On January 4, 2013, when my twin boys were just 2 months old, my husband called me in the middle of the day to tell me he was on his way home. He was suddenly and unexpectedly laid off from his 16-year career at his company.
My mind went into a tailspin and I could feel the walls caving in on me. How could this happen? How could they do this to him? He just got an iPad from them for Christmas! One of my worst nightmares was coming true and I felt totally helpless. The good news was that my maternity leave was ending in one week and I would be going back to my full-time job. This meant we would have my salary, severance pay and unemployment insurance to get us through. Plus a hefty income tax refund (thank you, twin dependents!) and other cash I had saved up prior to my maternity leave.
After crunching the numbers, I realized that we would still be short and our savings would quickly disappear if I didn’t make some major cuts. We were in a full-blown financial crisis. Thus began my quest to cut every unnecessary expense we could spare. Every-day minor purchases were cut unless they were absolutely necessary. That includes dry cleaning, books, DVDs, music, magazines, and even small things like a latte from Starbucks. I reassessed all of our monthly bills and made major changes to retain as much cash as possible, even if it meant having to pay more interest in the future.
Here are the major actions I took to keep us afloat:
I deferred my student loans. This was very easy to do for my federal loans. I called my loan company and they immediately put the deferment through as a “hardship forbearance”. I was surprised at how easy it was! I will have to pay the interest that accrues but overall I’m saving several hundred dollars a month by deferring. There is a limit to how many years you can be in forbearance so check with your lender.
I stopped 401(k) contributions. I was contributing 6% of my income in order to get the full company match. Stopping this contribution put at least $100 back into my monthly cash flow.
I reviewed our income tax exemptions. When is the last time you looked at this? Maybe you are still claiming a “1” with a family of four when you could be claiming a 3 or 4. You could be getting a lot more money in your paycheck by adjusting your federal and state tax exemptions. Talk to a tax professional about what is best for your family’s situation.
Switch to generic brands where it makes sense. After realizing we were spending almost $200 a month on premium infant formula, I checked with my pediatrician about switching to a generic formula. She was fine with it and so we made the switch. Going from the name brand to a big box store brand cut our formula costs in half. Of course, this is not a decision to be made lightly. You may not feel comfortable “going generic” even if it saves you money. That is a personal choice. But if you are really tight on funds and you want to make the switch, do not feel guilty about this decision. My kids loved the new formula and I think they turned out OK!
Cut out the eating out. This was another hard one. I love getting take out delivered! Fridays and Saturdays were my treat nights when I didn’t have to cook. This was costing us about $200/month. I sucked it up and promised myself to cut back to only 1 take out dinner a week, which is really, really hard for a new twin mom who just wants to pass out at the end of the day! I rely heavily on ready-made meals from Trader Joe’s and I only make easy, no fuss recipes (no more than 5 ingredients).
Apply for medical cost reduction. Hospital bills related to a multiples pregnancy can cripple a family already in financial trouble. But there is aid available if you just ask! Call the hospital billing department and ask about applying for aid. You will have to fill out a huge application and submit documentation to prove your financial hardship but even if you get a few hundred bucks taken off your bill it will be worth it.
If you lost your health insurance, and can't afford COBRA, apply for Medicaid ASAP. At the very least, you'll want your kids to get on Medicaid. I found that our kids qualified for aid but we as the parents did not because I made too much money. You'll need to go through your state's Department of Health & Human Services to apply (typically online), and once your application is complete you'll want to call them about once a month to find out the status. If it's taking longer because they are backed up with applications, it's worth it to go into the office (plan to arrive at least 30 min. before they open!) and stand in line to get the application pushed through. If you claim that your child has a medical need and needs to see a doctor ASAP (and really, what infant twins don't have regular doctors visits and extra services?) they will likely push your application through. Be super nice and patient in that office — it will get you far! Tell everyone your story and let them know you need aid for your kids ASAP and you may be able to leave the office with a confirmation letter.
If you DON'T qualify for Medicaid, you have a limited time (typically 60 days) to buy a medical insurance plan through the Marketplace. I recommend contacting your car/home insurance agent to find out if they are certified to sell health insurance. They can walk you through everything to get you the best plan that you can afford. You may even qualify for subsidies.
Find out what other state aid you can get. This may be in the form of free formula, groceries, diapers, etc. There are so many programs out there that you may not think to use. Don't be too proud! WIC, SNAP, food pantries, and other services may be available to you to help you get by. Contact your state's Department of Health & Human Services to learn more.
I also cut back by…
- asking friends and family for hand-me-downs of kid clothes and toys
- buying used baby items at my Moms of Multiples bi-annual resale
- selling our used baby gear on Craigslist/Facebook to make back some cash.
It has been a roller coaster for the past 6 years (including another job loss + my husband going back to school) and we are still not out of the woods. I have kept most of these “cost-saving measures” in place. Raising kids is expensive! But with a little creativity, you can get through a financial crisis and still keep your sanity.
Julie Burt Nichols is Twiniversity’s “Wizard Behind the Curtain”, serving as Editor-in-Chief of Twiniversity.com, Account Manager, and Instructor for Chicago Twiniversity classes. Julie is a full-time working mother to twin boys, born on Halloween. She loves serving as a resource and support for new parents, soon-to-be parents, and we-want-desperately-to-be parents. Julie is proud to be a certified child passenger safety technician, and the Twiniversity Resident Songstress/Jingle Writer.