Down but Not Out: Overcoming Job Loss

Rick Rose did just about everything right with his finances.

He worked hard. He saved well from the $85,000-a-year job he had as communications director for a nonprofit in Washington. He bought a home he could easily afford. In fact, he had saved about a year's worth of living expenses.

But in two months, Rose, 43, could be out of money. He lost his job last spring and has been living off his unemployment and savings ever since.

By contrast, Juan and Bobbie Wilson made many mistakes. When the couple earned $98,000 a year, they admittedly spent too much. They weren't extravagant, but they did what many families do. They ate out too much. They overspent using credit. They didn't budget.

Come May, both Rose and the Wilsons will be in the same position: They will barely have enough money to make their mortgage payments. Rose will also worry about coming up with the money to pay for the expensive medication he takes for HIV. The Wilsons will be wondering whether they can pay for health insurance for their family.

The fact that Rose and the Wilsons are faced with the same financial issues illustrates how cruel this recession has been and how none of us can arrogantly think we're better off than our down-and-out neighbor or friend or family member or former co-worker.

Even though the Wilsons could have handled their money much better, they weren't reckless. They just didn't plan for the worst.

Rose did plan for the worst, and it just became catastrophic.

"I thought I was being very careful," he said. "My house isn't extravagant. I don't have huge expenses. I have an unexceptional wardrobe. I don't vacation much. I cut back on eating out."

If you had a sustained period of unemployment, how long could you last financially? Would you take any job, even one that paid significantly less than you were used to making? Is your job crucial for your health care?

Over the next nine months, I'll be sharing the struggles of Rose and the Wilsons as they look for new and sustainable work. They are the faces of a recession that has taken families down all over this country.

In past challenges, I've spent a year helping individuals and families get their money straight. For the most part, it's been an easy task. It's something I've done with dozens of others. The advice is generally the same: I first make them do a budget. They have to get rid of their credit cards and face up to their spendthrift ways. For this year's Color of Money Challenge, I decided to specifically focus on people and families affected by job loss. The theme for the challenge this year is "down but not out."