I just watched the series premier of "Downsized" on WE. As a bankruptcy attorney, I found this show very interesting. As the name implies, it is about a family coping after having filed bankruptcy. Prior to bankruptcy, the husband owned a construction company and earned a very comfortable living. The family was able to live well and didn't really think about money.
As a bankruptcy attorney I found this show very intriguing. I meet with many clients who are struggling just to pay their minimal living expenses on a day to day basis. I am always looking for ways to identify with them and hope to be able to provide them with suggestions on how to streamline their finances. Overall, I try to give my clients hope that even though they are facing an extremely difficult time in their lives, that this time will make them stronger and that they can and will get through it.
One thing the show focused on was the way that the teenage children were dealing with the family struggling to make ends meet. While the teens were frustrated with the situation, 3 of them went dumpster diving to look for cans and other goods to recycle and came up with about $20.00 to go towards the family's rent. Then, one of the teens sold his baseball glove for $100.00 which made the family's rent for that month.
"Downsized" reminded me it is not and probably will never be easy to deal with a lack of income. In our present economy many professional, educated and hard-working people are finding themselves in extreme financial hardship. These are people who have never found themselves wanting for anything. They are the true middle class.....and just as the family in "Downsized" discussed; major lifestyle changes need to be made when there is a significant decrease in income.
A few of the suggestions that I often make to clients looking to decrease expenses are as follows:
1. Cancel Cable and Internet.
Again....I will stress that none of these suggestions are fun. Any person can find a reason to talk themselves out of canceling cable or Internet service. I have heard many excuses including my personal favorite that "my kid needs it for school." I suggest speaking to the teacher or school and explaining that Internet isn't in the budget. If the school can't give homework assignments, post grades, etc., on paper then just go to the library.
2. Cut out the gym membership.
I am guessing you have tennis shoes. Go outside and run for free.
3. Cut Coupons and Shop Sales on Groceries
I am constantly amazed about how many people tell me that they go to the grocery store and spend money without any limits. Groceries are an expenses that you can control much more easily than a gas or electric bill. Take advantage of this by cutting coupons and only buying what is on sale. Plan your meals around the sale items you purchase.
4. Don't Ever Eat Out...this includes lunch
Seriously. NEVER. It can be done. I recall a number of years when my family did not eat out when I was a child. If you are having trouble making your rent or mortgage payment you just cannot afford to eat out. End of story.
5. Go to Cash
Stop using the debit card as your primary means to make purchases. Go to cash instead. Use your budget to lay out how much cash you get each month for food, clothing, gas, and other variable living expenses. When the cash is done you are done spending until next month. When you can see how much money there is and can physically see the cash you are spending you will spend less. It is amazing how that coffee at a fast food restaurant or soda at the gas station add up. You may think I am overreacting with this one, but I look at people's bank statements all the time and it amazes me how fast the little things add up.
6. Cut out the dance classes, soccer leagues, or any other unnecessary classes or activities.
These are not needs. They are wants. Being able to pay rent or mortgage is more important than fun.
7. No Vacations
I don't care if it is a weekend 2 hours away. I don't care how much you think you "deserve" it. If you are really struggling just push the idea of a vacation out of your mind. You can do it. I know plenty of people who haven't been on a vacation in 10 years. Again, this is not fun...this is the manual for those who are just trying to make ends meet.
8. Do not worry about the Jones
Because more and more people struggling financially were traditionally middle-class, they feel the need to maintain a certain standard for their social circle. This pride can cost them. Let your friends in on the fact that you are struggling and if they are really your friends they will understand. This will also make it less likely that they will put you in uncomfortable situations such as inviting you to an expensive dinner or on a weekend trip. It will also make you feel better because when you are around them you will not feel the need to put on a persona that everything is great with your finances.
9. Remember what you do have
If you, your spouse and your children are healthy you have everything. Many wealthy people are sitting in hospitals with sick children right now and wish that they could buy their children better. They cannot. If you have the love of your family and your family is blessed with health then your finances are not the biggest problem you could be facing. When you feel hopeless remember that you always have something to be thankful for and that it could always be worse.
10. Make it fun to stop spending
Believe it or not it can be fun to watch your money. It is rewarding to live within your means. It is fun to see that you saved $15.00 at the grocery store or that you were able to use banking points to buy a gift card to give as a gift. You feel good when you find $25.00 in change around the house. Focus on the positive in what you are doing with your limited resources.
This is in no way an exhaustive list. There are no limits on what you or your family can do to make ends meet in a sticky financial situation. While many families are going through extremely difficult financial situations right now, it is important to remember that you cannot move forward if you are without hope. While it can often seem like a hopeless situation, it can also bring families together and help shape children into strong adults.
Please post any additional tips you have for cost-cutting in the comments section. As always, if you live in central Indiana and feel you may need to file bankruptcy you can meet with me at Halcomb Singler LLP, in Carmel, Indiana. Please contact our office at 317-575-8222 or just click here for an appointment.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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