Most of us have experienced hitting rock bottom financially, even rich and successful people have been there at some point in their lives. The secret to gracefully rebound from zero balance pit is sensible and skilful prioritizing. The good news is it’s no rocket science – as you will find out. Discover how you can manage with as little as $300 for 30 long days!
Picture this. You’re in a single-income family with two kids and renting (or paying mortgage). A budget vulture struck – hospitalization, urgent debt repayment or reduced work hours, those stuff that sucks the life out of your financial security. Nobody will lend to you. Your next paycheck should be able to see you through but it’s not stabilizing in another month. You’re down to your last $300 dollars and the next 30 days await you with a queue of bills to pay and purchases to make. What to do? Keep calm and carry on.
The vast wisdom from financial rebound success stories and some attention to cost-of-living information from official references enabled us to come up with a no-nonsense A-list of priority payables and purchases, in ranked order. Our aim is for those in rock-bottom situations to understand the consequences of their choices and stand by them, until the cruel month is over.
The average cost of food per month in the US for a family of four would vary. The USDA even has a detailed allocation for plans dubbed Thrifty, Low-cost, Moderate and Liberal for various age, gender and family size. But forget all about that for now. Focus on that crucial 30 days and remember that food need not be expensive (even reasonably priced) to be nutritious. In other words, you can go cheap, yet still nourishing for only $150 for 30 days, or $5 for each day. There are so many available resources and guides on how to accomplish this. You’ll be amazed at how some people actually turned super saver food budgets into great meals for many, many days.
The $5 A Day Challenge: Grocery List.
The must-buys: bread, beverage (milk for the kids, instant coffee, sugar) and some meat. Include veggies and fruits in season which are dirt-cheap. Even fresh chicken (great for both kids and adults) come for as low as $0.88 per pound. With a $75 two-week budget spent in a low-priced supermarket, it’s possible you can even save a few dollars left after four weeks.
The experts have said it all. Bulk buying, coupons, store promotions, generic brands, extenders. If you are on a diet, are a vegetarian or cutting back on caffeine or sugar, it’s much better. Cook one-dish meals like hearty soups. Quality-wise, these should not make any big difference to your nourishment.
One brilliant insight: Having kids to feed is never an extra burden in food budgeting. Children usually feel full quickly even with small portions. Unconsumed kiddie food can extend to adult meals. Here’s one tip. Some parents usually feed kids earlier, and find themselves with enough untouched portions to use in whipping up a new batch of adult meals. Simply throw in cheap greens such as lettuce or cabbage into their leftover chicken nuggets or fried pieces, drizzle with homemade garlic-olive-oil-vinegar dressing and you’ve got a casual dining favorite to enjoy with nary a dollar cost.
It is also worthwhile to mention that knowing that you can still enjoy warm, delicious meals during your rock-bottom days can really make a positive difference in your views about your situation.
Now that we’ve got $150 in the outgoing tray, let’s allocate spending for its better half…
The Twin Bill of Utilities (in interchangeable ranks)
Payments for gas and electricity and water can never be ignored for obvious reasons, especially if there are children. You cannot take the risk of waking up in the dark, cold and dirt. Utility companies have strict rules and timelines when it comes to payments. If you seriously think you will face their wire cutters because of lack of funds, you can always talk to them personally for a payment rearrangement. But chances are there are procedures and you will pay for penalties, so better clear this off while you can still juggle it.
Rate calculation varies, but on an average, it’s $100 for a household that has the basics which are lighting, furnace, refrigerator, few gadgets and a small appliance or two. There are also ways to reduce this. If you have children or elderly, your local social services department can intervene on your behalf for lower rates or in holding back service cut-off.
http://www.moneyadvicetrust.org/content.asp?ssid=118. Fuel Debts ‘Have Become A Major Part of our Debt Landscape.
Payment varies from state to state, but on average it’s a monthly $30 between a low of 50 gallons to a high of 150 daily. There are industry calculations for this, but simply put, our family of four consumes a monthly average of 15,000 gallons for around $30.
Well, that almost depleted our wallet. Still, we have $20 left.
In such trying times, you cannot afford not to have a mobile phone to ensure connectivity between you and your money prospects. If it’s a tool for your livelihood, it’s a non-negotiable.
Most US mobile phone services are contract-based, but to ensure your hold on your cell phone within the confines of your $300 world, it’s okay to ditch (at least for now), your loyalty to old carrier and switch to a cheap prepaid plan. You’ve got your contacts’ numbers anyway so calling them is not a problem.
Here’s how to further reduce your mobile phone usage cost: Take advantage of free SMS applications, they support most mobile phone operators and can really save you a few good bucks. Try www.sendsmsnow.com, smseverywhere.com, www.freesmstous.com, or the simple Google Send To Phone feature.
For really important contacts that you expect calls from, let them know via Facebook or Twitter that you’ve got a new number. Even a few big name carriers offer easy prepaid mobile phone services for $10 a month that’s packed with values. SMS-only plans are as cheap as $2.50 for a monthly 100 text message quota.
Given that, we’re down to our last $10.
If somebody in the family needs to refill a prescription, then that will have to be done and at all cost. If it’s just your daily dose of Vitamin C, it can really wait awhile. But there is wisdom in including this last item in our pay first list.
Check your medicine cabinet and see what among over-the-counter relief (paracetamol, antihistamine, cough tablets, or kid’s fever sponges) need replenishing. It’s below being rock- bottom when in the midst of a zero balance state, you or your spouse grapples with headache or the baby needs some cough drops – and you haven’t included that in your precious 300.
That’s it! Your $300 stretched to the last dollar to sustain you for a good 30 days.
Given our ranked payable priorities, let’s look at those that are second fiddles and see why setting them aside for the meantime would give you peace of mind, for 30 days at least, even if they are in red envelopes marked urgent notice.
1. Rent or mortgage
We’ve been told about it so many times. One must not skip mortgage payment because of the horrors associated with it – bad credit rating and the high cost and tedious effort of getting it back for good. But why did we not include this in our A-list payables?
Remember, you only have $300 left, whereas average mortgage payment runs up to $800 to $1,000+ a month. So this is really a desperate area. Fact is that you cannot simply be taken out of the house if you are a month delayed in your mortgage payment (and foreclosure doesn’t begin at least after 3 monthly misses). You can also go for that chance to beat the 30-day tardy fee and its consequences by talking to your creditors for a time plan arrangement so it won’t be reflected in your credit rating right away.
The same communication skills should work for your landlord if you are a tenant. Request (okay, beg) to hold back post-dated check deposits or waive late penalties. These are usually approved when landlords see you really are in a dark period but is doing something about it, and that their normal income stream is your priority.
http://mortgage.lovetoknow.com/ Mortgage Foreclosure Process
2. Credit card bills. Same logic as rent or mortgage.
3. Internet connection. Public Wi-Fi spots and libraries are there for a reason.
4. Cable. Use your free internet connection and your resourcefulness.
5. Laundry shops and do-it-for-me services. Work your hands, even for just four Saturdays.
Indeed, these times are so uncertain. Your regular job may be termed redundant after working 10, 20 years. Unthinkable, yes. Impossible, no. In these trying times, “forewarned and armed” is a fresh attitude to consider. Given that, you should not look at a $300 the same way again!
We’d love to know what’s your own top priority expense when you hit rock bottom? What would you do differently? Share to your friends and family and see if you are on the same rebound level. Let us hear about it!
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