If you’re living on the margin, or may be soon, the amount of income you have may be a fixed number you just have to deal with. It also might be an income much lower than you’re used to if you’re one of the newly unemployed. In this, the fourth installment of the “On the Margin” series, I’ll tell you what I’ve learned when it comes to living without a lot of money. If you have ideas of your own, please share them in the comments.
Like every other aspect of life on the margin, the key is knowing your priorities. When your income changes suddenly, a few things you took for granted in life are just going to have to go away. You may have to sell your home or your car or stop taking a much loved vacation. Whatever it is that you give up, do it knowing that you’re OK with it. Understand just what you want to keep in your life and those choices become easier when they come. Here are some ways to make it easier to keep what you want and need.
Sharing and Paring
If you’re willing to share your life with someone, you can save a lot of money. If it’s a roommate, you can draw up a contract and start off with something nice and legal. Any boarders you take in you have to trust, but the relationship is straightforward.
The other way you can share your life and cut down expenses is by moving in with your family or making a commitment to have a partner in your life. This is a lot harder, but ultimately much more rewarding. The first problem you’ll run into is that this is probably the worst time to take a relationship to a new level, since financial stress is the biggest reason why couples fail. If this approach is going to work, you have to be remarkably honest with each other and yourselves. Your roles and contributions will have to be spelled out clearly and the priorities agreed to as a couple. This is where you find out what love really is and how important it is to keeping your spirits up and faith in yourself running. There’s a lot more to be said on this topic, and I intend to revisit it later.
Cars are another big drain of money, with the average one costing $7,834 or about $0.50 per mile. If you can live without one or share one with your partner, that savings is yours. Public transportation isn’t an option everywhere, so if you don’t live in a city where you can walk and ride transit everywhere you really need to think about it. If you can’t live completely without one, and going to the grocery store is the one time that a car is very handy, get to know what a taxi costs or how you might rent a neighbor’s car. Creativity is your friend when it comes to getting around, so know all the many options.
Food is another place where there are savings in numbers. If you have a co-op of friends and neighbors that pitch in for food, you can buy in bulk. Things like lentils (or other beans) can be made into wonderful delicacies for $0.50 a serving if you take the time to do it right. Learn where the cheap grocery stores are in town and what their limitations are. Get to know the Farmer’s Market, which offers better produce for less money than any store – especially if you can buy a lot at a time. This is another topic that deserves a post all its own, or possibly even its own cookbook (working title: Soup Line Delicacies).
The Dark Side
No matter what you do to keep your expenses in line, you’ll be tight once in a while. That’s where a partner in life can really help out, especially with unforeseen expenses you really can’t meet on your own. However, you may still have to string out bills and destroy your credit rating just to survive at times. As useful as a decent credit rating is, remember that until you have your head above water the only thing you can do with good credit is borrow a lot more trouble. Survival has to come first. Knowing your priorities means that when things get bad, you know which bill you pay first and which one you might just let go a bit.
Banks have their own cycles and ways of doing things, so you should get to know how your bank goes about its usual routine. It is illegal to kite checks, which is writing a check knowing that the bank won’t process it for 3 days and you’ll have the money by then. I can’t tell you to do something illegal, so I won’t even talk about this as an option for you. What is legal is making use of any overdraft protection your bank has, which is often nearly unlimited on debit cards. This will cost you, and you must always know the cost before you do it, but if a $20 charge keeps the lights on you might just have to do it.
Collections and creditors are an interesting bunch. The first thing you have to understand is that they are, actually, there to help. If you run off on them they get nothing, so telling them before you miss a payment keeps them in the loop to get at least something. Always offer them what you can, and give them a date when you can pay it all off. If you’re late and they tack on a fee, say something like, “Well, I was going to pay this off today, but with the $30 fee I can’t. Sorry.” I’ve always gotten late fees waived by being a hard-ass; they don’t want a deadbeat on their books right now with everyone looking at ‘em.
Living on the margin is a new world that many people are going to find themselves in soon. Those of us who have learned to live this way have a lot of things we can talk about, but the world we live in has made it embarrassing to admit that we have these skills. I’m a survivor, and I’m proud of it. There’s always more to say, and I hope you’ll do that in the comments.