Having spent the first part of my career in the corporate world, I’ve watched hundreds of people navigate unexpected layoffs. It was heartbreaking to watch and devastating for those experiencing it firsthand. Then not that long ago, a friend mentioned that his wife would be losing her job the following spring. Rather than being devastated by the layoff, they seemed to welcome this unexpected change with eager anticipation. And by eliminating debt, they not only survived but thrived during the unexpected.
I was so inspired by their journey that I asked if they’d be willing to share their experience with a larger audience. I’m grateful they agreed and hope that John and Lisa’s story helps you believe that eliminating debt and financial freedom are attainable for you too. Please enjoy John’s encouraging words and wisdom about life after debt.
Most people are pretty scared when they experience a layoff. It’s ingrained in our culture to identify our self-worth with our paycheck. But in reality, most of us are living just a paycheck or two from a crisis.
That’s absolutely where we were when I (John) experienced a layoff in 2013. We were terrified. We didn’t know where our money was going, much less where it would be coming in from. Even after that crisis passed and I found a new job, I never shook that feeling of panic.
Two things happened when I lost my job. First, I became painfully aware of how much money I had wasted on stuff that didn’t matter to me. I sat there with a legal pad trying to figure out how we were going to pay bills that month and my shelf of unwatched DVDs started to look like a wall of 20 dollar bills I would never get back.I realized that none of the stuff for which we had gone into debt actually brought happiness or fulfillment. They didn't then and I know now that they never will. @JohnSQuast Click To Tweet
I realized that none of the stuff for which we had gone into debt actually brought happiness or fulfillment. I believed the lies that driving a certain car would make me feel like I’d “made it,” that having the newest toys would bring me joy, or that going to all the best shows and eating at the trendiest restaurants would make me feel content. They didn’t then and I know now that they never will.
Second, the support and encouragement I received from my wife, Lisa, made me realize that I’d always had the fulfillment I was grasping for; I was just ignoring it. I began to rely on God and my wife for contentment, not the image I projected with material possessions. I realized that loving people and connection brought joy, not toys or experiences.
I asked myself why I was letting this stuff get in the way of doing the things that bring me real fulfillment. What I truly desired was taking care of my family, spending time with family and friends, giving to and serving others. At that point, I got mad. Every useless thing I had was standing between me and the life I wanted for our family.
A few months after my layoff I found Dave Ramsey’s book The Total Money Makeover. It resonated with what I was feeling about our recent layoff scare. I wanted to have control over our money and to be able to set aside enough so that if something like that happened again, we’d be prepared. If we could just start eliminating debt payments, we’d actually have money left over at the end of each month. We took to the plan, got on a budget, and attacked our debt.
If budgeting feels as intimidating to you as it did for me, start the way we did with a reverse budget. I set up budgeting software and tracked our spending for a month. We used Quicken, but Every Dollar or Betterment are also good options. Just by tracking and being mindful, we cut our expenses and it gave us a baseline to work from. When we saw exactly how much eating out was costing us, it became easy to plan a menu and go grocery shopping. At the same time, it was encouraging to see how cutting a few expenses increased the amount we were putting toward eliminating debt. That motivated us to cut more.
Part of the Dave Ramsey plan is to sell all the unneeded stuff you’ve accumulated and put the proceeds toward eliminating debt. This was very healing as I was able to recover some of the money I wasted and pare down what I owned. I’ve since become very intentional about what I own and try to only bring things into my life that add value.
I started a spreadsheet to track how much debt we paid off with the stuff we sold. As we sold more and more, I realized that I didn’t miss any of it. I can only think of a couple of times in the last five years when I needed something we had sold. There were over 300 line items in that spreadsheet and many of those were bulk lots such as a garage sale where hundreds of items were sold.
We paid off our last non-mortgage debt just before Christmas 2014. You’d expect our spending to increase after that, but it didn’t. We found that we didn’t miss most of the things we cut, so there was no reason to bring them back. We went out to dinner more often and felt comfortable spending on things that were important to us and added value. But our spending patterns didn’t change.
Fast forward to 2018. Lisa didn’t like her job and we had reason to believe they might be shutting down her office. So when she called to tell me the layoff notice had come across, I remember being excited for her. Then I felt worried about her state of mind. I worried she would feel devalued, rejected, or like a failure.
Instead, she was kind of giddy. It was like someone had taken a weight off her shoulders. She felt secure about our financial position, which enabled her to focus on helping her employees navigate the unemployment system and get the help they needed.
This time around, instead of feeling panic, the financial margin we created by eliminating debt allowed us to start thinking about what we could do differently. A year earlier on a weekend getaway for our anniversary, we started dreaming about what we’d do differently. Lisa expressed regret that she hadn’t been home with the kids more, so we started making plans for her to be able to quit her job in the summer of 2019. When we found out that she was being let go a year earlier than planned, we realized that God had more faith in our plan than we did.
When Lisa expressed interest in staying home more with the kids we started daydreaming about what that would look like. She didn’t want to quit her job and be home year-round, so contract work during the kid’s school year made sense. I already had a budget established so I had a rough idea of what we’d need to save and the areas we’d need to trim to get through the summer on one income. When the layoff came, we’d already done a lot of the mental groundwork.
It was a surreal feeling as her job was winding down and she wasn’t hunting for a new one. The kids started a countdown on the calendar and a growing list of things to do over the summer. The first Monday Lisa didn’t have to go to work everyone was so excited. And I was excited for them as I left for work and they were happily planning their day.
The summer wasn’t all playdates and fun outings. It was an adjustment for Lisa to be with the kids 24/7, and an adjustment for the kids to not have a structured daycare day and classmates to interact with. They drove each other crazy sometimes, as siblings do, but it was a good experience.
Holly asked what advice I’d give others and the simplest answer is to get out of debt. I think that’s a wise choice for everyone, but that’s only part of the story.
You also need to create margin in your life. When a significant percentage of your monthly expenses are fixed debt payments, you don’t have the opportunity to consider things like a more fulfilling job, taking time off, or starting a business. When your schedule is crammed full, you don’t have the time or emotional energy to ask questions like: What do I really want to do? What do I find fulfilling? Or what do I need to stop doing because it’s draining me? Being able to ask those questions, having the margin to really consider the answer, and then doing something about them is far more important than how much money you have.When a significant percentage of your monthly expenses are fixed debt payments, you don't have the opportunity to consider things like a more fulfilling job, taking time off, or starting a business. @JohnSQuast Click To Tweet
If you’re in a place where creating financial margin seems a long way off, I understand. We had a point in our journey when we didn’t know how we could possibly create the space we have today. Back then saving $1,000 seemed like an unrealistic goal.
If that’s you, consider whether you’re holding any limiting beliefs that make that goal seem further away than it really is. Maybe you’re already working two jobs or working full time and pouring yourself into your kids the rest of the time. If not, would you be willing to make that sacrifice for a period of time to create margin in the future? Or pick up a side hustle like thrift store and garage sale flipping. Check out Gary Vaynerchuk’s advice on how anyone can make extra cash hitting up garage and estate sales. Or consider Dave Ramsey’s advice about delivering pizzas a couple of nights a week instead of surfing the net or watching Netflix.
Wherever you’re at right now, eliminating debt and financial freedom is within reach. I (Holly again) believe the old adage that we become the people we spend the most time with. Consider surrounding yourself with people who are already doing what you want to do. Fill your social media feed with people who are positive and inspiring. And then start doing the work so you too can thrive though the unexpected just like John and Lisa did.
Thank you again to John and Lisa for generously sharing their story. I truly enjoyed going through the process of developing this with John and I hope it provides great value to you or someone you know. If you’d like to connect with John, you can follow him on Twitter or connect on Facebook.