We've all heard the phrase "Save for a rainy day". A "Rainy Day" is defined as "A time of need or trouble". Whether you set a percentage of your paycheck aside or wait till tax time to deposit a bigger chunk in savings, we're all forced to think about the unexpected. The so called "rainy day" fund is money you hope you'll never have to spend but preparing for the unknown helps to soften the financial sting for life's unexpected moments. Who wants to spend $1,000 on a new water heater or $2,000 on unexpected car repairs? 

It's just another one of life's unexpected moments. There have been many so called unexpected moments - most have been small but manageable. But have you ever thought of a Rainy Day being bigger than just a broken water heater or random car repairs? The Rainy Day most of us never see coming.....the one that can destroy your finances, wreak havoc on your day-to-day living and it's big enough to possibly turn your world upside down. I'm talking about a Job Loss!!!

There I was on June 14, 2017 sitting across from my boss as he nervously announced that a decision had been made to eliminate my position and my last day will be June 16th. It was clear he felt bad as he fumbled over his words. I was completely caught off guard and in a bit of shock as I've always been the one with a planned exit strategy. Yet there I was experiencing a different set of emotions for the first time ever. After my boss's exit, I sat there thinking about our recent decision to take a 7 day vacation to Italy and whether I should cancel. I called DH right away and broke the news and after his initial reaction of shock his response was "Don't worry about it. You weren't happy there anyway".

That's the truth. I wasn't happy. So immediately after speaking with DH, I felt the freedom I had been silently dreaming of. At some point after the New Year of 2017 I started desiring a "break". I would say out loud to whoever would listen "I wish I could just not work for 3 months".  So in a weird way, my job loss felt like a gift. I got to experience something I've always wanted....MENTAL FREEDOM. So how did DH and I survive 7 months on one income? Here's how.....

I truly practice some of the things I wrote about in my earlier posts.....the most critical being "Living Below Your Means". That is the single most IMPORTANT element to smart money management. Most people say "Live within your means" but that only indicates that you spend most of what you make. When you strive to live below your means, your high savings rate will enable you to compound cash at a much faster rate. 

When we got the bright idea at the end of 2016 that we wanted to purchase a 1 family home it didn't take very long for me to pull the plug on that idea. The numbers simply didn't add up. The numbers dictated an absolute need to have 2  incomes at ALL times. If one income disappeared our finances would fall in a stress test situation. As a result, we made a decision to remain in our 2 family home and forego the idea of the dream house. Turns out we dodged a bullet and that decision was almost like a premonition as we had no idea a job loss was on our horizon 7 months later. This doesn't mean we'll never buy a one family but if that situation ever presents itself we would approach that decision very methodically.

Because we managed to keep our expenses low we can survive on DH's (Dear Husband) income without having to tap our cash reserves as we were experiencing the "rainy" season. If you're in a 2 income household, living below your means can possibly allow you to Live on One Income. I know that's not always feasible and everyone's job and income level varies greatly but we were able to build risk in our finances by living below our means.

So how much money is enough money for those unforeseen rainy days? I'd say having enough so that when it comes you can still sleep at night. The finance world claims that having 3-6 months expenses saved is sufficient. I think 6 months should be the absolute minimum. I'm a bit more extreme so I manage our finances with a time period much longer than 6 months. That's because I almost always make decisions considering the absolute worst case scenario. We didn't have to touch our emergency fund until the "Rainy Day" became a STORM.  Stayed tuned for Part 2 to hear how Murphy's Law  took over our lives for the last 3 months.

So there you have it....a JOB LOSS....the Rainy Day you never see coming and how we survived those 7 months on a single income.

What was your "Rainy Day" and how did you survive it? Leave me a comment below.



My very first post about Financial Freedom talked about spending habits and the importance of creating a budget. Having a budget is really essential to managing your money. Budgeting can seem like it comes with restrictions but it actually helps save money because it identifies areas of overspending. Budgeting creates cash flow visibility and ensures that you have enough funds available to cover your most important bills and help you reach your goals by spending on the things that are most important to you. Creating and sticking to a budget eliminates worry and creates more control over knowing where your dollars are being spent. Ultimately, a budget puts you in control of your money and is the biggest tool to changing your financial future.

Automating payments without having done an actual budget follows the "Set it and Forget it" method.....setting bills on auto-pay and/or paying monthly bills like clockwork. Most people who live without a budget follow the "Set it and Forget it" method and more than likely overpay on expenses where they actually could be saving. When Mr. Mindful Dollar and I created a budget a couple years ago, we soon realized that we spent far too long overpaying on certain bills. There's something to be said about plugging numbers on an excel sheet or writing it on paper. Numbers don't lie and we quickly realized we needed to control our expenses. Below are the areas we successfully reduced our monthly expenses:

Heating Bill -  For the first few years of home ownership DH had a regular thermostat that had to be programmed manually. The claims on programmable thermostats is that they help save money and energy through set programming. But what if you set your thermostat to come on at 4pm but for whatever reason you get home at 9pm? You just wasted 4 hours of heating (considering it may take an hour to heat the space) for which couldn't be changed while you weren't in the house. To remedy this, DH being a tech savvy guy discovered the power of Nest about 3 years ago. Nest Labs is the producer of programmable, self-learning, Wi-Fi enabled thermostats and security systems. We paid roughly $300 for the system and installation and we have the power to control our heat from our iPhones via the app. The Nest Thermostat  gets to know the temperatures you like and when you like them and creates a schedule and automatically creates a schedule for you. Since using Nest, we've realized a savings of at least $20 a month on our heating bill just by making the switch.

Car Insurance - When Geico sent a letter 3 months ago and threatened to increase  DH's rate by 55%, he immediately shopped around and secured a rate from Allstate that was $70 cheaper per month. Never assume that your current rate is the best in the market. Always try to test the market to see what competitors are offering. You can do a quick comparison on Ever Quote which scans databases of several insurance companies and provides suggested quotes. 

Cable Bill - state that the average price of your cable bill will increase this year by 3-4% in addition to add-on fees. Our bill in 2014 was roughly $189 for TV an Internet alone. When our contract was up for renewal we reduced our bill to $140. Within the personal finance space, there are a lot of people who make the bold move to cut off their cable bill and only use Netflix or Hulu. While this may feel like a sacrifice, if you're in the midst of aggressively paying off debt, it's an expenditure worth ratcheting back until you  hit some financial goals. If cutting off cable seems too drastic, consider calling your cable carrier once a year to inquire about better priced packages and express your disdain with the current rates you're paying. Competition among cable companies are pretty stiff and they want your business.

Medical Expenses - My health insurance has been relatively good but I realized that in the last 2 years my employer made changes to my benefits plan. After a recent annual checkup, I received bills for laboratory and radiology services. Turns out there's a deductible I have to meet before the insurance company covers any expenses for laboratory and radiology imaging services. The hospital in the area billed me for the lab work and I called and explained that the bill was unexpected and not in my budget and inquired about a discount. They immediately offered me a 25% discount which saved me $37. Never be afraid to call and inquire about paying a lower rate. Your attempt may not always be successful but not trying guarantees no discount. If you're facing financial hardship, they provide assistance to help meet your situation as well.

House Phone - DH had an international phone plan that cost $45 a month. Why did we need to spend $540 a year on a house phone? DH did some research and found a phone company called Ooma that cost $100 a year and that rate includes free calls to Canada and some European countries. DH calls Paris often to chat with his friends and cousin which works out nicely. That's $8.33 a month for home phone service and we have the option of adding additional funds to enable calls to other countries. The company even has an app that enables phone calls from anywhere. If I'm at work and I want to call my uncle in Canada, I simply make the call from my iPhone through the app and I won't incur charges from my cell phone carrier since the call was made through Ooma.

Water Bill - DH and I are landlords with a multi-family house with 2 rental units. Water rates in NYC tend to be a bit higher compared to the suburbs. DH has become a fanatic of logging into the city's website to check the daily water usage to ensure it's within a reasonable range. Average daily water usage costs about $2.95-$4. A couple weeks ago he realized the usage spiked to an average daily rate of $11 and even spiked to $23. This prompted us to contact the tenants to see if they were experiencing a running toilet, since past issues have taught us that this can almost double our quarterly bill if it goes unchecked. We discovered that there was in fact a runny toilet and we quickly scheduled a plumber.

Home insurance for appliances - In addition to regular home insurance, DH secured additional insurance for all appliances when he completed the home purchase which covers both boilers, microwaves, refrigerators and toilets for the entire house. The service is a MUST for all homeowners because you grossly reduce your costs for repairs over time. The company charges a monthly premium and if a repair is needed a deductible is charged once service is rendered.  Our home comes equipped with Over-The-Range Microwaves. I  recall shortly after Mr. Mindful Dollar bought the house, the tenant's microwave unit blew a fuse and when GE sent their repair guy, he paid $300 out of pocket for the service. A couple months later, the fuse blew again and that was another $300 out of pocket expense. It was these 2 incidences that lead him to search for home appliance insurance. Our initial company charged $55 for monthly premiums and charged a $75 deductible each time we had an incident. About 7 months ago, DH decided to shop around and we switched to a company called Home Choice Warranty. They charge $45 for monthly premiums and deductible. When we had the runny toilet issue 2 weeks ago, we called the company and they sent out a plumber last week and our out of pocket expense was only $45. Had we called a regular plumbing service, that one time service could've easily been $150-$200.

If you haven't already done a budget, do one TODAY. Looking at your monthly expenses will provide an opportunity to comb through your actual payments and prompt you to shop around to ensure you've secured the most competitive rates in the market.


Over the years, I struggled through several periods of poor spending. I would spend half the year spending and the other half cleaning up the mess. I would eventually calculate the damage in dollars and would feel so much guilt that I would automatically shift into a frenzy of aggressively paying off the debt. During these moments, I would convince myself that I was finally ready to put aside my atrocious spending habits. I always thought of myself as a pretty logical person so I was able to rationalize that spending $5000 on "stuff" was illogical. The only problem was that I would repeat this pattern of behavior year after year.

When I first learned I was becoming a parent, I made a couple smart financial changes (more on this in a future post) that signaled the beginning of long term financial planning. However, everything else in my behavior said otherwise. I was still spending and operating without any real goals. At the start of this year, I decided it was time to take control of my finances. As I reflected on my poor money habits, I felt disgust and anger because I realized I was robbing my son of his future. That single thought fueled my desire for change.

I was suddenly motivated to change my relationship with money but wasn't sure where to start. There are a plethora of articles available on money topics but I wanted to be connected to something more concrete. Then I discovered Dave Ramsey and his daily podcasts. I heard the name before and knew he was a financial guru but never intentionally tried to learn about him. Dave Ramsey is a money management expert, NY Times Best Selling author, radio show host that has helped millions of people get out of debt. His podcasts involve him taking calls from listeners who are seeking financial advice. The callers would often reference the Baby Steps but wasn't really sure what that meant. A quick search later and I would discover Dave Ramsey's Baby Steps to financial freedom. This was the tried and true method that helped his listeners experience some level of financial freedom. The 7 Baby Steps are:

  • Baby Step 1 - $1,000 to Start an Emergency Fund
  • Baby Step 2 - Pay off all Debt except the house using the Debt Snowball
  • Baby Step 3 - 3-6 months of monthly expenses in savings
  • Baby Step 4 - Fund retirement accounts using 15% of household income between 401K, Roth or Traditional IRA
  • Baby Step 5 - Establish college fund for kids
  • Baby Step 6 - Pay off mortgage early
  • Baby Step 7 - Build Wealth and Give

The opening line for the podcasts starts out with Dave saying "This is the Dave Ramsey show where Debt is DUMB, Cash is KING and the paid off home mortgage has taken the place of the BMW as the status symbol of choice". Talk about an opening! Dave takes calls from listeners who are seeking financial advice and those who want to do their DEBT FREE SCREAM. The DEBT FREE SCREAM involves people recounting their debt journey by using Dave's recommended GAZELLE approach towards paying off debt - think of a gazelle frantically running away from a cheetah. People were paying off $50,000 in 11 months making a household income of $65,000-$85,000 or in a more extreme case, paying off $285,000 in 5 years making $78,000 in the beginning with an ending salary of $150,000. Talk about gazelle intensity. After listening to a week's worth of podcasts loaded with these amazing debt repayment stories, the light bulb went off in my head. I decided I wanted to experience the financial freedom that Dave Ramsey was talking about. I want to live a life without ANY debt except for our home. This was my idea and my motivation. I just needed to finesse this idea to get DH motivated to make this a family goal.

What are your thoughts on Dave Ramsey's Baby Steps? Where are you in the Baby Step process?