Radical Proposal: Simulate a job loss.

Frugal Zeitgeist (LOVE. her. blog.) posted an incredible link to WSJ about Life on Severance.

Some choice paragraphs:

Paul Joegriner hasn’t worked since March 2008, when he was laid off from his $200,000-a-year job as chief executive officer of a small bank. But you wouldn’t know it by appearances.

His wife, Marzena, shuttles their two young children to private school every morning. The family recently vacationed in Virginia Beach, Va., and likes to dine on Porterhouse steaks. Since losing his job, Mr. Joegriner, 44 years old, has had several offers. He’s turned each down in hopes of landing a position comparable to what he held before.


When Michelle Patterson was laid off as an executive director of marketing for a publishing company in January, she figured she could subsist comfortably, at least for a while, on the $20,000 she had reserved from her savings and severance combined. She continued to eat out regularly and made daily Starbucks runs.

Ms. Patterson sometimes wishes she had cut her spending earlier. But the money spent networking and socializing, she says, has “helped [me] keep sane.”martin-margiela-money-shoes

Although their rent was cheaper, Mr. Hipsher says the family continued to spend like before. They moved with three cars — two BMWs and a Chevy Silverado. They continued to buy cases of $36-a-bottle wine. They spent $250 a month on a cleaning lady, and Mr. Hipsher dropped $50 a week on flowers for his wife. The couple still dined out regularly.

“We were stupid,” he says. “You become accustomed to a certain lifestyle. When your world changes and things dictate that you change, you’re pretty stubborn to give things up.”

FZ makes very plain and simple observations:

This guy spent his entire career in banking, most recently as a chief executive officer. If he can’t run his personal finances responsibly, what does it say about his ability to run a bank?

Buying coffee out every day instead of making it at home? Really? Seems to me that if things are as desperate as the man says, this isn’t a good way to blow $655 per year.


So go read the entire article now. I’ll wait for you here. Go.

Okay, now that you’re back…

This former-CEO is a bit of an idiot.

(Should I add his story to my Idiot archives? I have a doozy of a story coming up.)

He turned down several offers for 2 reasons: not enough pay, or the duties he was supposed to do, didn’t sound like what he wanted to do.

managermonkeyJust recently, he turned down yet ANOTHER offer that required a move out of state, citing that the contract had no guarantee of severance pay.


Have we not learned anything from the past year and a half?

The guy has 6 more months left to live, a $460,000 mortgage with a $2400 mortgage payment due each month.

They spend $26,000 each year on private school tuition that is getting cut next year.

They eat out all the time. He goes to 7-Eleven for coffee and because he recycles cups, he is spaving, saying that the habit only costs them $655/year.

Spaving = Saving money by spending.

If that isn’t the most ridiculous thing I have ever heard…

And they lie to the kids, telling them that Daddy is a freelancing consultant with “patchy income”.

If there is nothing more I detest in the world, it is softening reality and lying to your kids.

They probably already know, Paul.

He apparently has never craved a lavish lifestyle, but what do you call a $460,000 home, private school tuition, a wife who has the luxury of staying at home, eating and drinking coffee out all the time, and turning down 4 job offers with pretty decent pay (at least over $100k)?

Then he goes on to say that he’s thinking of installing a marble counter top in the bathroom..?

This is SO “The Idiot”.

If you didn’t want the job to begin with, based on the description of duties and salary range, then why the hell did you even apply for it?

The running theme in the story is: Regret.

Enough picking on poor Paul.

The running theme is:

Regret for:

  • Not having saved more money
  • Not anticipating a job loss
  • Not having cut back sooner

Every one of those stories say that they wish in hindsight, they had cut back sooner, instead of anticipating that a new job would pop up around the corner.

FB’s Radical Proposition:

We shouldn’t just save money for emergency funds.

Or calculate what we need each month on a budget to save as 6 months worth of expenses.

We should actually simulate it to see if it’s feasible.

Live it.

Take 6 months, and cut back on cable, eating out, coffees and what have you.

I can totally tell you that telling yourself “$1000 a month should be enough” doesn’t seem like it’s enough when you’re actually in the position going:

“Huh. Guess I actually needed more…”

cabbage-moneyBut if you put it in practice you will see for yourself that living like that for 6 months or a year, is possible (or not).

Hipsher in the story, even said:

“We were stupid,” he says. “You become accustomed to a certain lifestyle.

When your world changes and things dictate that you change, you’re pretty stubborn to give things up.”

I know it sounds strange, weird, even STUPID to some, considering that you obviously have the money to live without doing it.

But don’t knock it until you try it.

Give it a shot.

I’m not saying to do it forever.

I am saying to do it as an experiment, to see if it CAN be done and to mentally prepare yourself for any upcoming pain with a possible layoff or change in lifestyle that requires you to cut back.

Kind of like fire drills, or bomb shelter procedures. Test yourself.


About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.