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Consciously Frugal: What to Do When It Gets Scary
For some, the economic doom and gloom is just noise on the television and radio. For others, it's a reality.
For some, the economic doom and gloom is just noise on the television and radio. For others, it's a reality. Layoffs, home losses, and other nightmares have come out in the light to torment too many. Some were well prepared, so they are weathering the storm with emergency savings and new jobs. Others, particularly those who lived paycheck to paycheck and were swimming in debt, aren't doing so well. I've been there too, once upon a gloomy moon. Let me share a few things I learned about how to weather the storm when it gets scary.
If you've been laid off, venture over to BluntMoney.com and look at her advice for the newly pink slipped. Follow it. It's good stuff.
Second, take a look at GovBenefits.Gov and see if you qualify for any programs. There are certain parameters you will have to meet. This is not a time to let pride get in the way (pride is for people who should know better). Food stamps, (or whatever they call them now)utility assistance, etc. can be a lifesaver in scary times. Also check your state website to see if there are regional assistance programs available.
Third, go over your budget (you do have a budget/spending plan, yes?) and eliminate (or reduce if you can't cut it out completely--think cell phones, heroin, whatever you feel you need) the non-essentials. Don't panic. You don't have to give up cable and weed indefinitely. This is a temporary situation requiring temporary changes, although you may find you actually like life a little more without 300 channels of nothing to watch.
Finally, sell stuff (BluntMoney.com mentions this, and it's good enough to repeat). Craigslist, garage sales, and ebay are great places to generate cash. You really didn't want that neon beer sign anyway, did you?
This is one area where it's easier to spend less and still live well. If you qualify for government sponsored programs like food stamps or WIC, for the love of all that is holy, get on the program. If you don't have ninja shopping skills like using a price book and buying items in bulk on sale, look to see if you have a local S.H.A.R.E, (Self-Help and Resource Exchange) Food Sense or Angel Food Ministries program. These programs offer quality groceries at a significantly reduced price. Don't forget your local food bank as well if you don't have funds for the programs listed.
For fresh foods, I've found that farmer's markets are almost always cheaper than traditional grocery stores, particularly in lower-income neighborhoods. It's important not to go into a panic and subsist solely on hot dogs and ketchup, because you're likely under a lot of stress and need to take good care of yourself. Yes, I am your mother.
Speaking of Health...Insurance
BluntMoney.com addressed COBRA in her advice about surviving a layoff, but there are other options if you find yourself without proper coverage. Check out this previous bit I wrote in response to a question about health care coverage. At the very least, you should find a way to have catastrophic coverage and if you have children, get them covered under a state-sponsored program. This is where giving up cable and heroin come in handy, if only for the cash.
Chances are, if you're mired in debt and were living paycheck to paycheck, you don't have any savings. Yes, I'm going to quote myself again. Check out a previous sermon about how to save and/or raise more money (originally written to help you avoid PayDay Loan Sharks. For the love of all that is holy, stay away from those bastards).
You may even qualify for an IDA program, which provides matching savings for low-income families. I know it seems counterintiutive to try to save when you're living on the brink, but savings is the only way off the ledge. Making small changes, like cutting out non-essentials, eating oatmeal instead of sugary cereals, eating meatless meals, etc., can help you save small amounts. But with an IDA match, that $5 monthly savings will turn into $10, $15 or even $20.
It's important to remember that it's the little, day-to-day expenses that nickle and dime us to death. We rarely have the opportunity to save huge amounts of money, but if we're smart about our little spending, we can save solid amounts over time. I'm sorry to admit that it does take time. Just like you can't get ripped from one trip to the gym, it takes discipline in the mundane and time to build a savings. (Sorry, I know it's boring, but if I were to tell you could get rich in 30 days without lifting a finger, you'd surely know I was full of it, yes?)
Obama recently initiated new plans to help homeowners stay in their homes. If you're facing foreclosure, talk with your lender to see if you qualify for these programs or check out the GovBenefits.gov site.
Consider alternative housing options as well, particularly if you are a renter. Can you move in with family? Live in cooperative housing? Rent a room instead of an entire apartment? Move in a renter if you own your home? Before you panic, remember the mantra: This is a temporary situation requiring temporary solutions.
So, you've cut out non-essentials and cut back on pretty much everything else. But wouldn't you know, the coffee pot broke this morning and Mother Mary, you are NOT boiling grounds on the stove or any other such nonsense.
Fear not! It's possible to get all kinds of goodies on the cheap. Before you run to the mall for any item, see if you can repair what is broken, borrow from a friend, or use something else to replace it (are you sure you can't stand to boil grounds on the stove?). If not, hit your local thrift store. If there's one thing we blessed Americans are good at, it's throwing out perfectly useful items. Let someone else's excess be your bounty of cheap goodness.
There are also several groups and websites that offer free books. You can also join your local FreeCycle and get and give pretty much everything under the sun.
The difference between the mall and thrift shops and such? You'll need patience. Instant gratification is hard to come by outside of the mall, but don't worry. You'll survive the transition.
For services or other items that might not be found at a thrift shop, investigate via the web, churches and community groups to see if your area offers any formal bartering systems. There are some international barter organizations, like Time Bank, that provide equal "pay" for all services rendered. It doesn't matter if you're a plumber, a weaver or an attorney. An hour is an hour.
Organizations like Time Bank provide alternative currency systems that not only help out communities, but can help stabilize economies. During Switzerland's last economic upheaval, a small group of businesses banned together to offer business to business barter transactions. The network grew to more than 62,000 businesses, has its own bank, and the business model has spread as far as Brazil. Many economists, namely Bernard Lietaer, attribute such alternative currencies with the salvation of entire economies.
The Stuff that Really Matters
Things are scary. So scary, in fact, that people are committing suicide. That's madness. Money does not define you, capiche? There are programs in place to help you. Use them. Take comfort in family and friends and if you need to write out gratitude lists to remind yourself of the many blessings you have, by all means, go full on Oprah. Perspective is key, and there's no use going insane over a temporary circumstance. (It's all temporary, remember?) This will pass. You will survive. Life sometimes gets bumpy, but there is a light at the end of the tunnel. (Insert your favorite cliche here.) Now is the perfect time to become more involved in our communities so that we can all help each other out.
Although the jury is still out on whether this fiasco is going to turn into a full-on economic depression, it wouldn't hurt to take up the old depression-era mantra: Use it up, wear it out, make it do, or do without.
Read more tips and topics that address living frugally in a socially conscious manner, respecting community, the environment and our global human family at: