We took advantage of free activities in the first three months of being in the city – including going to the park.
*Please note that my husband and I have combined finances, so whenever I say my net worth, I mean ours.
In January 2015 my husband and I packed up our lives and moved to another city. We started out in early January with a net worth of $26,111.43. That net worth is our starting point. Over the next three months we’d live on one income with a budget deficit while he looked for work. At the end of those three months we’d end up with a net worth of $27,547.
Increasing our net worth while on one income was not an easy feat. It took discipline, creativity and planning. Fortunately I documented everything in detail, to share with you today. Here’s how we managed to increase our net worth, even when we were only on one income:
I Slashed Our Budget
Since we were going to be on a temporarily reduced income, I looked through our budget and slashed any unnecessary spending for the time being. The slashing mostly consisted of eliminating savings from the budget. For the first three months of the year, we had no planned retirement savings.
I Prepared for a Budget Deficit
A new, more expensive city means a new, more expensive budget. But even with the extra costs like increased rent, we could almost cover our budget on my income alone. Almost. Every week that my husband was unemployed, we took $100 out of savings to make ends meet. Fortunately, I had prepared for this by saving a nice cushion of cash. This cash cushion meant we didn’t have to put our day-to-day living expenses on a credit card and avoided getting dinged with interest charges.
I Hustled!
I had planned to suspend our retirement contributions until my husband found a job, but that plan irked me. I didn’t relish the idea of not saving a cent and living paycheque-to-paycheque. So I used my freelance income to continue to make retirement contributions. I hustled hard and was able to keep up with our $500 per month retirement contributions with room to spare. Those months happened to be great months on the stock market which helped boost our net worth.
He Hustled!
I wasn’t the only one in this household hustling to minimize the impact of our one-income status. My husband was very disciplined about finding a job. He checked job boards every morning, personalized every cover letter, and sent thank you notes after interviews. He even reconnected with old acquaintances to broaden his network potentially to secure a position that wasn’t being advertised.
To help with cash flow, he took care of the closing of his business accounts (he was a partner in a business before we moved), which helped bring in an extra $1,500. The extra $1,500 was super helpful in boosting our net worth.
In the end, his hustling paid off, and he’s now gainfully employed. He enjoys his new position and is making about three times what he was before we moved, which is great for us!
Preparing for Future Net Worth Gains
The first step to keeping our net worth intact while we were in a budget deficit was minimizing our losses. In this aspect I can safely say that we were successful. At the end of March, our net worth is $27,547. Our net worth didn’t decrease, it increased, and I’m very thankful for that. Now the budget deficit is over, so it’s time get back to seriously growing our net worth.
Starting in April, we’re officially back on the saving bandwagon. We’ve got two pay cheques coming in and have paid off some lingering credit card debt from the transition. We’re ready to get back in on the saving game. Budgeted retirement contributions have resumed, saving for a house is going to kick into high gear, as will our travel savings and another secret savings goal. Big things are coming our way in 2015!
Have you ever been in a budget deficit before? How did it affect your bottom line? I want to know!