DH's salary cut overnight! Wow.

[ohionola]

Another thing you can do is look at your tax return. If you are getting a large return, adjust your paycheck withholdings. I was able to increase our bring home pay by several hundred dollars a month by doing this. (Example, if you get a $3000 refund, if you adjusted your taxes you could bring home an extra $250 a month) The bad part is that you won't get a huge tax refund but it will help you in the day to day living.

I would also suggest calling every company you owe money to, explain the situation and ask them to help you. Most are understanding and will do something. When you add up the other suggestions people have, I think you will be surprised how much you can save. We had something similar happen a few years ago and this is a rough estimate how made it work.


Switched insurance to Liberty Mutual, $70 a month (home and auto)
Called credit cards and temporarily got our interest lowered $100 per month
Adjusted tax withholdings $250 per month
My wife explained the situation to per boss and was able to work an extra hour per day. $300 per month
Saved with coupons and walmart price matching sales and buy generic $50 a month (at least)
Called cable and reduced my package $30 (you can also temporarily suspend your service for a few months which could help)
We had variable life insurance that we were able to not make payments for a year and still keep $80
Called and deferred student loans $350 per month
Lowered our water heater, turned off air/heat during day $30 a month
Cancel Sams or Costco Memberships (they aren't the place to shop on a budget and you can get those membership fees back)

I am sure we did some other things but Those are a few I remember. Overall, it was a savings of more than $1000 a month for us.

One thing a lot of people say is to cancel the cable. I would not cancel that as if you are low on funds, you will probably spend more time at home and it is cheap entertainment. I would try to get a lower package or temporary price cut.

 

[disbound09]

Wow I bet he is excited to go to work and be productive. I own a business and have never even considered that. But we are small and know the employees. On the other hand I have taken a pay cut to keep things going forward. Good Luck

 

[McKelly]

Wow I bet he is excited to go to work and be productive. I own a business and have never even considered that. But we are small and know the employees. On the other hand I have taken a pay cut to keep things going forward. Good Luck

No kidding! Talk about bad morale.

Something similar happened a few years ago to us. My DH's boss slashed many of his employees hours to 30 hours a week (lasted nine months) VIA E-MAIL at 3:30 on Friday. On Monday the boss showed up in a BRAND NEW Bentley! THAT went over well! NOT!! A lot of ticked off employees for sure!

We canceled our 401K contributions, cut cable and cell phones, changed our withholdings and canceled our vacation. And we ate more breakfasts for dinners.... Good Luck.

 

[2manypets]

My DH's salary was cut by $1k per month about 6 months ago. We stopped going out to dinner and the movies. Now we go to friends houses to entertain ourselves and we've gotten a lot closer to them.

I coupon like crazy and only buy clothing, household items, etc. when something is really needed or is on a major sale and we will be needing it soon. Secondhand stores are not as bad as I once thought.

We cut TV and phone features, bring leftovers to work, have meatless dinners twice a week.

Once we looked at the budget, we found several area's that we were splurging on and didn't even know it. We have gotten into debt since then while learning to live within our means again. So if we're still in debt be next September, we'll be postponing our trip to Disney for another year.

 

[crisi]

No kidding! Talk about bad morale.
.

When the company I worked for did it, it actually wasn't that bad for morale.

We laid off 20% of our staff. Without the salary reductions, we'd have laid off 10-15% more of our staff. All of us saw friends in worse shape than we were, and most of us didn't want the cuts to go deeper than they did. The company was on the brink of bankruptcy and needed to pull itself together.

And they did. I left, but last year my friends got five figure bonuses.

I think it depends on why its being done. If its being done to save jobs and to save the business, then you can keep morale up - especially if the executives take a larger pay cat. If its done so the owner can buy a Bentley, I wouldn't park the Bentley anywhere anyone could key it.

 

[branv]

We went through a salary cut a few years ago. We have a monthly budget set up where we have a place for all our money, which we revisited with the new salary, drawing new limits. We temporarily dropped the 401k down to only what the company matched, called cable/internet and told them we'd cancel if they didn't give us a good discount (today, I'd drop cable and go with Hulu and an HD antenna), began couponing/meal planning more intently, reduced our cell packages, dropped home phone, watched our driving i.e. waited to do errands until we could combine trips (because gas was SO expensive, and we live farther out). You can also consider picking up some contract or temporary work -- even one day a month can make a difference. I had one friend who put out the word that she was available for weekend night babysitting in her home. Friends (and their friends) were eager to have someone they trusted care for their child while they had date night. For her, it wasn't a huge hardship, and sometimes just meant her kids had someone to play with. I have another friend who lost her job, who sat down with her older children and explained that they were fine, but that they needed to be careful with money for the time being. It helped stave off the pleading for things they couldn't afford, and the kids even got involved in reducing waste. I know that won't work for every family, but it did for hers.

I know this is scary. This is why you never box yourself into a 15 year mortgage (I don't care what the financial guru's say). You can get the same effect by doubling your mortgage payment. If something like this happens, then you drop down to your actual payment until the "crisis" has passed. For now, just take a hard look at wants versus needs and see if cutting back to needs can give you some breathing room. Good luck.

With all due respect, this may be true for some people, but not for everyone. When we refinanced to a 15 year mortgage, we not just reduced our interest rate 2.5% but we were able to eliminate the monthly PMI payment. It only cost us an extra $50/mos on our monthly mortgage payment to drop 10 years off our original loan. We did the math on the best way to save over the life of the loan, and this was by far the best savings and the most affordable for us.

I will say that we use your method for car loans -- the lower interest you may receive for a shorter term low has usually not been significant enough to not use the safety net of a longer loan. Like a PP, we just pay extra a month to reduce it to a short term loan, knowing if another salary cut or lay off happens, we have a buffer to fall back on.

 

[pooh4evr]

So, last night I was cooking dinner the stove started sparking, and smoking..good times. I turned it off, flipped the breaker. Anyway I guess now I need to get a new one. Nice. When it rains it pours right?

We are changing our contributions, I changed my mortgage payments to bi weekly so the hit wasn't as bad, and we are switching out tv stuff around too, canceling Netflix, and those types of monthly charge things, and prepping stuff for a consignment sal. Woohoo, I told DH last night one day when we are old we will look back and laugh right? Life is an adventure for sure and we can make it! And of course the biggest blow is no Disney this fall boo. The kids didn't know we were planning omit spit is OK.

 

[kkwis2]

I just also wanted to say that I'm sorry to hear that things aren't going well for you right now. I know it's difficult to focus on the good when it feels like you are surrounded by bad, but as another poster said, try to at least acknowledge to there is good in your life. Don't let the negatives drag you down completely.

I hope things start to improve soon!

 

[java]

I'm sorry. DH was hit with that 5 years ago- 30% pay cut overnight- found out when he got his check. That was a bad sign for us. His company ended up shutting down 2 years later. I wish he would have started looking back then when it first happened.

Might be time to get the resume out there.

But we survived it. And you will too!

 

[EnduringWone]

So sorry to hear this. hugs

DH took a pay cut of 20,000 a year when the lovely recession started.

We got rid of my smart phone and I use a tracphone (I am a housewife and I don't like to talk on the phone much. One can contact me on my house phone or email, etc) Went from one hundred plus bill to a ten dollar bill a month.

We removed cable services and have Netflix. We don't watch much tv, so we went from 70 plus to 8 bucks per month.

We shop at Aldi's and I could just smack myself for not shopping here earlier. We save around 100 a month shopping here and ours is great with fresh produce and meats.

We refinanced our car, saving another 125 a month. First new car we ever bought, 30 payments left, ugh.

My parents buy our daughter her clothes and they help out in other ways too.

Dh has received a couple of payraises since then, but we are still in a tight bind.

I am sure your family will be fine. Best of luck!

 

[pooh4evr]

I really want to say thank you to everyone. I wasn't sure what kind of reaction I would get, but needed to vent somewhere! The DIS is a friendly place! Thanks!

 

[nono]

Another thing you can do is look at your tax return. If you are getting a large return, adjust your paycheck withholdings. I was able to increase our bring home pay by several hundred dollars a month by doing this. (Example, if you get a $3000 refund, if you adjusted your taxes you could bring home an extra $250 a month) The bad part is that you won't get a huge tax refund but it will help you in the day to day living.

Along this line...have you seen the new paycheck yet? If the cut was severe enough, and you earned well in the past, the cut may not net out as badly as you fear. The graduated tax system in reverse can be a lovely thing....

Hang in there.