No one can be sure when the next economic downturn will strike. What is certain is that few people are prepared to meet economic emergencies. Lost jobs, foreclosed homes and disappearing bank accounts are more the reality in today’s world of uncertainty. Today’s harsh economic climate has many families struggling to survive on an income less than the average income level.
Gone are the lavish lifestyle when a family could afford a new car every 3 years. A single income life means a tightening of the economic belt with a close inspection on what can be saved rather than what can be spent.
If you’re among the majority who have little saved up for a rainy day, you’re headed for bankruptcy. The average American today has just enough savings to last two to three months. They must find a job quickly or face a reduced standard of living.
Surviving on the poverty level isn’t appealing, but it requires a close scrutiny on where money is needlessly spent. To survive you must record all your expenses to find the areas where you waste money the most.
No matter how big or small your salary may be, you have to pay for necessities. If you are a family man, chances are that your family owns upwards of 17 credit cards. That’s an invitation to a lot of needless spending. It takes decades just to pay off the minimum monthly payment on a single overdrawn credit card. That assumes no more expenses are placed on the card, a task that few people have the discipline to do. On a poverty level income, you need to destroy all but one or two of your cards.
A frugal shopper can shave 30% off the food bill by using coupons and searching for discounts. Few consider the cost of entertainment. Eating out on a regular basis is expensive to cooking at home. A family of five spends far more than just the price of a ticket once the candy, popcorn, soft drinks, taxes and gratuities are factored in.
Daily expenses of just $5. for coffee, donuts and the daily paper add up to $1250. every year, a considerable amount of money that could be better used to meet expenses. Despite personal economic hardship, thousands see no reason to buy beer and cigarettes when overdue bills are pending.
Obviously, we need clothing and shelter, but we don’t need a closet full of shoes and clothing we haven’t used in years. Keeping up with the latest fashion trend is not possible on a limited budget. Dry cleaning is more expensive than using a washer and ironing clothes. The single income earner can save as much as 50% buying used clothes and still make a fashion statement.
Today’s home is larger and more expensive than the modest dwellings of yesterday. It’s not that we need all that extra space unless we have a large family, but a big house today has become more of a liability for those who must contend with mortgages, taxes, insurance, repairs and maintenance costs. You can’t be the lord of your castle if you’re paying too much to live in it. Selling the house and buying a modest dwelling may help you stay solvent.
Government aid is available if you can’t make ends meet. You may qualify for food stamps and help for housing and heating during winter. This aid is meant to help you get financially solvent. It can help you find better employment or get a new education.
When done correctly, survival on the poverty level is possible, but requires a great deal of discipline. A good strategy and a family resolved on working toward a common goal can bring prosperity and eventually peace of mind that comes from having a solid financial footing.