How to Deal with a Setback

So, we've all been there... Things are going along just peachy... We're working our snowball, or avalanche, or other method, then... BOOM! Our world gets rocked. And we find ourselves with new worries and concerns that didn't even exist a month ago. And one of them, even if it's not highest on the list, is the financial fallout. All of the sudden, we have less money that needs to do more. We keep hearing that the recession is over, but it isn't. Not by a mile. This post is inspired by a friend's recent stroke of misfortune. His company recently told them all they could each take a 10% pay cut or 15 employees would be let go. To their credit, a unanimous vote was rendered... So how do you deal with a $5000/year setback? First, let's break it down... $5000 per year translates to $416/month, net of taxes you have to replace $312 per month. First, cut all your "disposables" by the same amount - 10%. Groceries, gas, gifts, etc... That will probably take care of $100, but let's say $112 just so we can start dealing with round numbers. $200 to go. Next, cut the cable. It's the most obvious, and maybe most painful option. There's another $50. Don't forget, if you tithe, that will drop. There's another $50. This last $100 may be the hardest to compensate for. There are several options. You could change your cell phone plan. Could you live without your smartphone? Research insurance rates - higher deductibles, different companies. $50 left... Try not to touch your retirement or savings, because if these amounts are a % of your salary, they will be reduced already. Don't cut your health or life insurance either. Not having these can make a bad time turn dire. Lastly, cut your debt repayment by the remaining amount... So, there. How to deal with a financial setback. Im thinking about sending my plan to Congress. They're the only body I know that asks for a raise when told they need to cut expenses.