After writing yesterday’s dismal blog post and spending a blur of a night at work miserable (mostly due to my entire lack of voice and making very little money), I was feeling a bit like this:
But yesterday some help arrived in the form of advice (both from you all in the comments and from a cousin who is a financial planner) and a loan. So we should be able to reach the surface this week and stop feeling like we are drowning. My cousin is lending us what we need, and without sharing too many details, we basically don’t have to pay it back — it will be repaid in the future by something else.
His condition is that we go through our finances with him in total, and I think I’m more grateful for his advice than the money. We needed help figuring out where we’re bleeding money and where we are holding ourselves back. We also needed a professional to give us some tough love. My cousin was able to pinpoint several of those areas in just one email.
I’ve always been a planner, and there is a chance (I’m not admitting anything) that I am a closet control freak. Maybe not a control freak, but I hate feeling like I’m surviving at the whims of others like I hate the smell of artichokes. And I reeeeally hate the smell of artichokes. Makes me urp.
So here’s what I’m going to do in the next month to get us from “back on track” to “moving forward:”
1. Pick up shifts. Lots of shifts.
We need to greet the New Year with more than a squeak. We need to greet the New Year with rent on the first and all our bills on time with room to spare. Ambitious? Yeah. But picking up at least a shift a week will help with it. I’ve already picked up one for this week. I’m going to try for another.
2. No Christmas presents under the tree.
None. We can’t afford it, and the holidays will come back around in a year. With a little luck and a lot of hard work, we can make up for it next year. The biggest gift we can give ourselves this year is peace of mind. We’ll spend our day off on the 25th celebrating our marriage with a good meal and honouring our commitment to building a better life for ourselves.
Plus, if the world ends on the 21st, all that money spent on presents would be wasted anyway.
3. Second jobs.
Neither of us work 40 hours a week right now because we just don’t get the hours, and because Spouse’s music school job cut his hours, it means the steady income in our household has been halved. We both need to pick up something on the side.
For me, it means trying to get my foot in the door at Cracked, pitching articles and hoping they pick a couple of them up. If I can find something else a couple days a week, I’ll do that too. Anything for a boost in income to get our debt paid down and our bills ahead of the game. For Spouse, it will probably mean getting something else a couple days a week and consolidating his lessons so they’re not spread out over 7 days and getting more clients. It’s not going to be easy. But the hard fact is that if we were both working 40 hours a week, we would be more than fine.
4. Plan for a relocation.
We know we won’t be able to buy a house here, probably ever if we’re honest. The job market may be marginally better in Maryland/DC than in other places, but the cost of living is so much higher that we could take a significant pay cut elsewhere and still have more of a buffer of income. For instance, salaries in Buffalo are 12% lower than here, but the cost of living is a whopping 37% lower there than here. That’s a difference of 25%.
I’m going to start looking for Jobs (capitalised for a reason, meaning not serving tables jobs) in the summer and see what I find. The sad truth is that if I can find a decent paying job in a city like Buffalo, it would be as much as Spouse and I make now combined, with more purchasing power.
So it’s Monday. It’s a new day. I didn’t wake up with a new lease on life, per say, but I woke up with a little less of a rained on feeling. And my voice has returned from wherever it slunk off to on Thursday. Something about literally being unable to speak doesn’t help feelings of helplessness.
Thank you to everyone who left me comments yesterday and your well-wishes. We will figure it out. I’ll keep trying to get published. I’ll bounce back. I always do.
I just needed a little tough love.
Living beneath your means in a world that would rather you bankrupt yourself to keep up with the Joneses can be difficult at best.
And it might be strange to think that I’m about to write a post of financial advice when my rent is eight days late and likely won’t be paid until Friday — but rest assured everything I say is very much directed right back at me and my own family. I’m going to do my best starting now to follow it.
I’ve heard the advice before: live beneath your means.
It seems like a nebulous sort of bit of advice. What does that really mean, anyway? I’ve spent a while trying to come up with something to describe it, and this is what resulted: spend your money so that there’s something left at the end of each month.
This is where it gets tricky. And it’s where people get somewhat prickly. Because we want nice things. We want a nice home and a nice, reliable car. We want a flatscreen and an Xbox and to Buy Things. We want to eat out and go to movies and buy our spouses and children presents Just Because.
We feel we deserve it. I feel I deserve it, and you probably do too.
The problem is, we often Can’t Afford It.
Those three little words are almost dirty ones. You know what I mean — saying them makes a bitter taste in your mouth sometimes.
I grew up very, very poor. I grew up with those words as a constant litany. And yet in spite of that, we always stretched beyond our means. It’s a rather harsh truth, but I never learned how to save. The only lesson I’ve ingrained into my being about saving is that when you save money for something, catastrophe strikes and then it’s gone. So why bother?
I didn’t realize how poor we were until I went to college. I bought my own car with my meager college savings and the promised graduation check from my grandma that I had planned to use to buy a computer. Most of my classmates at my private university had parents who paid for their cars, their tuition, and their spending money. That’s when I first felt the bitterness of having to tell my peers I couldn’t afford things.
When they asked me to join them for dinner. For skiing and snowboarding. For camping. For Spring Break trips. For movies. I had to work my way through college, and even with all the grants and loans and scholarships, I found myself broke sophomore year with expulsion looming due to my finances. If it weren’t for the extreme generosity of two of my friends and the fact that I crocheted my fingers off all autumn selling beanies and scarves, I wouldn’t be sitting here right now typing this. I don’t know what I’d be doing, or where I’d be doing it.
I’ve never learned to live within my means, let alone beneath it.
I thought I was getting back on my feet this year. Yet here I sit, twenty-seven years old, with a balance of a couple thousand dollars hanging over my head for this month. Including $1100 we owe the IRS. It’s humbling. And terrifying. It’s somewhere I never wanted to be again.
So I know that there’s something I have to do differently if I want my children to have a different childhood than I did. If I want my family to succeed and not be torn apart by the crushing weights of poverty and debt.
Oh, I’ve budgeted before — sort of. I’ll get as far as lining out my finances for the month, what bills are due and when, and then that’s it. It disappears into the depths of its spiral bound notebook (of which I have several), and if you were to page through my notebooks, you’d find probably a page or two in each written in panic as I crunch numbers.
A budget is more than knowing when your bills are due and how much they’re for. A budget is a plan for paying them on time. A budget is how you know how much money you have, how much you need, and where it’s going.
Right now, according to our calculations, my husband and I make about $4000 a month. Our bills total about $3400. So where does the rest go? If I have no idea, you probably don’t know either. Either we’re not making what we think we are, or we are spending very poorly. It’s probably both.
My income fluctuates. I once made $1100 in a week. This week so far I’ve made $200 with one shift to go. That’s part of the reason we are le screwed — we haven’t learned that we never have “extra.” We have great weeks and crappy weeks, and we’ve not yet learned to balance them out with good planning. Even with steady income, this can happen due to unexpected expenses and purchases.
I messed this up too. Some of it was due to necessity, of a surety. Some of it…not so much. The result is that I have a net worth hovering around -$70,000 between my school loans, my car loan, and my credit card debt. Somewhere along the line, many of us have been tricked into assuming that buying things on credit should be the norm.
You need credit to buy big things, like cars and houses and yachts and mail-order brides. But for most things? Pay cash.
“But I don’t have the cash,” you say.
You don’t have the cash because you spent it all. Granted, sometimes it’s spent on such trivial frivolous things as food and rent, but sometimes it’s because going out to eat three times last week sounded more amusing than beating up potatoes with a masher at home.
“But I want it!”
Oh, me too. I know. I get it. But if you want it, you should pay cash for it.
There is a way to pay cash for things. There is.
How do you save if you’re broke? How do you…*swallows bile*…wait for ten months or more to get that house or laptop or new flatscreen or minibreak to New York City to see Alan Rickman on Broadway? ALAN RICKMAN WILL LEAVE BROADWAY BY THEN!
First of all, if you are broke to the point of having no money left over after necessities are paid, you probably need a lifestyle downgrade. If your rent is too high, you might need to suck it up and move somewhere you can better afford. This goes for the people who bought McMansions and Lexuses they couldn’t afford as well as those of us at the shallow end of the income pool.
Somehow, we Americans (and increasingly, Europeans and Australians…aw, hell. Everybody.) got it into our heads that we need to always have more. That we need to upgrade our living situation, our functional vehicles, our wardrobes. So we push at the bounds of our income, hoping that we’ll “get by.”
I’m not getting by. Are you getting by?
If there’s anything I’ve learned, it’s that savings has a purpose. It might take twice as long to do things this way, but I’m embarking on an experiment. I’m going to start two savings piles.
1. Squirrel Fund: Squirrels stockpile food and necessities to get by in the slim months. That way when the days of plenty run out, they still have some acorns in their hole to get by when they’re feeling hungry. This is the fund for emergencies — that unexpected car repair, that vet bill, that plane ticket to see an ailing relative. This fund does not get touched except in the case of an emergency.
2. The Treasure Chest: This is where you save for the things you want. This is the money that will buy your new flatscreen, your trip to Europe, your cruise, that rare record you want. It’s also insurance — because in the event that an emergency dwarfs even your Squirrel Fund, you’ll have something more put aside.
It doesn’t have to start with a lot, but it does require discipline, self-denial, and delayed gratification — incidentally, the antithesis of modern culture.
I’ll get back to you on whether I have what it takes to get back on my feet.
What tips do you have for living beneath your means? How have you changed your finances to ensure success?
- Budgeting in the Real World (sweetbriarcareerservices.wordpress.com)
- How to be rich: our 10-point guide (confused.com)
- Money Advice Trust’s 10 tips for dealing with debt (blogs.confused.com)
- Budgeting Money (pro2sell.com)
- ‘Demand’ For Generic Financial Advice (ngap.net)