59 – Lessons Learned from No Pay for a Month


Episode Overview:

In a previous episode, Ken mentioned he had to go a month without pay amid the crisis. He shares his takeaways and insights from that experience. The first lesson being that this experience has validated his decision to control his net worth. Next, Ken realized money is worthless without food to buy, and that there is a grocery baseline expense. There’s only so much you can cut when it comes to food. Finally, it’s important to loop in the kids on the negative impacts of no money and encourage financial responsibility.

Transcriptions are auto-generated, please excuse grammar/spelling!

Happy day to you. This is Ken Kaufman, and I am thrilled you’re here for Episode 59: Lessons Learned from No Pay for a Month. I mentioned in an episode recently how basically during the month of April I was not going to be paid although still working at my job now. I’m a chief financial officer so I’m on an executive team of a company that, before this COVID hit, was over 500 employees in total between all of our partners and everything.

Anyway, it’s been a very, very interesting process to go through. We’ve had to ramp our business down dramatically, and now we’re in the process of ramping it back up. The thing that I want to say first about lessons learned here is that a financial backstop…you can call it an emergency fund or just money in the bank, or money that’s available. It helps remove money stress from our lives so that we can do what it is we need to do. What I had to do during the month of April was really make some really hard decisions, take a lot of very decisive quick actions, and lead in a way that I’ve never been called upon to lead before. I found myself pouring myself into my work. I felt this increased responsibility to lead the people that I work with and to drive the change that needed to happen in order to help our business survive and then ultimately be prepared to thrive again when the opportunity came. You know, looking back at this last month, I think I’ve done some of my best work. I’ve accomplished a lot and my team and everybody I’m working with has accomplished so much. I don’t mean to just point it myself; all of this is a team effort.

But I could see that, if I was stressed about money during this period of time, I think I wouldn’t have been doing my best work. I think I could have been distracted and felt stress and pressure in other ways. The first lesson learned is making a commitment to get yourself ahead financially, to get some money saved in the bank, and to save for the future and start paying off debt. Those types of things, they are worth it and they pay off. My wife and I have been working on this for the last decade, really getting a hold of our finances, and being frugal, and reducing debt, getting money saved, and we both have walked away saying, “Wow, we felt very empowered during this period of time,” and we’re even more committed to doubling down on our strategy to be conservative with our finances in terms of eliminating all the debt, and saving and building up our assets or, in essence, building net worth.

The next lesson learned is that money is basically worthless if you can’t buy food for your family. Who cares how much you have in the bank? Who cares how big of a house you have or anything else if you can’t actually get food and feed your family? And so it also taught me that just money is not…another key lesson learned is it’s not just about having money. It’s actually having food and commodities available. My wife and I through the years, we’ve tried to be committed to having some type of a food storage or a backup plan. We’ve moved so many times in the last decade that each move we’ve shed more of this food storage because we had some stuff that was long-term types of food storage that would last 25, 30 years if taken care of and preserved properly as well as just having extra groceries and having the pantry more full than you need it with non-perishables. We had some but we didn’t have nearly as much as we had in the past. It gave us a lesson learned of let’s redouble our efforts there coming out of this and make sure that we don’t feel any stress or pressure around that should…even if we’ve got enough money and financial resources saved but we can’t get food, we could sustain life for a while and not feel a significant amount of stress around that.

Another lesson learned that we have realized is that we’ve already done a lot to try to cut our grocery cost, and it’s just really hard once you’ve invested time there to find more ways to cut. There’s kind of just a baseline of expense that you’re going to experience when it comes to paying groceries. Not that we’re perfect, I’m sure we could…we’ve been trying to learn how to conserve. It seems like every time I turn around, somebody’s doing a blog post, or a video, or a podcast bout how to save on your groceries, how to save on your groceries. The lesson learned here is there’s a baseline to keep your family alive and sustained. It is very hard once you’ve gone around the edges and nipped and tucked where you can. Makes it difficult to cut at some point so don’t feel badly if you’re seeing another video or another blog post coming across that’s telling you how to cut grocery cost and you’re just not able to.

One of the things that really hurt us when it comes to groceries during this period of time because this is one of our main variable expenses each month. I should probably reset here. I have eight kids. Feeding that family can be very expensive, and groceries are very expensive obviously for that many people. We are down to six at home but with some of the states having shelter-in-place requirements, all the other restrictions that have been put out there, the cancelation or doing school from home initiatives as well as my son being sent home from his mission or he was in Australia and needed to be in quarantine, when you take all of that into account, we’ve lived through this time with our two oldest boys at home, our 20-year-old and 18-year-old, and the other 6 younger kids. Those two probably eat as much as the other six combined. We’ve seen where our normal grocery spend is not lasting us through the week and we’re having to supplement, do an extra store run. We usually try to do the grocery shopping once a week. So, overall, groceries are hard to cut. Number one if you’ve already done some work on it, then there’s just kind of that baseline that needs to be in place in order to sustain life and then the second part is when you increase headcount inside your home and that puts some strain and pressure on.

Another lesson learned is that it’s really important that kids need to feel financial responsibility for the household. I’m really grateful that during this time of no income or no paycheck, we have focused on not sheltering our kids from these negative impacts of not having money coming in and we have not deprived them of this opportunity to learn and experience it. And I think it’s really important that they understand and feel a little bit of the pressure around it. Again, we’re okay financially but we said, “Hey guys, we need to conserve. We need to cut back. We aren’t going to be spending as much on movies at Amazon or we’re not going to be doing, you know, certain things during this period of time that are going to cost money.” And it’s been interesting to see their response. There have been some parts of it that have been hard, other parts have been easier and in fact they found some things that they enjoyed. For example, in our house, fruit is a treasured commodity. My kids each eat… my wife would estimate they eat about 3-5 pieces of fruit each day. Apples, oranges, bananas, you name it. We like to stock the shelves with that and they partake freely and we’re great with that.

What we’ve had to do in order to try to keep the grocery bills down during this time, because we had a specific set of money that was set aside for the groceries is the kids have actually rationed themselves down to one peice of fruit a day. And for them, it actually feels like a big sacrifice and it’s hard for them and it makes them stop and think about when they want to expend that currency that they have for that piece of fruit. Do they want to eat it at dinner? Do they want to eat it at breakfast? Do they want to have it as a snack? Do they want it right before they go to bed? It’s causing them to think about that and understanding how they can get the most out of these valued resources and to not take advantage of them moving forward.

So, again, it’s been a great experience and a good learning lesson if going into it, I felt like I want my kids to feel some of this and I’m glad that we’ve structured it and organized it the way we did. I feel that part went really well.

Another thing is we’ve started making homemade bread and rolls and making homemade tortillas and my kids have actually, really enjoyed it. Even our littles. The four and the six year old enjoy kneading the dough and being a part of the overall process. And it tastes good and everybody’s enjoyed the experience as well as having that to eat. So again, just back to the overall concept here, good lesson learned is don’t shelter our kids from… or deprive them of having this opportunity to feel scarcity and to feel a need to make some sacrifices. I believe that 20 years from now, 40 years from now, this experience will be something that my kids remember and they reference back to and I hope that it will also be a foundation for them as they gain their independence and financially they go out into the world, they’ll remember this and they’ll remember that it’s important to save and conserve and everything that goes with it.

So there it is, lessons learned from no pay for a month. Hope this has helped with some perspective on your side and I hope that you’re safe, you’re doing well, and you’re figuring out how to thrive even in difficult times.

And again, if you have any questions or want to throw anything my way, I’m happy to try to answer that and be a resource or help if I can. Many, many thanks to you for joining us today. This is a rap for episode 59. Happy day.

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About the Podcast

Join Chief Financial Officer Ken Kaufman as he helps you track and hack your net worth. For those seeking financial independence, your net worth is one of the most significant measurements of success. Using his two decades of financial experience, Ken Kaufman helps you overcome your financial obstacles and look onward towards a better, brighter financial future.


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