Erik, 33, and Lisa, 29, live in Andover, Minn., with their kids Alaina, 3, and Sadie, 1. Erik, a plumber, was laid off last month. Lisa works for an insurance company.
When they were both working, the Langsdorfs put 10% of their combined monthly income toward retirement and set aside 5% in a rainy-day fund.
When Erik lost his job last month, the couple stopped contributing to the 529 plans they had set up to help pay for their children's college education.
In addition to switching from brand-name groceries to generics, they have cut back other expenses, from baseball outings to car trips. Of the market, Lisa says, "It can't get much worse. There was a lot of greed out there."
WHAT THEY SHOULD DO:
Facing potential consolidation in the insurance industry, Lisa should plan for the possibility that she too could get laid off, says Chatzky. She should think about what skills she could draw on. "The best time to look for a job is when you already have one," Chatzky says.
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