Friday, September 7, 2018

How to handle financial distress with helpful tips.

Are you in financial distress and don't know where to turn?

Maybe I can offer some help.
I've been there and I've helped many people see the light at the end of financial fears. We also have six kids, three in college and five on their own. We are trying to assist them in being independent but also find that balance between helping and enabling. I've been on my own since I was seventeen and I was lucky enough to have been raised by depression era grandparents and other frugal family members who taught me well how to be resourceful.

Here are some tips.

Emergency Steps to Handle Financial Distress.
 Don't panic there is no debtor's prison. You can fix this.
* I am assuming if you are reading this you are not homeless but I need to say this if that is the case. If you are call the nearest homeless shelter or church and ask for guidance. Then apply for all the services you can and follow their advice. You will need to contact the Department of Human Services immediately. 

Let's say you have a place to live, you have to many bills, maybe you are behind and you don't have enough money coming in to pay everything. I'm talking to you.
1. The first thing you need to do is write down all your bills on paper the old fashioned way. Then write down the money you have coming in, not what you think it going to come in but what actually came in the past thirty days. That's your starting point. Go by what happened last month.
2. Pay your rent/mortgage first every month and your utilities. If you are behind call and make arrangements immediately (This will save you fee's and maybe eviction). If you need to find a cheaper place to live do that as soon as you can. Ask people you know as well. You never know what people might be willing to do if you ask. They could have a garage apartment or a room. They may even come down on their asking price.
3. Hussel up a some money, after rent, utilities and food are paid then you need an emergency fund. Why? Because something will always happen to throw you in distress if you do not. You have to have money for emergencies when you are living that tight. Sell some stuff, take an extra job, call people you know and ask them if there is anything you can do for them and tell them your situation. You might be surprised how many older folks need chores done, shopping, or help with electronics.
Quit being afraid to ask! All they can do is say "No'. Be on time and do more than you are ask. Always give your best.
4. Stop all discretionary spending. If it isn't shelter, food, utilities and basic transportation stop spending on it for now.
5. That means meal plan. The average person can eat healthy on about $6.00 a day. I'll share below. The average person with no money is eating fast food every day to the tune of about two to three times that. If you spend $6.00 a day eating at home versus $18.00 a day eating out you will save about $360 a month! I'm serious!
6. Stop smoking, don't buy alcohol and stop all frivolous spending. This means clothes, makeup you don't need and hair products etc. This area alone is the problem for most people.
7. You need to find cheap or free entertainment.
8. Cut off the cable even if they tell you they will charge can pay it out.
9. In extreme cases cut off the Internet. You can use your phone. People not to long ago, my generation did not have cable (until I was a teen), wifi, or cell phones. I can see having basic cell service. What to do if you have no wifi or cable? You can get books and DVDs at the library (we did this for years), read, clean your house, cook your own food, garden, learn a new hobby, take care of your car and what you have. Spend your time exercising. You might actually be happier. If you need wifi go the library. If you need it for your work like me I understand this and you should write it off your taxes.

Most people these days can make $10 an hour for basic labor. You may have to find a cheaper way to live, rent a room, take on a house mate, do the tiny house thing, get a trailer....

Basic Budget for a single person making $10 an hour, working 40 hours a week. If you are broke and working less you need to find another job or an extra job. Maybe at night or weekends. * I was $1400 a month over my head about two decades ago (meaning that is what I was short to live on. I took an extra job and moved into a much cheaper house).

$400 x 4.3 (average month) = $1720 before taxes (this is high for this pay grade but average) after $1290.

Your health insurance should be about $20 a month at this pay rate.

  • Rent about 1/4th your income no more than $330. *This may be hard, the average may be more like $425 for a small studio. Figure out a cheaper way, be creative.  
  • Utilities: electric, heat, water no more than $75 
  • Auto Insurance on an old car (liability) $30.
  • Basic cell phone service $55.
  • Total = $480
  • Balance is +$810
  • Food $75 a week x 4.3 = $322.50
  • Gas $40 a week x4.3 =$172 
  • Balance = $315.50 (save emergency fund first, then pay on debt. If you have no debt then you can save up 3 to 6 month living expenses, then pay off a mortgage if you have one. For now follow the steps in order. Don't pay your bills late. Sit down every pay period and pay bills due first and set aside money first before it is spent. DON'T GO SHOPPING.You will not buy clothes for now. 

*You should not have a car payment, if you do consider selling it and buying a used cheaper car with your tax return. If you are upside down start working on plan. If you can take public transportation.
Everything below that line should be put in the order of most important. Call all your creditors and work out a plan, even if it's $10 a month. If you have a lot of debt you will need to get another job. I suggest a Dave Ramsey Financial Peace Course. You can read the book for free if you are to broke to afford the course.

*If you need new skills you can often get Pell Grant money and Scholarship money. At a local technical college or community college that may leave you some money to live on and work part time. They also have night programs that are only a few nights a week. Getting skills of some kind will greatly increase your pay and most likely the quality of your life. This is what I did.

Read more of my blog for tips.

Meal planning.

Last week I went shopping for a weeks worth of meals for two people for $85.00
This was a test for myself to see if I could do it.
Most of the food was organic and very high quality. I looked and figured that I could have purchased non organic cheaper products for about 25 to 30 % less. When I added up the cost of the meals it came to about $2.02 a meal for breakfast and lunch and dinners where closer to $3.00 a person. The total for organic meals was about $7.04 a day per person.

Before you meal plan look at what you have and plan around that. Do you have a jar of spaghetti sauce? Guess your eating pasta. Do you have some bacon? BLT's anyone? Do you have a loaf of bread? French toast or sandwiches. Use up what is going to go bad first. If you have some veggies or fruit that need to be eaten plan your meal around those. This will save tons of money and waste.

This week I took my son out to eat for lunch at a local restaurant and it was $65 with tip! I about died. I don't have to be on a budget anymore and was treating my son, but my point is that would be one weeks worth of groceries for one person if you meal plan. 

Here is what we had this week, I modified a bit for my low carb diet.  You will have to food prep on this diet (Food Prep is fancy talk for store your left overs for the next meal). Dinner for two for seven days.
1.A deli chicken with 2 veggies (frozen veg): Made 4 meals
2. Enough left over to make two meals of chicken salad (2 meals) with crackers.
3. Taco Salad (3 meals)
4. Broccoli Soup and Crackers (4 meals)
5. Spaghetti with Turkey (ground) and green beans (frozen) (6 meals)
Total full meals 19 meals (Need 14 dinners for two people, then 5 days of lunch one person can take leftovers)

Lunch: Leftovers
or Peanut Butter and Banana Sandwich and milk
or Egg Sandwich with a few slices of tomato and milk and a banana

*There was enough left over salad fixings and veggies to add a salad to a couple of meals or another side veggie.

Eggs and Toast
Overnight Oats (Organic Yogurt mixed with fruit and topped with nuts)
Oatmeal with nuts, peanut butter, butter, a half of banana and glass of milk.
* I had some berries, the only fruit I purchased was banana's because they are cheap. Look for what is seasonal.

You can do this! Don't get discouraged get empowered. :) I did it, got ahead, screwed up and did it again. This time for good.