How to survive economic hardship, the how to’s of survival in this new world

New government data released says here in the US almost 16% of us are living below the poverty level. Reality is that level is so damn low it makes no sense and that what used to be a decent income doesn’t get you too far these days.

I talk a lot about my own financial journey here but I also have 15 years of experience working in the social service sector. Yes, I am an administrator these days but I do still work directly with families, trying to link them to services. Close friends over the years whose fortunes have nosedived often ask me about services available, and it dawned on me maybe there needs to be a post that is real talk about living on less.
One day you are minding your business living life and the next day you find yourself either out of a job or your income has been cut in half. In the perfect world you have that lovely emergency fund of 6-12 months’ worth of expenses that the financial gurus like Suze Orman like to hawk but chances are you don’t. Fuck you might not even have a spare thousand in the bank, its okay many of us don’t so you aren’t alone. So don’t despair instead you need to sit down and assess the situation. For starters how much money do you have coming in? If you have lost your job, your first step is the unemployment office, don’t delay do it right away! Why? Because it takes time, that’s why, also you might have a jerky former employer who wants to contest your right to benefits and the unemployment folks are overworked. It can take a good month in some cases to see your first check so you need to do that right away, the upside is you generally will find out immediately how much your benefits will be which is good for planning. Another plus is unlike the old days, you rarely have to actually go into a physical office, even in a state like mine, small and rural, an initial application can be filed either by phone or online. So it’s not too stressful. Love technology!
Once you know how much money you actually have coming in, then you need to look at what you have to pay out monthly. If you are lucky you have enough cash to pay all your bills which in that case quit reading this post and catch me on another day. However if what you have to pay is far more than your cash flow…Houston we have a problem. No worries, it’s the process of elimination; you have to have a roof over your head, lights, heat, a phone, food and internet. Contrary to what many will tell you, you have to have internet at home. Looking for a job in 2011 without reliable daily access to the internet will hurt you. Sure you can go to the library and use their shit for free but do you really want to waste gas or bus fare going to the library every day? More importantly potential employers often send emails and you want to be accessible in a timely fashion. Also the sad reality is public libraries often have time limits on their computers so it’s dicey. Sure you can go to a coffee shop every day and use their free Wi-Fi but you know you have to buy something, so spending $5 every day at the Cool Moose coffee shop to use their Wi-Fi is wasting money.
If the reality is all you have enough for barely is the bare essentials it’s okay too, credit scores are important but you can’t eat a FICO score. If it turns out that you can’t pay your credit cards, check out this board. There are ways to keep the leeches at bay…oops I meant bill collectors. Go ahead and tell em you are down on your luck, sometimes they will work with you but generally that means you have to have some money to give em. Without any money to give em they aren’t working with you and counter to what you have heard sending $5 or $10 a month will not prevent you from being sued. However what you do need to know is once your original creditor gets tired of your ass and sales your debt to the bill collection agencies you can send a certified letter return receipt requested to tell em to stop blowing up your phone. Also once a debt is with a debt collector you can use the debt validation process to buy some time and get em off your ass, again read this.
When it comes to debt, there are only two entities that don’t screw around, who you want to be real and honest with, the IRS and the Student Loan folks provided the loans are federal. Both these folks have powers that include snatching every dollar in your bank account, putting liens on your asses and basically making you miserable. That said, the Spousal Unit and I at one point owed the IRS over $60,000 and they worked with us, even the scary IRS knows if you don’t have the money not much they can do and they do have programs to assist. Biggest key with the IRS is always filing your taxes, no matter what. Penalties are far more severe if you don’t file versus not paying, IRS debt can be discharged in a bankruptcy if it’s old enough but you have to have filed your taxes. Student loan folks also have a plethora of programs to assist you when times are rough, again work with these folks if they are among your creditors. These are the only two people outside your four walls that you must not avoid.
If times are so tough that just taking care of the four walls is rough, there is help available admittedly in these tough times that help is getting harder. For food, you can get assistance from either SNAP benefits or the WIC program which is for pregnant/nursing moms and kiddos up to 5. SNAP benefits are far nicer than they used to be, back when I needed them in the early 1990’s they were called food stamps and came in colorful books that looked like funny money so everyone in the line knew you were using food stamps. Today’s SNAP benefits are administered on a debit style card and getting them is fairly easy, Google SNAP benefits for your area and get the details. Seriously if you need em, use em, we all need to eat. WIC benefits are smaller, tend to have higher income limits than SNAP but can assist with milk, formula, juice and other items. For many families using WIC can help the family budget without needing SNAP benefits, again if you need it use it. Milk is damn near $4 a gallon! Most places have food pantries but I gotta be honest in most cases the food pantry is the place of last resort, in other words you and your partner are fighting over the last remaining ramen scraps. It’s not that food pantries aren’t nice it’s just that outside of major urban hubs most are ran by volunteers who collect donated food and the shit the grocery store is about to discard. Quality is an issue and you could end up with shit you don’t eat. It blows my mind the shit so called good folks donate to pantries or programs like mine that feed people. Dude, no one wants canned spaghetti that expired two years ago!
In the US you can get assistance with heat and lights if they are not included in your rent if you are a renter. You can get that assistance if you are not a renter, it’s for folks that need help and the income limits are not too bad, for a family of 4 if you have less than $33, 525 annually in income you qualify. They also will look at your income monthly to take into consideration extenuating circumstances. That assistance is through the Liheap program and it’s a federal program and if you think you need help this winter, get on that shit now. In many states the allocations have been cut so the sooner you get your application in sooner you get help. No shame, if you need it you need it. All this said if you are struggling to pay your utilities the one thing you can’t do is nothing. Especially if you start getting notices with dates they plan on cutting your service off, do not ignore those notices. Technically in many states if it’s in the cold weather months, they aren’t supposed to shut you off but by calling and telling them you have no money to pay, they will tell you who to contact in your area to get help. Sure it sucks to have talk to some faceless representative and admit you have no cash but sitting in the dark is worse.
Lost your medical insurance, well you can try to talk directly with your physician and explain your situation. I have found most doctors are happy to offer a cash paying discount, but if you need medical care regularly while times are tough, you have options. Either find a sliding scale clinic, it will mean bearing your financial soul to strangers who want to see documentation of your newly broke state but it’s okay. If you or your kid needs medication daily to survive screw pride! Get your needs taken care of. That said most of these clinics while okay often require ample amounts of time to wait to be seen.
Your other option for medical coverage is the federal Medicaid program, limits vary from state to state and many providers are loathe to accept Medicaid for payment since the reimbursement rate is straight out of the 1960’s. My best advice if you go this route, talk with your doctor and explain the situation, if you are a long time patient most likely they will let you stay with them. Again another program that involves bearing your financial soul, I will be honest this is the one program that we did take advantage of when our chips were down and I am grateful. It allowed the girl child to get much needed dental care and me to finally get surgery that I needed.
Lastly for women, don’t sleep on Planned Parenthood if times are tough. Look, we all know when our money is down the one thing we can do for free is fuck but chances are the last thing you want to do while broke is add to the family. Planned Parenthood offers a sliding scale for their services.
Holidays around the corner and you are freaking because you bank account is low? Well if you have some money, make ample use of the return of layaway programs. Places like Sears and Wal-Mart know times are tough and with a minimum payment down and paying over 8 weeks you can get winter holiday gifts without breaking the bank. If that is not an option, check with your local social service providers. Seriously the have rocks like to help the have no rocks, my phone is blowing up with moneyed folks who want to assist. There are also programs like the Toys for Tots and many more. The key is getting the information and doing what they instruct you to do. Sign-ups are now so get on it. Some require income verification, some don’t but the one thing they do is help folks in need without judgment.
This post is long enough and this list is by no means exhaustive but the point is help is available. You will have to seek it out and you will need to be patient. You also will need to know that the beleaguered clerks you encounter when applying for benefits are not out for you, in many cases they have become desensitized to human misery yet they want to help. I can also say when dealing with economic hardship you need a sense of humor and to remember the shit you do have. If you have a partner and kids love the fuck out of each other, if you are single love the fuck out of your friends. You are more than a job title or your bank account and financial hardship is where you master that lesson. Times are tough now but shit gets better, worse case you get so far in the hole, fresh starts are still possible. Bankruptcy no longer has the stigma it once did and foreclosure sucks but sometimes unexpected and unwanted changes often bring us what we really need.

Going bankrupt

In American culture, the idea of anyone filing bankruptcy is seen as a personal failing. People wonder how could you? Why didn’t you try hard enough? Maybe you are just a deadbeat. Never mind the fact that the rich and powerful often file bankruptcy (hello…Donald Trump) even companies use the legal protections afforded under the bankruptcy chapters to restructure themselves and get back on the right track.

No, it’s the average Joe’s sorta like myself who tend to shun bankruptcy because well it makes you look bad, you feel like you are walking away from your responsibilities and a host of other reasons some valid and some steeped in emotions. So it may come as a surprise that I am about to get real open here but it looks like I will be going bankrupt, filing bankruptcy that is.

The truth is that for the last 2 years we have been playing a financial version of three card Monty, robbing Peter to pay Paul but not only are we not getting ahead, we are on a boat that had a slow leak but now that leak is not so slow anymore  in fact water is rushing in our financial boat and threatening to drown us.

I have spent the last two years reading all the financial experts, Suze, Dave, etc…reading financial blogs and truly getting a financial education. Problem is that no matter how I cut it, what we need to pay out, exceeds what comes in. For a while the Spousal Unit was talking about going back to school to change careers, maybe go into teaching and while that is still a strong possibility the fact is it would take a year of schooling and student teaching to make that switch. Then there is the hunt for a new job and sadly first year teachers in Maine still make less than what he earns right now as an editor/writer.

I think going back to school is a great long term strategy since we have no retirement, hell we don’t even have health insurance (it was one of the early casualties of trying to pay the creditors) but its not going to get Visa, Mastercard and the vast array of creditors off our backs. Before you ask we have tried working with them, in fact last week I had a conversation with a bill collector that was the last straw. The bill in question was for $3300, well I offered $25 a month as that is the best I can do since I have a lot of bills at the moment. Mister Bill Collector told me no, that was not acceptable and hung up on me. Yes, he hung up on me….so a sista called back and was told that I was not being serious about paying off my debt. Considering 6 months ago I could have only offered up $5 a month, I thought I was doing good.

Anyway after 2 years of struggling, we are finally at a place where we can pay all our bills and expenses required for daily living. We have learned to live off less, its been hard but we are doing it but the reality is we are not chipping away at our debt, there simply is no cash leftover to do that. Health insurance is still out of reach and apparently despite the government saying they care about insuring kids through the SCHIP program, sadly we don’t qualify for that either. Its only the third time in two years that I have applied and despite the colossal drop in income, I was told last week that our income is still decent.  Yep, just stuck in that gray area, too poor to move ahead and too rich to get any help.

I imagine you may be reading this and wondering how much debt do you have? Well excluding our house which is paid off thanks to the largess of family members, we are over $200,000 in the hole, now half of that is my student loans which sad to say will be with me forever (another reason I need to get rid of the debt that I can). The other part of debt is back taxes (early years of the Spousal Unit’s self-employment), medical bills that were not covered by the crap health insurance we used to have and credit card debt.

In the early years of life in Maine when the Spousal Unit was getting established as a freelancer, there would be lulls between pay and credit got used. I cannot say that we have ever used credit to furnish anything extravagant as evidenced by the fact most of the stuff in my house is second-hand including clothes. Our car is a piece of shit, a 12 year old rust bucket, I bought used off a friend when our other car died after years of mistreatment.

No, the lack of savings when we moved here and the husbter deciding to become freelance played a large role in the debt that we now have. In case you are wondering why he chose to become a freelancer, its because when we moved to Maine, there were no editorial jobs like the one he held in Chicago available in Maine. I knew it was a risk we took when getting him to agree to move to Maine which he was not happy about…that’s another story though. The move to Maine was not entirely voluntary on our parts since it involved my ex-spouse and son.

  I am glad I know how we got here so I can work on ways to never be here again. Which is why I am more convinced that despite my personal aversion to bankruptcy that its time to make that move, months ago I used to break into a cold sweat thinking about bankruptcy but now I am thinking relief.

I know there are some who may judge me and that’s fine, but part of why I wrote this and decided to share such a personal issue is because we are living in  a time where folks are killing themselves because of money. Folks lose a job and end their lives…well, here I sit getting ready to make this major leap and I am actually at peace with it.

And yes,  I know my credit score will be shit but the truth is its already shit, it will just be shit and now I can answer my home phone instead of keeping the ringer off….ok, I know I am being light about this but its better than crying.

In the end, I know I have tried the best I can to honor my commitments to my creditors but by the same token, when I see that my kid needs dental care and I am putting it off because I am trying to pay Visa and Discover Card who wrote me off a long time ago because what I offered was not enough. Instead sending me to collections where the collectors have even less mercy, then its time to change course. I am reminded of how on airplanes when they give you the safety spiel you are told to put your mask on first and then take care of others…this is one of those situations.

Perhaps years ago we should have chosen high paying professions, a discussion we have a lot but sometimes looking back does nothing but create tension, right now I can only move ahead.