As I was comparing different meat prices at the grocery store on Sunday, it got me thinking about how many people just can’t go to the store and buy everything they need to feed themselves and their families. That led me to thinking about what I would do if I truly couldn’t make ends meet, and being frugal wasn’t just an effort to save more, prepare for the future, and live simply, but was an everyday necessity.
#1 – Stop Spending
It’s pretty incredible how drastically many of us can cut our budgets if we really needed to. I could eat from the pantry, stop buying things, and find the cheapest food. Cable, expensive cell phone plans, and other luxuries would have to go. And that wouldn’t mean sitting at home all the time to avoid spending money – there are lots of free community events like the park, the beach, hiking, etc. – all which are completely free. Picnics could replace eating out, and I could dig out the ice cream maker to replace our favorite treat – going to the local frozen yogurt bar. (I should do this – my daughter would love it!)
Making a change in housing is a huge life change, but unless a financial rough spot is clearly short term I think it’s important not to wait too long before examining this option. Since I own my home possibilities would include talking to the mortgage lender about a loan modification or selling the house. If I owed more than the property is worth there’s HARP (at least until December 2013) – the Home Affordable Refinance Act, which allows homeowners to refinance even when “underwater.” If I was renting things would be even simpler, and a good option could be to look for a less expensive place. It could involve breaking a lease, but with the strong rental market my guess is many landlords and property management companies would be fairly understanding in the case of a true financial emergency.
Would I look for a second job? When I worked for a company with a lot of commissioned sales people I often saw people who were underperforming take on a second, generally low paying, job. It never ended well. Trying to fit in both jobs usually meant their sales were even lower at their primary job, and they were exhausted and even more stressed than before. I think I would instead focus all available energy into being successful in my current job (assuming I was employed) or on finding one position that would allow me to make ends meet.
This is a tough one – accept help. I could check to see whether there were any government assistance programs my family would qualify for. I know from talking to people in this situation that there is often help available even when you’re financial situation isn’t as dire as you might think it needs to be. There’s unemployment, food stamps, help paying for child care, health insurance, or medical treatment. There’s even job training, financial counseling, and language classes offered in many communities. Assistance can come from federal state, and local programs as well as non-profits. If anyone feels it hurts their pride to accept help I would suggest keeping track of the amount received and vowing to donate at least that amount to charity once back on his or her feet. Just don’t let your family suffer in the meantime.
I would hope that I would also ask for help from family and friends if I needed it. This doesn’t have to mean asking for money – it could be help watching the kids to go to a job interview (or grocery shop without “helpers”), ask for help repairing something in the house or car from a friend with expertise in that area to avoid the cost of a pro, etc.
How do you feel about this? Does this scenario seem like a nightmare or manageable? What would you do, or have you done, to weather a financial storm?