one trip to the movies for three, so your savings may be much greater)

Hair
Stop getting your hair cut and dyed at a salon. In San Francisco you can easily spend $80 on a hair cut and $150 on coloring - so this can add up to big savings over the year. Use box dye or go au natural. Cut your own hair, cut each others hair. Find a terrific barber and get $12 dollar hair cuts - typically short hair cuts, remember! My husband uses clippers and does his own barbering for his sleek look.  I grew my hair out for several years and box dyed. Just recently I stopped dying my hair and asked my super awesome sister in law to cut it for me, which she did. She also cuts my daughters hair. So we are now at the very low end of hair costs.
If you have an interview and a hair cut/dye job will help that along, work with your salon to provide a better price, free trim, and a cut that will look good for a longer period of time. I know several salons locally that do this - so ask.
Savings in monthly spending = $115 (based on above costs, every two months, annualized)



If you look at what you were spending against what you are now spending you should see a large monthly savings just by making the above changes! 


I'll cover getting free stuff, bartering and trade and other ways to still obtain things you may need in later posts. 


Thanks for following along, and please share your cost saving tips! I'm always interested in learning new ways to save!! 


*If you haven't suddenly and unceremonious had a precipitous drop in income, think if this list as a great set of things to do to boost your savings monthly.

Note: I am not a lawyer, legal expert, or any other sort of financial expert. These are my opinions, that is all!