I'm the founder and CEO of a company in the wedding industry and over the last few weeks, like so many people, I have dealt with the loss of projects, opportunities, and income. Though the circumstances are different, this reminds me of 2015, when I was laid off.
I was in my mid-20s then and I wasn't the best at budgeting. Before I was laid off, I lived paycheck to paycheck and made the monthly minimum payment on my credit cards more often than I would have liked. But I had taken some small steps. I had started building up a tiny savings account and had recently opened my first 401(k) account.
I knew that I needed to get a handle on my finances, not just for the immediate future. I wanted to make sure if I ever found myself in a similar situation again, that I would be ready.
It took me several months to get a new job and that role paid less than the job I was laid off from. Still, I learned a lot from that layoff experience. While that period in my life was tough, it changed how I approached my finances, helped me grow an emergency fund, and informed my decisions when, in better times, I finally started my own business, Bridesmaid for Hire. I'm now a professional bridesmaid, acting as a support system for brides on their big day, and I have worked over 100 weddings.
Here is how I went from let go to CEO, and how I got good at money along the way.
After losing my job, I spent several days doing a complete financial inventory. I created a document that listed every bank account I had, every credit card and balance, my 401(k) information, and any debt that I had to pay off.
Then I began to look at how much I was spending, and on what.
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Before setting up a budget, I walked through each purchase and circled the essentials and put a star next to the things I didn't really need or would have to now cut back on. I also put a large red dot next to recurring items on my credit card that I didn't even realize I was still paying for, like subscriptions to streaming services and product boxes I thought I canceled months ago.
I realized that I was spending over $1,000 on nonessential things every month. If I ended those subscriptions and made a strict budget to follow, that was $1,000 every month that I could put toward essentials and my emergency fund.
In the past, I had very unofficial budgets that didn't last very long. After I was laid off, I had no choice but to change my habits. To make it easier to see where my money was going, I broke down my budget into three categories.
At the top of my list were the essentials that had to be covered every month, like rent, utilities, groceries, health insurance. After that came more variable costs like if I had to replace a household item or appliance, and transportation, since I wasn't commuting to work for the time being. And the third category was for larger costs, like a medical emergency and tax payments.
Seeing it all laid out like that made it easier to allocate the funds I knew I needed, especially for those potentially unexpected costs.
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I realized that I had been relying on my credit cards when I didn't have the cash for something I wanted or needed. But after I cancelled those recurring subscriptions that I didn't need, I decided to put my credit cards away for the time being.
I went to the bank and took out the amount of money I budgeted for the month and then split the cash up into envelopes labeled different items from the budget, like groceries and subway fare. It allowed me to stay in control and better optimize my budget for the next month because I could see what I had, and what I needed.
After I covered my essentials, I used the remaining cash to put into an emergency fund. I started with $500 and committed to adding as much as I could every month, even if it was only a small amount. After I started working again, I continued to contribute a fixed amount of my paycheck every month.
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Even though my layoff meant that my employer wouldn't be automatically putting a portion of my paycheck into a 401(k), I still needed and wanted to keep saving for retirement.
So I did some research and set up a SEP IRA — a retirement fund for those who are self-employed — and rolled over the money from my employer 401(k) account into it.
I also moved my money from a bank that offered 0.01% in interest every year to one that offered 1.6% interest. Even though I didn't have a lot saved at the time, the shift to a higher-yield savings account generated some funds that I could use to pay bills and put into my emergency fund.
Once I got a new job, I still used these strategies. Ultimately, my layoff experience helped me learn valuable money lessons for when I started my company. From day one as an entrepreneur, I forced myself to stick to a tight budget, search for free resources and find ways to cut costs without sacrificing service. That approach saved me thousands of dollars in the first couple of months of being a new business owner.
Now, even though we're navigating an uncertain time, I have the confidence that comes from knowing that I have the skills and the resources to work through it.
Jen Glantz is the founder and CEO of the business Bridesmaid for Hire, the creator of the project Finally the Bride, the voice of the podcast "You're Not Getting Any Younger,″ and the author of the Amazon-bestselling books, "All My Friends Are Engaged" and "Always a Bridesmaid for Hire."
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