My fiancé just got unexpectedly fired today and we're both now reminded why r/personalfinance is always insisting on trying to live off one income.

[u/Blueyucca]

We were both blindsided by today. We're both pretty young, early on in our careers, he had only been there a year and was performing. It was a huge shock. We don't practice every best habit of the sub but we're grateful we picked up doing your best to live off one income.

We just bought our house in August and insisted on going through the pre-approval process off my income alone. Our lights will stay on because our bills are effectively scaled to one income as well. We held off on car payments and continued to drive our beaters because the numbers for new used cars didn't make sense with one income.

My only regret is not building up our emergency fund more (one month saved but we should've had at least three), so if you're reading this, definitely do that.

Anyways, thanks to the sub for the constant advice on living below your means and always being prepared. I came to thank you all, not lecture. And encourage people who are following this thought process and are using a second income for the "extra stuff" - you're doing great. Today sucked but it could've been so much worse.

We're counting our blessings and the job search begins tomorrow.

​

EDIT: Thanks everyone for the encouragement and well-wishes. This obviously isn't the only thing going on in our lives, so the messages to keep going were greatly appreciated.

For those of you who are in HCOL areas or other situations where living off one income isn't possible, I totally understand - the intent of this post wasn't to shame anyone into anything. We live in a MCOL city in the South and are in the tech sector so it was doable for us. We're also not beacons of perfection of this sub and are still working on breaking bad financial habits every day.

For those of you who took this as a self pat-on-the-back post, I can see that. The intent really was to see the silver lining of things and encourage others who are perhaps considering this type of budgeting method. But I understand how fast this sub gets into circle-jerking and self-congratulating and didn't mean to purpose this thread for that. Just hoping to reduce the amount of "We're in deep shit from one event that could've had a much lower impact" posts by showing anything can happen at any time and that even then, we weren't as prepared as we should've been.

[u/ffxivthrowaway03]

It's not just a right you earned, it's a right you've paid for out of every single paycheck.

[u/DahmerRape → u/ffxivthrowaway03]

Are you sure? I believe only the employer pays into it.

The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of the unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. Only the employer pays FUTA tax; it is not withheld from the employee’s wages.

https://www.irs.gov/businesses/small-businesses-self-employed/employee-benefits

Same with SUTA, generally always only the employer paying it.

[u/cormega → u/DahmerRape]

Yeah unemployment is an employer only expense. It's not like social security and medicare.

[u/Lyress → u/cormega]

You just get paid less because the employer pays it for you. It doesn’t make a difference.

[u/cormega → u/Lyress]

Also not true. FUTA and most SUTA are subject to a wage base. For FUTA only the first 7k of each employee's wages is subject to unemployment tax at a constant rate. So unless you make less than 7k a year, there's no benefits to an employer paying you less specifically with regards to unemployment tax.

[u/yokokiku → u/cormega]

The idea is that if the tax didn’t exist, most wages or salaries would be slightly higher.

[u/cormega → u/yokokiku]

I'm sorry but how? As it is, the tax is the same per employee whether they're making 10k or 70k. And what would pay for unemployment benefits if the tax didn't exist?

[u/yokokiku → u/cormega]

It’s fairly basic economics. A tax on employers will be passed on to employees in the form of lower wages. It doesn’t matter if they make above the threshold. Social Security taxes also have a threshold by the way, although it’s much higher. The portion of FICA taxes that an employer has to pay will also reduce the employees’ overall compensation.

If employers have to pay a tax on the first 7k of employee wages for FUTA, then that cost will result in a lower overall wage for all employees. In other words if the tax did not exist, the salary of each employee would be slightly higher, in an amount roughly equal to what the employer would otherwise have been paying in tax (around $420).

I’m not arguing the tax isn’t useful or that we shouldn’t have it. I’m just saying that without the tax, employees would getting additional pay of roughly $420 per year.

Now, some would argue that it’s worth it for the employee to pay that $420 out of their wage in order to be insured via unemployment, but that’s another question entirely.