Denver recently passed an “outdoor camping ban” which, in practice, is simply a law making it illegal to be homeless. This is far from a solution to the homelessness problem, it will just move the homeless to surrounding cities and states. It made me think about actual solutions to homelessness in America.
Remembering games in elementary school, when the ball went out of bounds, my friends and I would yell, “Do over!” and get another shot. That is fine for the playground but obviously doesn't cross over into financial choices. Thinking back over my financial life, there are a number of instances where I wish I could call for a “do over!”
If I had my life to do over, I would have finished college before having kids. I would have started saving and investing earlier, taking advantage of the awesomeness that is compounding interest. I would have bought a house before the bubble. But the number one financial choice I wish I could do over: I would have started budgeting sooner!
For too many years, I spent money like water, letting it flow in and out of my life but not making any real choices about how I used it. I cringe to think of how much money I wasted in my 20's due to irresponsible overspending and overdraft fees. I can't do over those years, and that money (which could be compounding as we speak!) is gone forever. It's never too late to change habits and stop the damage, though.
It took a drastic pay cut and brush with food stamps to get my butt in gear and start really managing my money. I had to budget out of necessity. What a revelation! Making a budget meant becoming aware of my spending, which wasn't in line with my income, and made me reevaluate what I considered needs. I started using cash envelopes. I made an envelope for each budget category so I couldn't overspend. I couldn't overdraw our account. Financial responsibility became a habit. In a little over a year, I was able to turn our situation around, even with a low income. I saved a quarter of our income, dropped the food stamps, and returned to college to finish my degree. I will graduate debt free.
Without becoming aware of my poor money habits and making deliberate choices about how I would manage our money, I would still be wishing for the do over. I can be glad that I'm making good choices now, and try not to kick myself over the choices I didn't make sooner.
Image by Gamma Man.
This post is by Barbara Friedberg, MBA, MS, who is editor-in-chief of Barbara Friedberg Personal Finance. You can view my post at Faithful with a Few. We shared this topic: “You're homeless/poor, how would you change your situation?”
A BIT ABOUT ME
I confess. I’m a worrier. I think I was born this way. Although I’m determined to be a “glass half full” girl, I always have a “what if” plan.
What if we lose our jobs?
What if the market tanks?
What if we have to lower the price on our “for sale” home (already happened)? What if the house burns down?
You get the idea.
I’ve thought about the “what ifs” of a financial catastrophe and how I would make ends meet. With the proper confluence of events, anyone could become poor. After all, look at the recent tsunami in Japan. In California, earthquake insurance is prohibitively expensive, as is flood insurance in the Midwest. A bad earthquake or flood could cause widespread ruin.
You can plan as much as you want, but, bad stuff happens.
Before I go on with my response, I must give a shout out to two inspirational simplicity figures; Jacob Lund from Early Retirement Extreme and Tom Shadyac the famous movie director of Liar, Liar, Bruce Almighty, and The Nutty Professor (to name a few). Jacob saved most of his income for several years, and left the conventional work force. He lives what might be called an inexpensive minimalist lifestyle.
Shadyac, a wealthy Hollywood figure who previously owned multiple mansions and other trappings of the super rich, drastically changed his lifestyle. After selling all of his multimillion dollar mansions and firing his extensive staff, he now lives in a double wide 1,000 square foot trailer in Hawaii. By Hollywood standards, he is definitely roughing it!
Both men are living the simple life by choice.
These choices aren’t the same as being forced into poverty by situations outside your control. Yet, they illustrate how most of us are living lives with way more than we need.
Although I try to be mindful of waste and excess, I acknowledge that I own and consume lots more than I need!
What if simple living is not your choice, you are just poor? Then what?
Here’s what I would do if I lost it all.
- I’d remember to be grateful for what I already have; my health, friends, and family.
- Short term, I’d sell whatever I could to raise cash; car, furniture, stuff.
- Next, I’d take a room at the YWCA to cut living costs.
- I’d eat as cheaply as possible; beans, rice, peanut butter, and whatever veggies were on sale.
- I would get a job FAST to bring in money immediately while I looked for a career job. My top employment choices would be Lowe’s, Home Depot, and fast food. Why? I love the hardware/home improvement stores. Fast food is always looking and they pay more than minimum wage.
- When I wasn’t working, I’d relentlessly call, write, and contact anyone who might help me find a career job.
- Every single expense would be cut to the bare bones, no exceptions. Shop for necessities at the dollar stores, haircut at Super Cuts, no new clothes etc.
- Every day I would wake up and problem solve ways to generate cash.
- I would ask my place of worship or other social service agencies for help, if necessary.
This activity was both uplifting and confronting. Having a “worst case scenario” plan makes me feel in control and able to handle anything. I empathize with those in need and even feel a bit guilty for my good fortune. In fact, I frequently feel that I could do more for others.
As Albert Ellis, the great psychologist once said, “Except death, every other problem is at worst, 100% inconvenient.” No matter what the challenge, I try to keep this mindset and maintain a solution oriented attitude.
How would you handle poverty or homelessness?
Photo by BlatantNews.