Choices

What made it easier to transition to my new status as unemployed?

We lived below our means.  Our lifestyle choices made it easier.   We had taken certain steps years earlier, when we were both starting our careers, that have given us the financial flexibility and ability to deal with this blow.  We have always lived below our means, and so we were not dependent on both of our incomes to make ends meet.

What did it mean to live below our means? 

When I mentioned our lifestyle choices, there are several components and categories.  There are so many choices.  Housing.  Variable expenses.  It's very easy to spend A LOT in Silicon Valley or anywhere for that matter.

• Housing - in Silicon Valley, housing is a major expense.  In certain cities, the average cost of a home can be more than $1 million!  Cities such as Palo Alto, Los Altos and Cupertino have averages that exceed $1 million.  How can an average person afford a house?  Most people I know stretch quite a bit to afford a house.  

• While we bought  a house quite a while ago, housing was still quite expensive.   While we looked at houses in Los Altos and Palo Alto, there just wasn't that much value.  The houses were just too expensive (the cheaper houses didn't have the square footage we wanted, were older and required quite a bit of work) and our monthly mortgage would take up too much of our net income.  After paying the mortgage on these houses, we would barely have enough to cover our other expenses.  It made me think about the housing/mortgage industry and how it does not have our (the consumer) own interests at heart.  Real estate agents want us to buy the most expensive house possible so that they can get a bigger commission.  Mortgage companies say that one could get a mortgage that represents up to 30% of our gross income (they get more interest), but in my opinion, that is much too high.   

• Ultimately, we chose to buy a more modest house.  We ended up looking at houses in more affordable areas like Santa Clara, San Jose and Willow Glen.   I just wasn't comfortable stretching our budget too much to buy a house.  I wanted a mortgage that one income could support.  We made this decision based partly on our other goals:
• Family - we knew that we want to start a family and thus other expenses would need to factored into our plan (childcare expenses, saving for college, etc.).
• Retirement - both of us were conscious of the need to save for the future.
• Standard of living - we weren't really willing to sacrifice too much just to have a house in a certain zip code or have a house that had all of the bells and whistles. One thing that we realized is that real estate taxes are also quite high.  The more expensive the house, the bigger the tax bill. 

 It's a funny thing when I think about housing expenses.  I know a lot of people who had stretch quite a bit to buy a house.  Maybe it was because they wanted to live in a certain school district or maybe they just wanted a big "show" house, but to see their day to day struggle to pay the mortgage (in addition to their other expenses to keep up with their desired living standard) just made me feel as though I made the right decision. 

Funny thing is (or, really not so funny), it's a vicious cycle.  In some ways what makes us want to keep up with the mythical "Joneses"?   Once you live in a certain "prestigious" neighborhood, there is there pressure to keep up appearances.  Once you have a "nice" house, you'll need a "nice" car, and "nice" furniture and then go to the "right" school or preschool or even private school, and it's endless. 

 I think this is the main reason why even with my being laid off, we'll be fine.  By living below our means, it makes it easier to live without both of our incomes.  If we had spent all of the money that was coming in, then we would become dependent on ALL  of our income and any reduction would be a problem.   It would be difficult if not impossible to save.

However, by living below our means, we got used to living on a certain income.   Also, since we had the habit of saving, we have a cushion to lessen the blow.   I realized that there are so many demands on our money.  It's a finite resource and should be respected.  Balance.  That's what's needed.  Balance of wants and needs and a healthy dose of realism.  Yes, I would have loved to live in a really nice house, but was I willing to deal with the sacrifices to live there?  Would I want to deal with the stress to make enough to pay the mortgage month after month after month?  How would I deal with other expenses, such as childcare?  Would I be limiting my options in the future? Would I feel stuck if I had such a huge mortgage?  In the end, there were too many doubts and common sense prevailed.  I still think about the houses that could have been, but I'm so much happier now in my house.  It may be modest, but it's still my home.

We created a habit of saving.  This is part of living below our means.   We have saved and save consistently.  This now gives me great comfort during this uncertain time because now we have a bit of a safety cushion to manage any contingency.

We invested in our future.  We had always saved for our future by putting money into our 401(k) accounts (at least to maximize our employer match and then some). 

We avoided debt.  Don't get me wrong.  We still have credit cards, but we paid them off in full each month.  The interest rates were just ridiculous and if I couldn't afford it, I just waited until I saved enough so that I could pay it off by the time the bill came. 


  

My Unemployed Life

Besides analyzing my expenses and potential income, how did I deal with being unemployed?  It's a strange feeling, being unemployed.  I was so used to getting up each day to go someplace, and now, I didn't have any particular place or schedule to follow.

My feelings varied each day.  Sometimes I would be so anxious and wondered whether I would be able to find a job easily. Other days, I wanted to take a step back and just take some time and enjoy the break.  It was like an internal war was going on inside of me, which caused even more anxiety.  My mommy side, which wanted to take a break from work to focus on the kids was at odds with my career side, which wanted to continue to progress and find a job right away.  My feelings towards one side or the other ebbed and flowed constantly.  I couldn't put either side to rest completely, maybe because I wasn't convinced about what I wanted to do.  Was there a compromise between these two polar positions? 

I was worried that if I didn't start looking right away, that I'd lose an opportunity.  To which my friend replied, you'll find another opportunity.  However, I knew that I'd kick myself if I did find a job right away and didn't take the opportunity to take a break.  But, if I did take a break, I knew that I just would not be able to relax completely.  I. can. not.  let. go. easily.....  I had been working in the tech industry for over ten years.   The hours and pace were pretty intense and it was hard to just go from 60 miles/hour to a sudden standstill.  That was it.  I felt like life was at a standstill and it was not a comfortable feeling.  I was used to moving forward.  Also, I was used to a routine.  It's a bit jarring to not have a routine.  I am a bit of a creature of habit and not having a routine was a bit disconcerting. 

I find it hard when there are too many choices.  I also felt a bit guilty.  Worrying about "choice" and the fact that I had a "choice" is a luxury.  This was something that I was aware of and appreciated.  Also, why did I feel as though I could only move "forward" if I had a job and there was progression in my career?  Could or would I feel as though I'm moving forward if I focused on other areas in my life that were neglected?  Could I explore other options and maybe do something different?

Most of my friends encouraged me to just take a break and not look for a while.  I knew that I should really take this opportunity, but it was hard.

What did I do those initial few days while unemployed?  I was giddy.  I went shopping.  I reveled at the lack of lines at stores.  I spent more time with the kids.   I was also very anxious.  I wondered about the future.  I had long-term plans and being laid off was not part of the plan.

I could, however, choose how to react to this event.  Not to be too simplistic, but one could take this positively, like an opportunity, or negatively, like an disaster.  I guess it could be seen as both, but generally, I wanted to see this as an opportunity.   I understand that not everyone can see things this way.  What made it easier for me to see this as an opportunity? What made it easier for me to be able to make a choice about what to do?

Tracking Food Expenses - October 6-12

Last week, I tracked how much I spent on food at the market.  Here is the breakdown and the stores that I went to.


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Week	Store	Amount
October 6-12	Farmer’s Market	$23
	Whole Foods	$44
	99 Ranch	$4
	Costco	$54
		Subtotal:	$125

I was pleasantly surprised by the amount that I spent at Whole Foods, which was pretty reasonable.  Because I had gotten most of my vegetables and fruits for the week at the farmer's market, I only needed to get a few staples at Whole Foods.  Foods like milk, bread and some meat.

This week I got some bread, lunch meat, ground turkey and some pork chops, some vegetables that I couldn't find or had forgotten to get at the farmer's market, yogurt and some milk.   I knew that I was going to go to Costco, so I held off on buying some meat.

Costco is such a dangerous place to go to when you're on a budget or trying to control costs.  So full of temptation.  I always end up buying more than I had planned for.    We needed a few things like coffee, olive oil and some chicken breast.   Other than some organic raspberries, I pretty much stuck to the list, which made me pretty happy.

This week, I also made lunch for the kids.   I just have to set the expectation that I will make lunch for them once a week.  

Cash Flow Review - Other Expenses

While food was and is a major expense, I started to think about our other expenses.  There were still other major parts of the budget, mainly related to housing and other general expenses.  While I will get to what we did about our housing expense (mortgage), I wanted to focus on the variable expenses.

Did our expenses go down?

I think that this is a natural consequence to the loss of income, but I no longer felt the desire to go shopping or buy things.  I was no longer tempted by the emails promoting sales/discounts/incentives.  I was never much of a mall rat and now I had no desire to troll the mall. 

There was a change in mindset.  I was more focused on buying things that were "needs" as opposed to "wants".  Before, I was either so stressed or bored at my job that I engaged in a bit of retail therapy.  At the time, I got a lot of "wants".  I "deserved" it because I was working so hard or I bought some things for the kids to alleviate the mommy guilt.  As if material things could replace the time that I wasn't spending with them.  I just got what I/we "wanted" and occasionally a "want" purchase became a "need" purchase.  Somehow I just justified the purchase.  I tend to be pretty frugal and I usually buy things because we either needed something or I was anticipating a need, but now, I only buy what we actually need and it had to be an immediate need.  It turns out we don't actually "need" much.  Other than a new pair shoes for some growing feet, I haven't had to buy much.

What else went down?

• Commuting expenses- since I wasn't commuting everyday, our gas expenses went down significantly and didn't incur any more bridge toll charges, which were infrequent but necessary sometimes.

• Extended care charges - now that I could pick up the children right after school, we didn't have to incur any extended care charges.

• Food/Restaurants - we just didn't eat out as often and if we did choose to go out, we went for low cost options.  

• Clothing - I didn't have to buy any more clothing to match the style of my office. 

 Did any expense go up?

Surprisingly, some expenses actually went up (wrong direction), but these expenses were not significant and did not undercut some of the savings above too much.

• Telecom/Phone -  Since I was mainly using my work phone, I now had to get a new plan.  Luckily, I didn't have to buy a new phone and I could use an old phone that I had lying around. Also, if I found a job sooner rather than later, I knew that I would likely get another work phone and so I didn't want to commit to a long service plan.  I settled on a monthly pre-paid plan.  There are limitations, but I was willing to live with them.  The data limit was a joke, but at least I could still use Wi-Fi.    I mainly wanted to use this phone for emergencies and this fit the bill.  The minutes limit was quite high and I knew that I'd never hit this limit.

• Gym -  They say that after a layoff, once should create a routine.   I decided to join the gym.  No better time than the present to get back into shape.  I was still being a bit picky though. I wanted certain amenities - pool, newer equipment and more importantly, a low monthly fee.  I wanted to be able to de-commit at any time.  Luckily, I found a place.

Cash Flow Review - Tracking Food Expenses

Farmer's Markets

This weekend, we went to the farmer's market.  I love going to the farmer's market.  It's a chance to get outside and I've been going for a while, so I'm familiar with the format and the ware at each stall.  I frequent certain stalls and I'm getting to know some of the vendors.

Today, I spent a total of $23.  What did I buy?

Bunch of broccoli
Cauliflower
bunch of green onions
bunch of kale
bunch of bok choy
3 green pluots
large bunch of Thompson grapes
3 lunchbox size Fuji apples
4 large beefsteak tomatoes
celery
3 large onions

Not a bad haul and all of the produce was either organic or pesticide-free (according to the vendors).  I had enough fruits and vegetables to last us the entire week.     I usually buy certain fruits and vegetables, but sometimes something inspires me.

I then planned my menu for the week.  Usually, I buy certain vegetables and they are staples and I can usually work around what I buy.  This week, I was inspired by the bunch of kale.   Since the weather is getting colder, I thought that I should make some sort of soup or stew.  I'll need sausage.

Now I needed to get meat.  I'll need to get some pork chops, ground beef or chicken, chicken breast and some sausage.    I've had bad luck with the sausage at Whole Foods, so now where will I get some good, fresh sausage for my soup or stew?

Post Restructuring Cash Flow Review - To Buy or Not to Buy Organic

Should I continue to buy a product that is on average 50% higher (or more often twice as much)?  That's the question I started asking whenever I wanted to buy organic products.   Even if I limited the products that were organic based on EWG's shopper's guide to produce, they were still a significant expense.  Was it worth it?  To me, it was.  

What does it mean to be organic?

According to the USDA's National Organic Program, "organic" means:

"Organic is a labeling term that indicates that the food or other agricultural product has been produced through approved methods that integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering may not be used."  (See reference here). 


Why did I want to continue to buy organic food?    

A recent study came out where the researchers compared organic food to conventional foods.  They found that the organic food didn't have any more minerals or vitamins than their conventional counterparts.    The study noted that all pesticides found (some were actually found on organic produce but in smaller amounts) were within safety limits.

To me, the article by Brian Fung of the Atlantic in his piece "Organic Food Isn't More Nutritious, but That Isn't the Point" summed up my feelings the best.   I didn't expect organic food to be more nutritious (although milk was found to contain slightly more omega-3 fatty acids), I primarily wanted to avoid the consumption of pesticides, hormones and other additives and exposure to potentially to harmful bacteria.    Also, I believe in sound farming practices and thought that the best way to support this was to continue to buy organic food.

Why was buying organic so important to me?

My kids.  My kids were still young and I wanted to ensure that what they ate wouldn't have any potentially detrimental effects on their development.    They have smaller bodies and they were still growing.  Studies haven't been done to gauge the potential and cumulative effects of these contaminants on young kids.   Buying organic is a big commitment though, especially when it comes to buying organic meat.  Organic meat is particularly expensive, but I also wanted to avoid meat from animals that had been treated with antibiotics because I wanted to limit their exposure to drug resistant bacteria or other pathogens. 

I try to save money buy buying organic food in bulk from Costco (organic chicken breast is about $5.99/lb and they generally have organic raspberries and strawberries on sale).  Whenever I go to Whole Foods, I buy only as much as I need.  Also, I frequent stalls that sell organic produce at farmer's markets.

Post Restructuring Cash Flow Review - Using Coupons and Store Loyalty Cards

How will I tackle the food expense?  How will I lower it?  Should I start using coupons?

I have to admit.  I was not a regular coupon user.   Whenever I went to the store, I typically just stocked up whenever I saw a good deal on a product that I typically bought.  I was a creature of habit and had bought enough of some products that I knew the sales cycle.  For instance, whenever pasta sauce was on sale (like 2 for $6), I knew that should take advantage and buy a few jars of sauce.

After the restructuring, I was wondering whether I should look more closely at coupons. 

Use Coupons?

Should I start using coupons more frequently?

I have never really been a big fan of most coupons found in the newspaper or sent to our home.  They were for products that I didn't use and I thought that these products were generally overpriced.   Occasionally, I would see a coupon for a product and take the time to actually cut clip them, but then I'd forget about them whenever I was at the store.

Store Loyalty Cards

Besides the creep factor from giving a company insights into my purchasing decisions, I find that store loyalty cards save me quite a bit of money.   I guess there has to be some give and take to get a deal.  I shop regularly at Safeway and there are too many deals that are available to club members that are not available to non-members.  Also, I found that if I registered online, I could sign up for "just for U" digital coupons that give me discounts on products that I typically purchase and some other special ones as well.

I think that getting a store loyalty card is only worth it if you shop there frequently enough and where you buy things you actually need.  I have enough cards in my wallet, I don't need any more and there has to be a compelling reason for me to use another card.

Also, like anything, you don't get a deal if you don't actually consume or use the product.  One problem with shopping at most stores is that I'm constantly bombarded with "deals".  I've learned not to get tempted.  Unless the special is on a product that I need and/or typically use, I just walk on.  

Post Restructuring Cash Flow Review - Food Expenses Revisited (School Lunch)

I had done a review of our food expenses for the month, and I had neglected to include one category.  School lunches.  We were a very busy household and one thing we did was buy hot lunch for both of our kids.  This saved time and the kids seemed to actually eat their lunch whereas whenever I made lunch for them, most of the food came back.

Here's an updated table of our food expenses for the month before the restructuring and the month after.

	Before	After
Groceries	$580	$340
Eating out	$350	$100
School Lunches	$184	$184
Total	$1114	$624

Wow - we were spending a lot on food each month.  That's all I could think - Wow. 

School Lunches

As I reviewed our expenses, I thought that I should try to make lunch for my kids rather than have them eat hot lunch at school.   I looked at how much I could potentially save by making lunch.  A lunch consisting of a sandwich with peanut butter and jelly (or one made with turkey and/or salami) and multi-grain bread, a fruit strip, juice and another snack or fruit would cost around $2-$3/lunch.   Lunch at the schools generally cost between $4-5/lunch.

Was it worth it to make lunch?

I would be saving between $1-2/day.  But, what were the costs?  Time.  Waste.

We were still busy in the morning and it takes time to make lunch.  I was taking time away from other things that I needed to do.  Get kids breakfast, get them dressed, brush their teeth, organize their materials for the day, and then get ready myself.

Also, during the Summer, I made lunch for the kids every day, and they didn't eat much of the food that I prepared.  I worried about whether they were getting enough food and energy for the day and I worried that we were just wasting food.

Ultimately, we decided that it would be easier and better to just let the kids continue to get hot lunch at school.  It saved time and they enjoyed it.   The school lunches weren't like the ones we had when we were kids.  They were actually healthy and there was variety.    We gave certain parameters for lunch.  No candy.  Milk at least 2 or 3 times per week.  Fruit was a must.  They should only get what they thought they could eat. 

Also, to balance out the cost, maybe I would make lunch once or twice a week.  

Post Restructuring Cash Flow Review - Expenses (Food)

Now that I did a review of the expected income, I now had to do a review of the expenses, fixed and variable so that I can see if there is a gap.

I had listed some fixed and variable expenses. 

Fixed:

• Mortgage 
•  Daycare/Preschool
• Gas/Utilities
• Taxes (property and income)
• Food
• Insurance

Variable:

• Credit Card bills for daily and other expenses such as clothes, dining out, services (TV), and entertainment
• Savings - retirement, college and other

There were some expenses that were not going to go away or change, such as the mortgage, but I knew that even if some expenses were essential, that I could possibly make some changes to lessen the expense.

Target: Food Expenses

One area that I targeted was food.  While food was an essential expense, it was an area where I felt I could control the extent of the expense.   I did a comparison of food expenses before I found out that I was affected to my run rate afterwards.  The results were quite eye-opening. 

 

	Before	After
Groceries	$580	$340
Eating out	$350	$100

I didn't realize that I was spending close to $1,000 per month on food!  The groceries came from a variety of stores depending on what we needed.  I shopped at Whole Foods for some basic organic items like fruits, vegetables and meat, Trader Joe's for some specialty items that we enjoy and can't find anywhere else, Safeway for some basic things, 99 Ranch for the ethnic items and the local farmer's market.  Since I worked full-time, I was so tired at the end of the day that it was hard to think about cooking, so I think we ate out instead.   While I tried to plan a menu each week, we ended up not eating a lot of the food that I bought and we wasted so much food.  I felt so guilty about this, but I always had good intentions.

To buy or not to buy organic

After the restructuring, while I had to take a hard look at expenses, I still felt that some areas were not worth the compromise.  Since we had small children, buying organic was a must, such as with milk and meat products.  I was willing to make do without or do with less if it meant buying organic milk, for instance.   The Environmental Working Group (EWG) puts out a list of the fruits and vegetables with the most pesticides (and should be bought organic) and those that are the lowest in pesticides.  I generally use this as a guide to figure out what I should buy organic.

One way to control food expenses

Some use the envelope method to allocate how much should be spent on food each month, but I chose to get a gift card that I could reload. That way, I could put down how much I wanted to spend per month at that particular store.  This was one way to control the expense and also keep track of my run rate for that particular store for the month.   It was too hard to keep track of the overall food expense when everything went on the credit card and I wasn't disciplined enough each month to do an analysis at the end of each month and break out and calculate all of the food expenses. 

Eating out costs went down

One other thing that I noticed was the amount spent eating out went down significantly.  This was not surprising.  I had more time now.  I had more energy now.  While some healthy meals could be found at restaurants, it's not the same as cooking at home.  I could control how much oil, salt and fat was put into the food.   Not only that, but cooking was always an enjoyable experience for me.  It was almost like therapy.   Cooking is a creative process from picking all of the elements, putting them all together so that it all tastes good.   

While we still ate out a bit, it wasn't a regular occurrence anymore.  My kids seemed to miss it a bit, but when we eat in, we have more time.  We now have time to go to the local park or go out for some treat like frozen yogurt. 

Cash Flow Review - Unemployment Insurance Benefits

The most pressing thing to do was do a cash flow review.   I had to take a look at incoming income and compare it against expenses, and ultimately create a new budget. 

What income did I have coming in?

Income:

• Work - since my husband was still working, I could count his income in my calculations.
• Unemployment - through California's unemployment insurance program, I would be entitled to some benefit.  The question was, how much and for how long?
• Severance -  I got two weeks of pay for each year of service.  I could apportion part of the severance and allocate it weekly or monthly to meet any expenses.  If our income could support our current expenses (with adjustments to current outflow), then I could possibly save the severance and use it for unexpected expenses.
• Other - could I find any part time work? Would any investments pay any dividends?  

Luckily, my husband was still working and so that put a lot of pressure off, but I had to see if there was a gap.  We needed my income and I didn't know if we could adjust our outflow to conform to his income only.

Unemployment, although small, was at least something.  I had talked to some other former co-workers that were affected and they complained about how little it was compared to their former salaries.  I didn't understand this complaint.  It was something.  Something was better than nothing.

If a person loses a job through no fault of their own (such as in my case with a layoff), then the California Employment Development Department's (EDD) Unemployment Insurance Program would provide weekly unemployment insurance benefits.  This is meant to enable people to cover basic life necessities while they conduct an active search for work.  It is not meant to cover each person's salary.  This insurance program is paid for by employers and the EDD administers the program.

What did I need to do or know about this?  Before filing a claim, I had to be aware of a few things:

1.  Eligibility: in order to receive benefits, claimants must meet certain eligibility requirements, such as receiving enough wages during each claimant's "base" period (explained below), be partially or totally unemployed through no fault of their own, be available for work, be physically able to work, and be actively looking for work.

• Wages to establish a claim:  when I file a claim, the EDD checks with the employer and the employer reports wages to the EDD.  The EDD then uses this  this information to decide if an individual earned enough wages in a base period to establish an unemployment claim. 

• What is the "base" period?  A base period is a specific 12-month period.  There are two methods for determining the base period, the standard base period and the alternate base period.
• The standard base period is the first four of the last five completed calendar quarters prior to the beginning of the claim.  For example, if a claimant files a claim that begins in April, May, or June, the claim is calculated based on wages paid between January 1 and December 31 of the prior year.
• The alternative base period is only used if there aren't enough wages earned in the standard base period and one meets the other eligibility requirements.   The alternate base period is the last four completed calendar quarters prior to the beginning of the claim. For example, if your claim begins in January, February or March, the claim is calculated based on wages paid  between January and December of the prior year. 

• What would be the weekly benefit amount?  The weekly benefit amount could be as low as $40 to the maximum of $450.   The weekly benefit amount is based on the wages earned during the base period of the claim.  Generally, to establish a claim I would have had to have earned at least $1,300 in one quarter of my base period  or $900 in my highest quarter and total base period earnings of at least 1.25x my high quarter earnings.

2.  How to file.   There are 3 ways to file a claim.  Online, by telephone or by mail.

• Online:   since I had access to a computer, the easiest and fastest way to file a claim was to apply online.    I went online here and applied.  I had to gather some information (notably the wage information for the standard base period), but it was a relatively easy and simple process. 
• Telephone:  there is a toll free number that one can call between 8 a.m. and 5 p.m. (PST) Monday through Fridays, except holidays.  For English use 1-800-300-5616.
• Mail/Fax: to file a claim by mail or fax, an application can be accessed online at www.edd.ca.gov/Unemployment, then filled out online and printed and then mailed.   I don't understand this. If one has access to a computer, he/she could just file online.  There is a reason why one would mail an application (perhaps if they only had access to a public computer such as a library, they would want to mail it, but how would they print out the application?  I would presume that one could just call the EDD and have them send an application, but this would delay the process.

3.  How long would it take to receive benefits?  Generally, there is a 7 day waiting period before I would receive any benefits. The EDD now issues a EDD Debit card to deliver unemployment benefit payments.  I had to activate the debit card, set up an account and then I was able to transfer the funds to my bank account.  I could also use the debit card on its own if I wanted to.

4.  What are the other requirements?  I know that every 2 weeks during my claim, I would have to certify that I still meet the eligibility requirements. 

5.  How long will benefits last? While a claim is effective for a year (I have a year to claim benefits), I would be eligible to receive between 12-26 weeks of benefits.  The number of weeks may vary depending on earnings during the base period.  Unfortunately, in the event it takes me longer than 26 weeks to find a job, I will not be eligible for federal unemployment extensions.

6.  Other:

• Would my severance or vacation pay affect my benefit amount?
• Thankfully, receiving severance will not affect my eligibility to receive benefits.
• In terms of vacation pay, whether this would affect my benefits depends on whether I was given a date to return to work.  If yes, then the amount paid is deductible from my benefit. However, this was not the case for me, so any amounts paid for vacation pay would not be deductible from my benefit.

• Would income tax apply to the benefits?  
• California State Income Tax:  no California income tax would apply to my benefits.
• Federal Income Tax: federal income tax would apply to my benefits.  I was able to elect to have EDD deduct my federal income tax liability from my benefit amount.

I was able to derive much of this information from the EDD site.   It's not an easy site to navigate, but a lot of information can be found there.  I just summarized some points here that were pertinent to my situation. 

Unemployed - Cash Flow Review

Even though I got severance and wouldn't have to worry about health benefits for a few months, I still had to review my cash flow.  I wanted to see how much was coming in and how much was going out.

I used an excel spreadsheet to look at my past expenses and compared it to what I thought should be coming in. Luckily, my husband was still working, but would his income be enough to cover all of our expenses?

We currently live in an area with one of the highest costs of living in the country.  The median price of a house is well over $500,000 and the cost of basics such as fuel, food and transportation is also high.

I used an excel spreadsheet to list our run rate of fixed and variable expenses.

Fixed:

• Mortgage 
•  Daycare/Preschool
• Gas/Utilities
• Taxes (property and income)
• Food
• Insurance

Variable:

• Credit Card bills for daily and other expenses such as clothes, dining out, services (TV), and entertainment
• Savings - retirement, college and other

Then I did a review to see what, if anything, I could cut.  It made me think of what was a "need" versus what was a "want".  I knew that I couldn't take out basics such as shelter (mortgage) and food, but even within the category of "food" I knew that there were choices.  Would I continue to buy organic?  Would I change which supermarket I go to so that I can minimize this expense?  I had to take a hard look at everything and nothing was off the table.   All of these "choices" was really dependent on what our cash flow looked like and whether our income could cover our expenses. Where could I cut the "fat"?  Was there any "fat"? 

Losing my income was a blow, but when I took a closer look, I realized that if we made a few adjustments, we would be OK.  There had been a change in my mindset. 

Now Unemployed - Financial Review

Now that I was unemployed, I had to do a financial review.   I had to take a close look at all facets of my finances.  While I was still in a state of shock, I had to do a reality check to either temper my panic or see if I had the ability to take some time off.  What things did I look at or consider?

Cash Flow Analysis and Review

• Did we have enough income to meet our current obligations?
• Would we have to make certain adjustments?
• Where was our money going and what changes needed to be made?

Debt and Other Obligations

•  How much debt did we have and what were our payment obligations?
• What were our other expenses and what could we do?

Long Term Goals and Net Worth

• What was our net worth and what were our long term goals?
• Would we be able to meet our goals?

Restructuring Day +1

It had finally started to set in.  I didn't have a job.

I had so many mixed feelings.  Panic, anxiety, relief, happiness and even joy.  In some ways, I saw this as a blessing in disguise.  I had not been happy for a while and had thought about leaving, but it was just so hard to move on especially since I was comfortable.

What did comfort mean and how did it impede me?  It always takes a while to get used to any place, and I had finally gotten used to all of the processes and procedures, gotten to know key people in each department that could help me get things done, made some friends and even enjoyed what I was doing.  What made me unhappy? The commute, the feeling of stagnation and the feeling that there was no possibility of advancing my career.   When I looked at my job objectively and weighed all the pros and cons, I knew that I had to leave.  It was just a matter of when and where. 

It made think.  What did I really want?   I had talked about finding the right balance in life and it was a constant struggle.  There was an inner war between my ambitious career self and my mommy self.  My desire to advance in my career was at odds with my mommy self that wanted to take a step back and enjoy my kids.  I think feelings ebb and flow and there isn't just one trajectory, but I was going to stay on the path that I was on until something happened. 

Now that didn't matter.  The decision was made for me.  My ego was bruised a little bit knowing that I was thought of as fungible, but when I thought about it, everyone is fungible.   But, what restored my faith in humanity was the immense response I got from everyone.  Everyone was so supportive and seemed to care about me.

I think that in any situation you can look at things positively or negatively.  I could choose to see this as an opportunity or a calamity.   Granted, not everyone has the luxury of seeing things this way.  I wasn't a single mother living paycheck to paycheck and heavily dependent on this income.  I was lucky, and I realized that I had the luxury of seeing things this way.  In any case, a job loss is hard.  It forces one to do a reality check.

1.  I had to start looking hard at our finances and see if we could do without my income and for how long, even considering the severance. 

2.  We had to look at health care options.

3.  I had to look deep and assess what I wanted to do.  Is this the time for a new direction, do I try to find work right away or do I seize the opportunity and try to take some time off of work and try to enjoy time with my kids (of course this was dependent on an analysis in #1 above)?

 

Restructuring Day

What did I feel when I found out it was me?

Relief.

I finally knew.  After months of uncertainty and anxiety, it was good to finally know.

What else did I feel?

Shock.

I had thought it could be me; it's different when it is actually me.

Sadness.

I was going to miss my co-workers, all of whom were shocked and dismayed.

Happy.

I hadn't been happy for a while, and now I was free.  It felt strange to be happy.  Was it shock? Was it related to the relief? Either way, I was actually happy.

A bit Fearful.

What were the terms - severance (provided I signed a full release), and the company would pay the health care premiums under COBRA for a few months.  Overall, it wasn't a bad package.  The only thing I was really worried about was health care.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) would allow me to get coverage under the company's group health plan for a limited period of time, around 18 months after termination.  Generally, COBRA applies only under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, and other life events.   While I would still get access to health benefits, I would be responsible for paying the full premium.  It was really expensive.  While I always had to pay a contribution, it was shocking to see what the full premium would be.  This was when the fear started to creep in.  After the company paid period expired, what would I do?

Restructuring Wait Dance and Mixed Messages

I was getting a few mixed messages from my boss.  Everyone was reading closely everything that was being said.  Some knew that they wouldn't get affected, but for the rest of us, we felt like sitting ducks.   If I was encouraged to go to a seminar a few months away, I was left thinking, "does this mean I'll be OK?  Would he/she have even offered if I was on the list?"  Still, I couldn't be complacent.  I could still be on the list.

The List.  I knew it was floating about and I was so curious as to whether I was on it.  I was acutely sensitive to how I was being treated.  Was I being treated differently by others who may have access to this list?  

It was such a psychologically damaging time.  The longer it took, the more anxious I got.  I had gotten a few calls from recruiters during this time and I had started to apply to jobs, but in some ways, I still wanted to see what would happen. 

I was being called into several meetings.  They were all so pointless.  The general managers still couldn't go into details as to when, where and who.  I guess they had to do something rather than nothing, and showed to some extent that they were conscious of the uncertainty and its effect on their employees, but it only served to remind me that something was going to go down.  I didn't need the reminder/distraction.   I just wanted them to get it done. 

Burnout and Guilt

I am so.....tired.

I felt like I was on a relentless daily treadmill.  I wake up, get the kids ready for school and find some time to take a shower.  Since I usually pick the kids up after work, I head out the door first.  After work is done, I rush to pick the kids up from extended care/daycare (they are usually one of the last few ones at care), then I rush home to make dinner.  After dinner, we do homework, then start the bedtime routine and then the kids go to sleep.  I get an hour to myself and then I go to sleep, exhausted. And the cycle starts over again. 

On top of all this, I felt so guilty.  My kids were growing up so fast before my eyes, and I felt like I didn't spend enough quality time with them.   I didn't think that I had to be like June Cleaver, but life was such a whirlwind and I felt like I was missing out.   I felt guilty whenever I left them in daycare.  I felt guilty whenever I picked them up.  Everyone has a different idea of what it takes to be a good parent (or mom) and I wasn't living up to my own standard.  Compromise is necessary sometimes, but I felt like I was making too many compromises. 

Something had to give. 

I know that I am not alone in this, and most people have to work.   What was I trying to find?  Balance.  It was so elusive and I have struggled so long to find it.   I had yet to find balance in my life where I could still work and deal with the mommy guilt.

Could I just quit?  I hadn't thought about it seriously before.  I was thinking of possibly looking into part time options, but they are hard to find and this wasn't a good time to ask.  Plus, I wanted to continue working.   Despite the struggles I was facing - being tired and feeling guilty, I got some benefits from working.   From working, I continued to develop in my career and the intellectual stimulation I got from working was worth it to me.  Also, like most people, we needed the income.  But, yet, the drive to advance was waning especially at this time.   My kids were young.  I felt like they needed me and my guidance.  What could I do to alleviate this tension?   How do I reconcile the feeling that my family came first with my desire to continue to work? 

There have been quite a few articles lately about how women can't really have it all.    See Ann Slaughter's article in the Atlantic here.  Now, I don't think the point of the article was that women can't actually have it all, but that there needs to be more institutional changes to fully support people (especially women) who want to have a career and family.  If we don't, then we will continue to lose women as they try to navigate through the ranks of corporate America.  Also, as a society, don't we want to find ways to support hard-working and accomplished people who also happen to have a family?  Shouldn't we trust people and give people the flexibility to determine how and when they should do their work?

In terms of "all", what does it mean to say, to have it "all"?  I think this is a deeply personal idea or thought.  For me, it's a combination based on my culture, my own upbringing, expectations for myself and those that have been thrust on me, and the needs of my family.   At this point, I seemed to have it "all".  I had an established career, a loving husband and beautiful and healthy children.  I also ate out a lot or made frozen food, had little time to play with the kids who were starting to act out, and a messy house.  To many, I seemed to have it all, but I was still not satisfied.  I was still not ... happy.

I don't know what it will take to be "happy".  In some ways, I think that happiness is definitely a state of mind.  Also, did I have the luxury to care about being happy?  I was definitely content, but what were my drivers, and what would satisfy my needs and desires?  

So Not the Right Place.....

The moment came after the first person left.  Ugh.  I still had to meet a few more people.  I so wanted to leave.

This was not the right place for me at this point in my life/career.

The interview started with the usual dance.  We were both assessing each other.  He was trying to assess whether I would fit in with his team and with the company culture, whether I had the right experience or had the ability to adapt and learn, and whether I was ready for the challenge ahead of me.  I had no doubt that I would be able to do this job, but I wanted to see if there was any work/life balance, and whether I would be a good fit with him and his team.  Everyone was really nice and thankfully, very candid about their work life.  One was open about how he typically worked around 12-16 hours per day in addition to some hours during the weekend.  He did say that he was able to balance work and life and that if anything came up, he'd make it up later.  I was thinking, hmmmm, if he worked 12-15 hours a day, when would he be able to make it up, but I didn't bring up the contradiction then.   I don't know if my face said it all, but I already knew that I didn't want to work there.   It was a great company.   They made great products and I would be working with some of the smartest and brightest in the field.  But, it was not me.  At least at this point in my life or career. 

I went into this interview not really knowing what I really wanted to find in my next job.  I wasn't sure I wanted to find work right away and thought that maybe, if I did get laid off, I should just take a break and explore options; however, this was an opportunity, and I should at least explore it.   But, I was doing myself a great disservice by not listening to my inner voice.  

My inner voice was telling me I should just see what happens and in any case, I should explore options and do what I wanted to do.  What did I want?

Restructuring Countdown

Was it going to happen today?  Was there extra security outside today?  Were there moving boxes in the hallway?

Each day we wondered whether it was THE day.  Each day, I was disappointed because it meant another day of uncertainty.  In some ways, I just wanted the company to just rip the band-aid off and just do it.  I understand that there are legal implications to a world-wide restructuring, but still, it was almost annoying how long it was taking.  It had been months since the announcement.  The executive leadership was of course vague on the timing.  There seemed to be constant meetings.  Meetings for department heads to meet with their terms, and then smaller subgroups to meet to discuss the progress.

I had been sending out a few feelers, but I still wanted to see what would happen.  While I was still unsure whether I'd be on the List, I still didn't feel like it was my time to go.  I still wasn't ready to move on.

I had other considerations as well.  I had been at the company for a few years, and my department was supportive of a work/life balance.  As long as the work got done and the clients were happy, there were no requirements for "face time."  I set expectations for my clients and I was generally able to leave at a reasonable time each day so that I could pick the kids up from school, spend a little bit of time with them and make dinner.  This was an established company and there wasn't an 24-hour mentality.

I realized that if I were to move to another company, then I would have to face a few things.  Some of which I wasn't ready to face.

1. Establishing oneself.  One, I would have to establish and prove myself again.  Developing relationships and finding one's way in a new department always takes some time.  
2. Work/life Balance.  Also, I wouldn't know right away whether there was a respect for a work/life balance.  Glassdoor.com was a good resource and I could get feel for the inner workings of a place, but I had to keep in mind whether the post was new or old and whether the poster could be biased or not.  If the reviews consistently listed work/life balance as a pro, then there was some comfort, but I also had to be mindful of which department this poster was in.  While there may be a respect for a work/life balance in one department, this doesn't necessarily carry over to other departments.  I worked in the G&A function, and so there may or may not be similar expectations than for the engineering or R&D staff. 
3. Fit.  Fit at any place is extremely important.  If I'm going to spend a significant amount of time in any place, it's really important to find a place that fits me personally and professionally.   I'm not talking about politics, but philosophy in terms of how to approach problems.  I could not work at a place where it is so rigid and inflexible and did not believe in the spirit of compromise and cooperation. 
4. Commute.  Any new place would have to be relatively close to my residence.  I didn't want to commute to a place where I knew the traffic would be horrendous. 
5. Type of work.   I could do many things, but I had started to truly enjoy what I was doing.  I didn't want to branch out quite yet and wanted to continue to do what I was doing.  Finding the right position with a particular focus would take some time.  But, could I afford to be picky?

 Also, in the back of my mind, I was also thinking.  If I DID get laid off, would it hurt to just take some time off to really think about what I wanted to do?  Could I afford this luxury?

Restructuring Sanity

How did I maintain my sanity during this uncertain time?  Perspective helped.  It was hard, but I tried to think about how others had it much worse than me.  I also looked at what was happening around the world, and realized that even if I did get laid off, I'd still be fine.

Also, since I didn't actually know when things were going to happen, it didn't make sense to let my anxiety affect me too much.  There were things that I could still do.  I still had a job to do (at least as far I as I knew), and I could be proactive and see if there were any other jobs that I could do.   I was still a professional and I didn't want to shirk my responsibilities at work, and I also didn't want to actually put myself on the list if I didn't do my job.

All of this made me think of one thing.  Loyalty.  It seems like the "old" days where people worked for one company for life was over.  Companies are no longer loyal to their employees and employees should feel no loyalty to the companies they work for.  Is this right? Will this attitude actually help or hurt people/companies?  Even though there are expectations of loyalty,  yet, for some strange reason, I still felt some loyalty.  I still liked the people that I worked with, and I liked the company that I worked for.  I believed in their purpose and admired its business ethics.  A restructuring was inevitable considering its lack of performance, and yet, it was still a surprise when a restructuring was announced.

I wanted to stay (of course, it wasn't up to me), and I wanted to contribute to a turn-around (if any). 

This feeling isn't mutual.  Business is business, and the business has to be profitable.   Businesses will have to do what it takes to stay profitable or become profitable or else it will continue its slow decline into bankruptcy.  Also, the cold and objective eye towards profitability has to ignore the human aspect, but how can that be possible?  When managers or heads of departments look at the numbers and targets for reduction, they have to lay off people.  If you've worked with a person for years, can it be an easy task to lay off a person, especially when you know they depend on their job to make a living and support their families?  I didn't envy the hard job ahead for my department head.

Again, how did I keep my sanity?  Perspective and preparation.  I had some time to figure out what to do.  Now, the question was - what was I going to do?  

Restructuring Dance

I decided to just continue working, assume I wasn't going to get laid off and hope for the best.  If any new opportunities came my way, then I'd be willing to explore them.  However, knowing that a restructuring was going to take place was a huge distraction.  I saw lots of closed doors and small groups converging to discuss who would be the most likely candidate to go.  People didn't know whether to continue working on certain projects because they didn't know whether these projects would even survive or if the other people working on them would survive.  Gallows humor seemed to rue the day.

People kept telling me - Oh, no, you'll be fine.  There is no way they would get rid of you. 

In the back of my mind, I kept things in perspective.  This was going to be a huge restructuring.  I was as much of a target as anyone else.  Plus, as with any department, it was a political place.  I was not a pet.  Sure I got along with the head of the department and I was pretty sure she didn't not like me, but again, I was not one of her favorites.   Some of her favorites came from former companies and others were personal friends.   At the end of the day, I would assume that personal relationships matter and if push came to shove, she would rather lay off someone else than her friends. 

Restructuring - Part I

I knew that the company hadn't been doing well lately.  When the CEO mentioned that there would be a restructuring, I wasn't surprised.  What surprised me, really, was how anxious I was feeling, and how fast the rumors would fly.  I really wish that companies would just execute and do the restructuring the same day as the announcement.  Now, we were all stuck with the questions.  When? Where? Is it me?

I believe that when companies decide to restructure, they should do it as soon as possible after the announcement or just do it the same day because in the meantime, everyone is anxious, nervous and productivity drops.  Morale, which is already low, drops even lower.  Also, the longer the company waits, it increases the chance an important employee will leave.

Luckily, the economy seemed to be picking up and those with the skills or desire were starting to look around.   

Hmmm, I had to make a decision.  Should I wait it out and see or should I start looking?