**The following guest post is from my good buddy, Jeff! Jeff is a local fireman for our federal government, and talks first hand about how the sequestration has affected his family. He talks about the steps his family has taken to minimize the impact of this on his family's finances.**
Hello my fellow financially conscious friends, my name is Jeff, I’m a government employee, a proud new father, and finally, I’m a financial sponge that just survived the dreaded “Sequestration”! The word “Sequestration” just burns when it rolls off my tongue.
The first news we received of the furlough was back in February, my wife and I were contemplating her going back to work after completing her maternity leave. I was at home when one of our friends called us with the news that we were facing the possibility of losing up to 40% of my income. Just a couple weeks prior to this my wife turned down a financially lucrative offer to return to work. We had to seek God’s guidance on this decision because we were too emotionally invested to really clear our heads.
The options were: me taking a second job, cutting off unnecessary expenditures, or the worst case scenario living off our savings. This was a three headed war that was being waged in our family. First, my wife and I really wanted her to stay at home for the first year with our daughter. Second, how much we could we afford before we financially collapsed? Third, how are we going to be proactive to ensure our financial survival? This was a tremendous amount of stress to handle. If it wasn’t for our good friends, and a heaping dose of prayer I doubt we would have come up with the any solutions. For the first couple months there weren't any concrete answers on how the furlough would be administered. This only drove up speculation and rumors. In the mean time I sold my beloved Harley Davidson. In “MAN LAW” I had committed the ultimate offense, but the Harley wasn't paying my bills. Selling the bike was a no brainer for me.
In July the furloughs were set to begin and after numerous discussions we did come to a conclusion. I would use the two years left on my Post 9/11 G.I. Bill and go back to college. This served two purposes, first is I would be more marketable, and second the housing stipend would replace the income we would be losing.
Here are some action steps we took and some tips to consider when life throws you a fast one :
- PAY OFF DEBT – While I was getting a full paycheck we aggressively paid off any fluid debt, i.e. Hospital bills, credit cards etc. We also had a contingency plan in place if we needed it. EVERY FAMILY SHOULD HAVE A BACK UP PLAN AND A BACK UP PLAN TO THAT.
- HAVE OPEN AND HONEST LINES OF COMMUNICATION BETWEEN YOU AND YOUR SPOUSE. Finances can be tremendously taxing on a family so take the time to really invest in one another.
- SEEK ADVICE & DON’T GO AT IT ALONE— we reached out to trusted friends, they listened to our concerns and helped us keep the emotion out and focus on the numbers.
Now that the furlough is over my wife and I took an inventory of what we learned. NOTHING IS GUARANTEED. One thing we learned is our identity is not in what we have. Sequestration invigorated our passion for financial responsibility, while learning from our mistakes and successes. Despite all that has occurred in the last six months, I am thankful that Sequestration happened. Be alert, make solid decisions and stick to them, it takes a little discipline but it’s well worth it.
So this is Jeff's account of how sequestration has affected his family and the steps he's taken to minimize it's impact. How have you been affected or how do you prepare for income variations like this?