Money Matters
Dear Dr. Darcy,
My company has been laying off people in waves for 3 years and I’ve been lucky to make the cut to this point. I’m pretty sure my luck is about to run out. A friend of mine was in HR last week and said she saw my name on a stack of files that went from floor to shoulder height of people who will be in the next round.
If this happens, I’m screwed. My wife and I live up to and often beyond our means. Expressions like, “You only live once,” have enabled us to spend more than we should, repeatedly, for years. We both have good jobs with decent salaries but we live in NYC and even on a combined income of 300K, we just about keep up with our friends. We stopped contributing to our 401K’s after the economy tanked in 07 and haven’t put anything in savings. We basically live paycheck to paycheck.
I can’t believe how devastated I’ve felt over this for the past several days. I never thought money was so important to me but I feel like a failure on so many levels. I’ve heard that in this climate, credit card companies will shorten your line of credit if they get wind that you’ve been laid off. If our cards get turned off we’ll be unable to meet our daily needs as we charge every expense and then scramble to pay the cards when our paychecks come through. I’ve been having thoughts of suicide that I don’t intend to act on, but it’s terrifying me because I’ve never been a depressive type.
ANSWER
This is undoubtedly going to be very hard for you to hear but the extent to which you follow my advice will directly correlate to how much worse this gets, so I suggest you turn off your brain, which got you into this nightmare, and listen to mine:
Take your credit cards out of your wallet & ask your wife to do the same. Put them in a drawer, TODAY, and begin spending cash to meet your needs. Before you roll your eyes at me, let me tell you that I’ve been where you are and I can assure you that every excuse you’re about to create is a version of one that I created and parted with because those thoughts don’t work. They brought you where you are today. They are faulty. Abandon them. If you don’t, you may lose everything, and I don’t mean objects of monetary value.
You’re thinking that you don’t have enough cash to meet your monthly expenses, right? You don’t need 30 days of cash. You just need enough to get you through today without debting/using a credit card. Tomorrow you’ll do the same. Stop imagining that you need 20K in the bank to meet your needs. Your needs are about to be individualized to your family’s needs as opposed to mirroring what your friends’ needs are. Stop trying to keep up with them. You are in survival mode. This is a time for getting real; it’s no time for worrying about appearances.
Consider joining an organization called Debtors Anonymous, linked to here. The name implies that its members are comprised only of people in debt, but it’s also for individuals who have mismanaged their money or who have avoided dealing appropriately with their finances. In New York City, you will walk in to a meeting and you will see that you are not alone. In fact, many of the meetings in New York have 100+ members, all of whom have more experience than you and who can support you to take the appropriate action necessary to navigate this layoff and turn your life around.
You are not a failure. Just a normal, educated and privileged guy who’s been trying to live the good life. What you’ve been living has been a version of purgatory. If you follow my advice, you’ll learn what the good life is.
Writer’s stats: Male, Straight.