You Need a Plan


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Even you’re scraping by on a minimum-wage job, you need a budget.

The basic plan is pretty straightforward:

  1. Total your income from all sources
  2. Estimate you total expenses
  3. Calculate the difference

If the difference is negative, you need to figure out how to fix that! You can either increase your income, or decrease the outgo, or both. The easiest way is usually to decrease your outgo.

If you have been caught up in the credit card trap, the first step is to cut all of them up. Contact the credit card issuers, and let them know that you are in trouble, and you will not be be charging anything for a while, and tell them that you need for them to cut off your credit supply. You may be able to arrange some relief from your credit card company — especially if the alternative is your bankruptcy, in which case, they don’t get anything. Then, if you can’t afford to pay cash, don’t buy it.

LivingMinimumWageIf you smoke – stop. That can save you over $100/week! That’s one of the most expensive gratuitous habits you can have. Except maybe for illegal drugs.

Groceries? One thing I learned in my early years was that preparing my lunch and taking it to work every day was equivalent to a $200/month tax-free raise. That was a long time ago, so it’s closer to $500/month now. When you go to the grocery store, use a list, and stick with it. And remember: If it comes in a box or a bag, it’s probably overpriced.

If you don’t know how to cook, learn! It’s not hard, and the only things you really need are a pot, a good knife, a big spoon, and a source of heat. More equipment is nice, but I know from my own personal experience that you can prepare adequately nutritious meals with only those utensils. And you can get all of those at a thrift store for not much more than the price of a Big Mac.

Clothes? Back when I was in college, and was working in the cafeteria to get by, I found that I could still dress OK even for special occasions by buying all of my clothing (except underwear) in thrift stores. I once bought a really nice double-breasted suit for $7.50. Even in the mid-seventies, that was a pretty good deal. I was wearing that suit when I met the girl I later married.

Transportation? If you live in an area with bus service, you will find that is the cheapest way to get around. Well, maybe walking is cheaper. And you can probably find a serviceable bicycle for less than the cost of a tank of gas.

Housing? That can be a problem, but you can reduce expenses by getting a roommate. If the price of housing is just way too much, consider moving to an area with cheaper housing.

I’ve been through times where I had to make the decision of whether to eat or pay the rent and buy transportation to get to work for a week while waiting on my first paycheck. As it turned out, fasting for a week didn’t do me any harm.

Most of the readers of this are not in such dire circumstances, so trimming expenses will not be as difficult. But I have personally lived through all of the above (I didn’t smoke or do dope, which made things much easier!), so I know it can be done.

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