Living Without a Salary

How to reduce your expenses, so you can live without a salary!

Break-Ups Cost Money June 23, 2010

Sometimes, I wonder if people realize the economic cost of divorce. To say nothing of the emotional and mental costs…divorces hurt, and they hurt bad. It’s never a good thing when couples split up after being together for a long time. (It also hurts when they have been together for a short period of time, but that is not what this is about.) The pure cost of a divorce can be staggering, and it’s not just the lawyer fees and court costs–it’s life after a divorce that becomes expensive. If there are children in the mix, there’s child support along with everything else. Of course, if a couple has been married 10 years or more, the spouse not making as much money usually gets spousal support. Whether the other spouse wants to or not, this is what the law allows. Budgeting and planning during this time can really be a nightmare. Here’s how to keep your sanity, as well as some of your money.

Know Your Boundaries

There is a certain limit that all of us have when it comes to money and time. If you are not clear on these, there are ways to figure this out. First, you want to get very clear on what the plan is when you do split from your spouse. Are you going to live in an area that is relatively expensive, or will it cost less where you are moving to? If there are kids, are you going to share custody or will there be an unequal amount of custody? These issues will determine who gets what and how much. It will also determine how much you need to live on compared to your spouse. And if your spouse seems reluctant to share anything, it may be best to speak with a lawyer instead of your spouse. This will save time and your sanity. And if your income is low, you could seek out a volunteer or pro bono lawyer who could give you some guidance. You must be clear on what is happening before you move forward, or it could become a lot worse.

Set Clear Limits

This is not the time to stay silent on what you want. Make a list of everything you need, including some wants in there. Be clear in what you are expecting and what your limits are. This will keep you from being stretched too much financially. If you are the spouse that needs the child support and/or spousal support, get very clear on how much you will need to maintain a household and take care of everyone’s needs. Set limits on how low you can go, because the other person may want to give the least amount possible. Create a boundary that the other person cannot cross.

If you are the spouse giving the financial support, realize that you made a commitment many years prior to take care of this person for life. This does not end just because the marriage ends–you will end up financially supporting that person for life. This will cost you some money, but if you think of the time your spouse invested in you, it may seem only a pittance for that.

Resistance Does Not Work

Compromise may be difficult during this time, but it is not impossible. Tensions are running high anyway, but not giving in to even the smallest requests will turn the entire process very ugly. Determine what you need or can give, and then build on that. As a supporting spouse, you do not need to be so selfish that your soon-to-be ex and children are living in squalor while you’re living the high life. And as a supported spouse, you also do not need to be that greedy where you are demanding every single penny. There is a middle road where everyone can have their needs met and still maintain some semblance of order and normalcy in their lives.

Common Sense Tactics

During a divorce, probably the last thing you want to think about is money, but this is the cornerstone of life–at least until a better solution comes along. Money makes living life a lot easier, and it one of the things that, if each spouse has enough to meet their needs, can smooth over a lot of other issues. There will still be healing that needs to occur, but it’s one less thing to heal about. Be reasonable and use common sense in all your dealings, as this could mean the difference between constant frustration or finding some peace.

 

Spending Money is Good for the Economy June 22, 2010

Yes, this goes against what everyone is telling you these days–“Stop spending money”, or “Save your money”. But spending money can be good for the economy. There are the obvious reasons why this is true, such as it create jobs, helps small businesses stay in business, and other things like that. However, no one really talks about the real reason why spending money is good for the economy.

Money Goes ‘Round and ‘Round

Have you heard the expression, “Money makes the world go round”? You may have thought this meant that we need money to live on or survive. While this interpretation is true, it is not the entire story. The myth of money is that there is only a “fixed” amount of money in the world. Physically, this is true. However, this is not exactly the way things work. Money must circulate on a daily basis for the economy to be healthy. This is similar to the way blood must circulate constantly for the body and mind to be healthy. In fact, the body needs several thousand quarts of blood every day, but on any given day, there is only 5 quarts of blood in a body. How do we get what we need? It is circulated.

Money circulates in the same way. It changes hands from one person to another, creating a healthy economy. What one person’s extravagant spending is another person’s amazing successful income. Eventually, that money comes back again as income for you. If the circulation slows or stops, everything falls apart and we have a sick or dead economy.

Spending Responsibly

While spending money may be good for the economy, it may not always be good for your economy. What this means is that, while it is okay to spend money every so often for more than just your needs, it’s not always prudent to do so. You must prepare for your needs and some wants, but you do not want to spend so much that you are in debt and stressing out about your finances. If you strike a nice balance, then you do not have to feel bad about spending money on yourself every so often.

 

Rent to Own Scam June 11, 2010

“You can have a house full of new furniture for X dollars per month!” says the commercial for rent to own companies. These commercials are usually shown during the times when those most likely to fall for this scam are watching TV. And if you notice, most of these stores are located in the poorer neighborhoods, where people do not have as much money and would be enticed by such deals. However, these deals are not the bargains they are made out to be, and if you have ever fallen for this scam, you will know what I am talking about.

Example

Say you want to buy a furniture set for your living room, and you see an ad that has what you want for $27.99 per week. After looking at your finances, you realize that you can indeed afford that, so you sign up to get the furniture. They deliver it and it looks so nice in your living room! You’re thinking, “Why did I wait so long before doing this? It’s perfect!”

Yeah, perfect. Let’s take an analytical look at your “perfect” deal. First of all, that price is per week, which makes your monthly expense about $112. That is almost a car payment, which if you are driving a beat up wreck, would it not make more sense to buy a different vehicle? Okay, so you know that you are spending over $100 per month on your furniture, and you justify that if you buy a furniture set elsewhere, you would have to make payments as well. Let’s take a look at that aspect.

A Different Example

Suppose you went to a different furniture store that offers a payment plan, and you find a a set that you like that costs $859, with total finance charges of about $100, making the total price $959. They want you to pay $100 per month, and you think, “But I can get the other set for $27.99 per week.” Of course, now you can see that they are really $12 cheaper per month than the rent to own place.

The Scam

Here’s where the scam really comes in…how many weeks are you obligated to pay that $27.99 per week? According to the fine print, you would be paying on your set for 91 weeks. $27.99 times 91 weeks is $2,547.09. This amount is a lot more than $959! You would actually be paying 3 times more for the same set. In that same fine print, they admit that the set is only worth $859, but the finance charges are over $1,200!! Talk about predatory lending–this is much worse than a payday loan! You would be better off saving your money in a high yield savings account until you have enough money to buy a furniture set outright.

Alternative Options

Of course, there are always alternatives when contemplating buying something. And to get to alternatives, you must ask yourself if you “need” or “want” that furniture set. Does it really matter in the larger scope of life that you have that set? What other things can you do for seating options in your living room? A few ideas come to mind:

  1. Get lawn chairs and place them in your living room. While this may not be the most comfortable option you have, it is a cheap option and if you do not have that much money to buy a furniture set, it can work for a while until you have enough money.
  2. Use blankets to make cushions, and sit on the floor. This could work for a while if you have no money whatsoever to buy anything.
  3. If you have a bit more money, you could buy a large beanbag-type item with foam in it. I personally have what is called a “sofa sac” and it is so comfortable! It cost about $359. But there are cheaper options for you to choose from.
  4. Hand-me-down furniture can work too. If you know someone else is getting a new furniture set, ask if you can have their old set. Chances are, they will be glad to get rid of it without having to pay to have it hauled away to the dump. You can also sift through the free listing on Craigslist for furniture.

Do Not Fall for the Scam

Many other rent to own items are set up in the same way. You will often end up paying 2-3 times more than what the item is worth, leaving you with even less cash in your pocket. Instead, put that money to good use by either saving it or investing it so that you can earn some money on your money. Look for inexpensive ways to get what you need (or want) without having to rent to own it. Or, choose to do without that item. If more people chose not to give these companies the business, they will eventually have to go out of business.

 

Living on a Tight Budget January 13, 2009

The news is littered lately with businesses cutting jobs or shutting down plants in various cities and towns across the United States. Of course, this is nothing new to see today because it has been happening for at least two years now, or more. Those affected by these decreasing jobs are finding it harder and harder to create a workable budget. They may find odd jobs, or another job that pay less than their previous jobs did, and it is making life extremely hard. And on it goes…the media loves to talk about how hard it is to make a decent living in today’s economy, and sensationalize how tough it is. While I have compassion for those who are suddenly left with little to no income coming in, I feel the media is blowing the situation way out of proportion. The reason? Because they don’t focus on the other side of the spectrum–creating your own job, or living on a casual income. They don’t focus on the hope there is…only the discouragement. Really, why do you think America is called “The Land of Opportunity”?

A tight budget is also the fallout of the recession we have right now. However, life doesn’t have to be depressing or fall short of the abundance of love and life. Living on any size budget doesn’t mean only the rich get to have fun…

While you may not be able to spend as much money, the best part of living on a tight budget is to find the adventure of searching for ways to conserve money, while having fun. What do I mean by that? Here is an example…say it is summer and you want something fun to do with your kids. Instead of sitting home, bemoaning the fact that you have no extra fun money to go to places that cost money, why not search for the free attractions in your town/city or surrounding areas? You will more than likely find that those things can be just as fun, or more so, than the activities that actually cost money.

And how do you even create a budget with a limited income? I wrote a book about that very topic. You can find it here.