Lessons From the Layoff: Plan for Disaster, and Be Humble Enough to Ask for Help

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This family went through some very tough times. But the lessons they learned will last a lifetime.

Once in a while, you hear good news. And often, troubled times lead to fresh wisdom. Here’s a little of both.

Perhaps you remember The Restless Project story of Kimberly: “One Income, Zero Hope.” Mom to a 5- and a 3-year-old, Kimberly had been given notice that she would be laid off from her human resources job, and she was more than restless, she was scared.

While her husband was doing well enough as a lawyer, and the Raleigh, N.C., family had a very reasonable $963 mortgage, they were drowning in his law school debt, which required a $770-a-month student loan payment.

Even after slashing every expense Kimberly could find — the kids got only second-hand toys for Christmas — she calculated that their badly broken household budget would be about $700 in the red every month. When we chatted, she was sounding pretty desperate. You can see more details of the family budget here.

“I have looked for new employment, to avoid this storm, for the past 11 months,” said Kimberly at the time. She requested the family’s last name be withheld for privacy reasons. “In that time, I have applied for well over 100 opportunities, and been selected to interview for seven. Though two of these interviews led to second interviews, none resulted in an offer.”

Here’s the good news: A few days ago, Kimberly got a new job that pays the same as the one she lost last fall.

Better still, the scary experience gave the family a new outlook on spending. There’s nothing like a crisis to make people focus. The family will emerge financially stronger when her paychecks start rolling in. Here’s why:

For starters, faced with a desperate situation, the couple managed to refinance the student loan debt.

Click to learn about The Restless ProjectClick to learn about The Restless Project

“Miraculously, we did find a place willing to invest in the debt. In November our interest rate went down to 5.75% and the payment was reduced to $526 per month,” Kimberly said.

The lesson there? “I definitely wish we had not waited until panic mode at the eleventh hour to exhaust all resources pursuing the private student loan re-fi. It pains me to think of how much we could have saved in interest fees had we secured the more favorable loan much sooner. Going forward, as we do with our mortgage, we will periodically explore our options proactively to be sure we are getting the most favorable rate that we might be eligible for in the market.”

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