3 Tips to Help You Get By When You’re Broke
Most people experience financial ups and downs. Medical bills, job losses, unexpected home repairs, expenses related to children’s needs, school expenses, and a variety of other costs can come up unexpectedly, requiring quick adjustments to a budget. Sometimes, we’re able to move a few things around or access emergency savings and make it work, and other times, these events place us in dire straights.
If you’re going through hard financial times, here are a few tips to help you get through.
Find out how much money you need for the bare essentials
It’s expensive to make a living and many people barely earn enough money to cover their basic needs, let alone earn enough to save for a rainy day. Last year, PBS Newshour interviewed Dr. Diana Pearce, founder and director of the Center for Women’s Welfare at the University of Washington School of Social Work, and creator of the Self-Sufficiency Standard.
The Self-Sufficiency Standard basically answers the question: How much money does a person need to earn survive independently of any assistance programs if they purchase only the basic essentials (housing, food, medical care, etc.) and nothing extra? The standard accounts for taxes, medical insurance co-pays, and food. But it does not include a single dollar in the budget for things like entertainment or food away from the home, not even a single cup of coffee at Starbucks. So how much money would you need to simply survive? Of course, this varies by location, but using the map on Selfsufficiencystandard.org, you can find this information for different areas across the country.
For instance, if you live in San Diego, California, you’d need $13.09 per hour (as a single adult) to survive, buying only the bare necessities. If you have an infant child, that amount raises up to $27.83. Other areas of the country may require a higher or lower amount. Knowing this self-sufficiency amount for your area will give you an idea of the cost of your bare necessities.
When you’re broke, going back to the basics is the best way to go. But it’s also an adjustment. It helps to create a list of “can go” expenses. These are expenses you can live without for the short term, like subscriptions, cable, eating out at restaurants, and even a second telephone line.
Stay put and stay cheap
Going out and about costs money. Transportation, parking, admission, and other fees are associated with most entertainment activities. So, when you don’t have a lot of money to work with, you’ll save by staying in. Instead of going out to the movies, invite a few friends over to watch a classic DVD you already own or stay in for a night of games or playing cards.
When you’re in a financial crisis situation, you can also save by making adjustments to your grocery list. Of course, you have to eat, but lean towards options like casseroles, meatless dishes, and other inexpensive options.
Know what you can change and adjust
When you’re broke, it’s important to have realistic expectations. This includes being honest with yourself about how much extra income you can bring in from overtime, a potential side job, or other sources. If you’re planning on reducing your expenses, there’s only a certain amount by which you can realistically expect to lower your bills over the next month. Certain costs are fixed over the short term, like your rent or mortgage and insurance. It’s a good idea to go through your budget and get an idea of exactly which expenses you can eliminate right now and which you cannot.
It’s also prudent to make a long term plan, as well. If you’re in dire financial straights, it may be time to consider downsizing or a different living arrangement.