Chaudywogbaaga

Paying Bills With Little or No Income
This is perhaps the hardest task of any budget. When you have bills that you simply don’t have the money for. It is possibly also the most stress inducing realization in a budget that the money coming in is not enough to pay for the money going out to even essentials.

There are several common reactions to this situation. One get a second or third job. If there are any to be had. Remember we’re talking about a failing economy, local or otherwise, there may not be more jobs to be had if there are any jobs to be had.

There is almost always the possibility of taking a job and being “under employed". My definition for this would be when someone is employed in a job that does not adequately compensate them for their needs. This would be a job that does not pay enough to cover living expenses. At this point the only reason to hold such a job is to delay the eventual financial crash. Delaying a financial crash may be all that’s needed but a better plan should be formulated as soon as possible.

The second reaction is to try and wait it out. I have to admit that this is my default reaction, that somehow the money will show up later and all I need to do is stretch my bill payments out until the money shows up. This generally just makes your creditors mad at you.

In the best of times, these situations do work. In more troubling times they may make things worse or just be a waste of time. There are several other options that can work in a failing economy and they really should be combined for better effect.

The first option is paying what you can of the bills you can instead of waiting until you can pay the whole amount. This shows your creditors that you do want to pay their bills and that can be important when they decide what to do with you.

The second option is talking to them as soon as you know you are going to have trouble paying a bill. I have the hardest time with this one. It is a smart move to keep the lines of communication open instead of hiding from your creditors.

The third option is to investigate any government programs that you qualify for that will help you pay your bills. These vary depending on where you live. It may be difficult to qualify for these programs and their availability may change from time to time, but trying usually just takes your time and some paperwork.

A questionable fourth option, instead of being employed in a second or third job where you are earning a comparatively low income, it may make sense to try an alternate income stream. This option is a big gamble because it is unproven and if it were cut and dry, then a large company would already be doing it somewhere. Alternate income streams usually consist of either small items you can make and sell quickly or something made once that can be sold over and over again. Crafts and book writing falls in this category. Obviously everyone that makes a craft or writes a book thinks that everyone is going to want one. This is almost always not the case. It is however possible that some people may want what you produce and it makes you some money. There are plenty of online resources that enable people to create and sell products at very little or no cost to themselves. This makes an ideal situation for someone with no money. I have heard stories of people in the Great Depression that would make some item and then walk door to door with them to sell them. Usually this is a very labor intensive effort but it may be worth it.

I’ve noticed something very odd about people’s purchasing habits. They will readily pay ten to twenty dollars on a meal or a haircut but hand them a more durable item to purchase and they will balk at the same dollar amount even if they will be able to use that item for years.

I recently made a few items and tried to sell them at a craft show. Nearly everyone that walked by would suddenly stop and exclaim “Wow!” or “Amazing!". Some items I had were priced approaching the $200 range, most were $20 to $40 dollars. Many people were interested in the $20 to $40 items and really no one argued that the prices were unreasonable. In the end no one bought anything! I debated why this was with myself for quite some time and finally remembered a principle that I had formulated years ago.

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I periodically will draw pictures to teach my kids things. Some are about science, some about language, really they could be anything that would benefit from a visual aid. We recently found this drawing in a stack of papers. I remember it only vaguely but I can tell I drew it. The thing is, I can’t tell why I drew it yet we thought it important enough to keep. It looks like the numbers are steps to something but I can’t figure out what. Sure I could come up with explanations for each individual drawing but I can’t put them together, especially in the order they’re numbered in.

How would you interpret these?

Savings
The first thing you want to do in your budget is save money. Except if you owe money. Huh? How does that work?

If you owe money to credit cards or loans, it makes no sense to be storing money away because you will not get the same interest rate in from your savings account as is going out with your debit. Banks make sure of that, it’s how they stay in business.

The only exception to that is a home mortgage and thats only because of the length of the loan. Although it does make sense to pay down that mortgage as fast as possible, it will still take so long to pay off that if anything happens where you need access to money it would no longer be easily available once paid into the mortgage. In this instance, it makes sense to save up to a certain extent.

How much should you save if you have a mortgage? I’ve heard figures of three to six months of operating cost. I’ve never heard justification for those figures. As a practical minimum, you should try to have at least one month’s income saved. Make this a priority to get at least that in your checking account and keep it there. That figure will change as your income changes. To figure out how much savings you should have while trying to pay down a mortgage, consider what is the likely worst case scenario where you would suddenly need money. How much would you need to survive? Usually people think of their car breaking down and the repair costs. If you own your home, what about if your furnace died on you in the middle of winter? Perhaps your hot water heater? You want to be prepared for that possibility and add that to the one month’s income.

EDIT: I recently ran into the suggestion that if you have a mortgage and home equity line of credit there is little reason to save money. All you do is pay down the mortgage when you have money. This would seem to make sense as long as the line of credit is just tacked on to the end of the mortgage. Otherwise, if it needs to be paid back as an added bill it will make your monthly burden greater. In the end it means paying more money to the banks for the money you can use now. Money now is always attractive but it will hurt you down the line. I’m torn on if I agree with this recommendation. It may or may not work based on your needs.

If you’re renting, then you probably only need to worry about your vehicle and maybe your stove and refrigerator if that’s not included in the apartment deal.

It will take time to build up to that figure, in the mean time, if you need to draw from your savings fund treat it like your own personal credit card. Figure out what your compounded interest would be. Instead of a never ending stream of money to a credit card company, you’ll see your savings account bloom!

Again, forcing yourself to save with that kind of discipline takes willpower. Watch for the signs of failing willpower.

One way to enforce saving is to have one person handle the spending budget, and the other handle savings. Have the person handling savings act like you owe them money when you draw from spending. They can hand you monthly bills to remind you to pay it back. Don’t take the game too far though and increase the stress in the household. If the money isn’t there, you can’t save it, don’t force the idea.

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A Budget

There is the accountant’s budget, the one that tells you where your money went and there is the planning budget, the one that tells you where you want your money to go. Both are needed but the planning budget is often the one overlooked. Careful planning of where your money will go is possibly more important than where your money went. The only thing that is more important than that is how much money you currently have.

The thing that kills the most well constructed budget is wanting. Budgeting takes willpower and willpower is a finite commodity, much like money. When you’ve used up your willpower you’ll go out and splurge on something with money that was supposed to go someplace else or even worse money you don’t have.
Willpower failure is usually characterized by either a feeling like “I’ve done really well, I can afford to let go a little” or “I just don’t care I need to do something nice for myself”. If you find yourself or a family member saying similar things, the draw can be very hard to resist.

It is vitally important that the symptoms of willpower failure be recognized. They can harm your budget but can do much worse. When people are under financial strain they are more likely to drink heavily which could lead to addiction or possibly drunk driving. People also suffer more marital discord when under financial stress. Both of these are symptoms of a failing will.

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My experiment is running, but not quite in the direction I was thinking or hoping. I’ve had equipment problems that have prevented me from doing the kind of work that I was looking at. On top of that, I had a casting near failure and a total failure but that was mostly because I was experimenting. I did, however, learn a lot from the failures. I’m working on my blacksmithing skills and I’m improving. That has been encouraging.

Now I want to work on enameling my metal creations. I was skeptical I would be able to figure out how to do it for a while but now it looks like its easier than I was thinking. I’ve read that some have even enameled with river sand but more commonly silica sand would be used on the red hot metal. I was thinking that I would have to find some kind of fluxing agent (which usually ends up being borax) and that I would have to find some way of sticking crushed glass to the metal while it was cool. In the end I may have to use a flux for aluminum, I should be able to enamel copper and steel just by getting them hot enough.

I really want to set up several avenues of income so that I’m not reliant on only one. So far I haven’t been able to do that.

Last time we looked at starting a plan to survive. Now we’ll go into a little more detail on how to go about planning.

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If you know me, that’s a weird statement to come from me. I’m a nerd/geek and sports don’t play prominently in my life’s activities. There was a time when I tried to fake interest in the Super Bowl, now I just don’t bother. At most I occasionally play floor hockey and avoid professional sports altogether. I still don’t particularly like professional sports, so what do I mean when I say that sports are important?

I have heard the statement that it is important to give kids something to do, especially in reference to inner cities. Something to keep them out of trouble. I don’t disagree with that, but it’s not very compelling. Keeping kids busy could be done with video games and TV but that doesn’t seem to work. No sports do more than just keep kids busy.

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I’ve been slowly working on a book on this subject. I’ve decided to put my working notes up on Chaudywogbaaga to spur me to keep working on it. I’ve refined the title to Surviving In A Suburb because there are plenty of books out there on how to homestead on little or nothing. The problem is that some of the skills or suggestions are not transferable to a urban or suburban setting.

Surviving In A Suburb

How to be mostly self sufficient with limited resources in a suburban or urban environment.

Your Needs

All humans have basic needs. The most often heard list is “Food, clothing and shelter” but that’s only part of the list. A look at third world countries would prompt us to add clean water, a clean body and health. However in a urban or suburban environment, there are other needs. They are time and a low stress environment.

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Most people hate dressing up in a suit and tie. I don’t mind it. In fact I really enjoy it, the feeling of a suit that fits well (getting the right neck size is key). No, it’s not the dressing up that bothers me. It’s the person at the other end of the desk. Their whole function is to find out why they shouldn’t hire you. The person that they are least able to inflict this humiliating task on is the person they hire. The very thought of this social construct is revolting to me. It may produce a hearty candidate or it might just get a good lier the job. It means that the first contact you have to start a job is a humiliating one.

I propose an alternative. It could be easily done. It would help an employee become a better employee and it could mean more profits for the company that does it.

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