Tuesday my One Thing was this (click here to get One Thing sent to your email for free, each workday):
Today! Figure out how much money you have (bank accounts, under
mattresses, etc.), and how long it will last you (what are your expenses).
When I got laid off I sat down with my wife and someone else and wrote
out our budget, and figured out how many months we could survive. We
were fortunate to get help from our church and our families, and I
know this is is the exception not the rule. How long can you last, if
your income stops today?
… and I got the following question from R.B.:
Great advice. I have yet to see, however, advice about what to do after you’ve already done this planning, and you have gone through all of your savings, etc., yet still do not have money coming in. What then? That’s where I am right now.
Before I give my ideas, let me just say, it’s really, really, really easy for this to happen to YOU. Think you won’t be in a job search long? Think you have enough savings to last, or your employer will give you a cushy severance? THINK AGAIN. I see this happening all around me, even in my safe little town with pretty houses and smiling people.
I wish I had all the right answers for you, R.B., but I’m just going to share what I know, and hope my readers can chime in with their own experiences and solutions. The order is important:
First, eliminate. After we made our budget, the “someone else” was looking at each line item to see what we could trim or eliminate. We were already living pretty lean, so there wasn’t anything we figured to trim. HOWEVER, we definitely could have trimmed our grocery expenses (going to the beans/rice diet). Trent Hamm is an expert at trimming personal expenses, and blogs at The Simple Dollar. Go read his blog and see how he trims corners everywhere. It’s become a challenging game to him, and reading his ideas is almost invigorating. If you have cable, satellite, other other non-essential things, figure out how to get rid of them.
Second, family. It is very hard, embarrassing and humbling to go to family for help, and some of you just can’t. But when you are in a serious hardship, a family can pull together… immediate and extended. Sometimes all you need is an extra $50, or $200, or more for a few months. You may be surprised at how willingly your family, including aunts and uncles and cousins and beyond, will jump in and help you. I hear about this all the time… and you’ll have your turn to help them (or their kids). I’m always surprised when I hear about families helping, simply because I used to be selfish and tight with my money, and judged the person in need.
Third, government. Call up the state welfare office and make an appointment to see what help they can offer. Examples of financial help can include unemployment insurance payments ($1k/month is not much, but if it’s the only $1k/month you get, it can be a lifesaver!), food stamps, utility help, etc. Another thing, and this helps give you peace of mind, is getting the appropriate health insurance for you and/or any dependents. I hated collecting unemployment, and felt like the state employees were very scrutinizing and judgmental, and thought we were scamming them, but hey, I had kids to feed.
Third-and-a-half, your 401k. My wife and I didn’t qualify for medical coverage because we had over $5k in assets, which includes our 401k. Only politicians could come up with some lame idea like that. On the one hand we’re supposed to build a 401k so we don’t depend on the government in our old age… on the other hand, if we have over $5k then we don’t get any emergency medical coverage. Scary stuff. Hopefully you have been putting money into a 401k. I was cautioned to NOT draw from the 401k, because of the 10% penalty (if you take out $1,000, you HAVE TO pay $100 in taxes, no matter what). But if that’s all you got, you got to do it.
Fourth, your church. Obviously this doesn’t apply to everyone, as some don’t go to or have a church. But if you have a church, or can bring yourself to walk in the church doors and talk to a leader, you might get some help. I’ve blogged about religion’s role in a job search before. Aside from any help you might get from church leadership (which might be help with food, or paying bills, etc.), you might find congregation members rally around you to help you in this time of need.
Fifth, friends. Just letting certain friends know your situation can help. We had friends who started giving us food, inviting us to eat with them, etc. Your friends should care about you, and want to help you. You don’t want to mooch, and they don’t want to be taken advantage of. Be gracious, but be honest with yourself and with them.
That’s all I got… any other ideas on how to survive with zero income?