A Reader Question: What To Do When There's No Money And No Hope

While I'm away I'll be posting some questions that readers have sent to me along with the answers. (Names have been changed to protect privacy.)

Reader Question:

Hi Anna! 

I saw you on The Nate Show and was immediately obsessed! I have been looking for help for my spending disease for SO long. Thank you for being there for us. I am exciting to start but terrified of failing. I wake in the morning and go buy coffee for 64 cents. I justify it by saying that if I bought coffee and cream at the market, more than likely the cream would spoil and then it would be a waste.

This is just a little example of what I mean. I have a MUCH bigger problem at the thrift stores (which I adore) since shoes are only $3-5. Can I change this attitude? I am not really in debt, as much as I am underwater in my income vs. living expenses. I am retired and on disability with a fixed income (SS). I am $150 a month short on just bare living. Is there ANYTHING I can do? It seems so helpless most of the time. 

Thank you for reading this and any help would be great!

Kathleen

Hi Kathleen,

Thank you for your email. There is definitely something you can do. Take your power back!

1. Determine what you want out of life. What are you goals? Think about it this way: what do you truly want out of life? What do you want your life to feel like everyday?

2. Evaluate where your money is really going. Look through the last 3 months of your bank statements to see it all on paper. If you use cash more than your debit card then start to track all of your spending for the next month.

3. Then, make your Wants and Needs.

4. Next, (this is what I did) cut out your Wants.

5. Set a time frame. 6 months, a year, etc. The beginning is the hardest part so I recommend a year.

6. Know that it is going to be hard.

7. It will be hard. Look back at what you wrote in your #1.

8. Keep going. Everyday look back at what you wrote in #1.

9. The end of the month comes. You'll see that there is money left when there used to not be any money left.

10. Start the new month.

Remember that if you mess up, and you will mess up (I messed up a lot) keep going. Choose to change your life and your financial situation the next time you're faced with a choice to spend money or not. I used to overspend every month by $200-$300 every month. I was hopeless too. I cut the spending cycle cold turkey.

It's what worked for me. Be committed to the process.

Also, a great resource is the Community section on my blog. Connect with like-minded people and get support.

Hang in there Kathleen and stay strong.

Anna 

A Reader Question: Calculating The Money You Are NOT Spending

While I'm away I'll be posting some questions that readers have sent to me along with the answers. (Names have been changed to protect privacy.)

Reader Question:

Hi Anna, 

Love your blog. Can you tell me how you calculate the money you are NOT spending? I find that I am cutting back a lot to get rid of the remainder of my consumer debt but I'm not sure if that is actually going towards my debt or to other things... which would completely defeat the purpose of cutting back! Do you put the money you are not spending in an envelope of stash it away somewhere? Thanks a lot! - Lynn

Hi Lynn,

 

Thanks! And, GREAT question! So, I use the regular free paper check register from the bank to calculate everything and I use that as my official record rather than going off of the online banking reports or even the paper statements. Those only get used to help me make sure every purchase, cost and deposit gets inputed into the paper check register correctly. I get paid once a month so I went from paycheck to paycheck to determine each months savings. If you get paid every two weeks you would just do the method every 2 weeks instead of monthly.

 

For example:

- Get paid $2,000 on September 1. Write it in the check register.

- Pay $500 for rent. Write it in the check register and subtract from total.

- Pay $50 for groceries. Write it in the check register and subtract from total.

- Pay $20 for utilities. Write it in the check register and subtract from total. 

- After 2 weeks you have $1,430 left.

- Pay day again on September 14- $2,000

 

So the total savings for the month would be the amount that is in your check registry right before pay day which is $1,430. With the $1,430 send a check right off to the creditors. (more explanation on my debt-repayment method here). Then, once pay day hits the new savings period starts.

 

To answer the other part of your question, I sent the payment for my debt off right when I had the money (at the end of the month) as opposed to keeping it until I had the total-payoff amount- that way not as much interest continued to accrue since the "total due" was getting knocked down each month. (Here's another post that addresses some of your questions too)

 

 

Best of luck!

Anna

The Social Side

image via pinterst

Ahhh... this is a BIG one.

The question is: how do you have a social life, keep your friends AND do a Spending Fast?! This is a question and topic that gets brought up a lot and it's proven itself to be a major source of trouble for people who decide to take on a Spending Fast.

I want to give a hearty Thank You to Katherine for letting me share her recent question with you- Thanks Katherine! (I said that heart-i-ly over here. I only wish you could have heard it. It was pretty good.)

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Subject: Reducing debt and having a social life?
Message:

Hi Anna-

I love, love your blog! Your honesty is terrific. I REALLY want to reduce my debt, but my social life does me in. I have several good girlfriends that either never have to worry about money or simply choose not to...because I just can't keep up with their lifestyle. It's nothing crazy, but I really can't afford drinks and dinner out multiple times a week. How did you survive a year of not eating out and keep your friends? I do suggest cheap or free activities, but inevitably activities costing money come up. Tips for how to survive?

Thanks! And keep up the posts!

Katherine

image via larken design

Hi Katherine,

Thank you for your email and niceness!

The friend/social thing is tricky. It was crazy when I realized how much money came into play with my interactions with people. I have to admit there were some very awkward times during the Spending Fast in relation to doing things with others. The people in my life were used to me doing things with them (everything) and then suddenly I wasn't able to do all of the same things with them anymore. People didn't like it and they ended up feeling sorry for me and they would offer to buy whatever for me so I could participate in whatever was going on which totally was not the point of the Spending Fast so even having them offer seemed to make things *feel* awkward! I would tell them "Thanks, but No Thanks, I decided to this so I'm gonna do it". I think the key is to make it seem like you're not having a hard time with doing the Spending Fast and that you're not like "Woe is me, look at me suffering over here..." friends don't want to see their friends suffer, you know.

Some suggestions: If you continue to feel pressured, then give your buds an explanation and be honest if you can't afford to do something AND then seriously, don't do it. Be matter-of-fact about it. Don't dwell on not being able to do something. Move on to another subject. Suggest something else to do. If the friend persists in their questioning or if they insist on paying so you can participate tell them all about what you are doing and why, tell them that you're going to be in a better place at the end of the Spending Fast and that's why you're doing it in the 1st place... that will go a long way in helping the situation.

Some more suggestions: Go along with your friends and do the cheapest (read: free) version of whatever they are doing. For example, if they are going for drinks get a tonic or tap water with lime so it LOOKS like a drink and no one will give you grief (I've found most places charge for tonic and soda water so tap water is usually the best free option available. Also, bring shooters from the liquor store and stash in your purse if you want to drink... those will be A LOT cheaper than drinking at the bars). Have drinks at someone's (or your) house before you all go out. If it's dinner out that they're doing, find a friend to split an appetizer with or eat dinner at home before you go or just eat the free bread the restaurant offers and have your tonic/tap water. Just don't make it a big deal that you're not spending money. Have a great time. Don't focus on the not being able to spend money part. It's not about spending money it's about spending time with your friends and the money-spending-part is just a common side-effect of hanging out with friends. You're being pro-active and doing what you need to do to get yourself out of debt. It's a very good and responsible thing to undertake.

Also, I think you might be surprised how many of your buds are in the same situation financial situation as you and you just don't know it. Being broke and being in debt isn't something that many people talk about. It's typically considered very private information. A lot of people do what they have to do to keep up appearances and they may not be doing as well financially as they seem to be. Maybe your friends would welcome some "cutting back" too. I racked up a lot of my debt because I kept doing things and buying things that I just could not afford because I wanted to keep up appearances and keep up with everyone else. I tried to avoid realizing and recognizing this for a long time and I got into a lot of debt because of it.

Doing a Spending Fast/Spending Diet is hard and there are sacrifices that have to happen. Dynamics of some relationships might change. It is totally possible. You also might have to not do some things in your getting-out-of-debt process. But just know that despite the occasional awkwardness, the hard times REALLY DO pay-off in the long run. Trust me- it is SO worth it!

Really, the bottom-line is that if your friends don't think that you're suffering and if they still get to hang out with you (even if it is in a modified or different capacity than usual) then doing your Spending Fast/Spending Diet will go A LOT smoother.

As a result of me doing the Spending Fast I've had some friends start doing Spending Fasts too and it's been (ironically) hard to be on the other side of it. I found I don't really like hear "No, I can't go because I'm on a Spending Fast"! (even though I'm still doing a Spending Diet and would not be participating in the eating out either) Ermmm. D'OH! Of course, I think they should do a Spending Fast if they too are in debt or need to establish stronger financial footing. 

Friends are there to understand and accept you with where you're at and friends want what's best for you even if it means making some tweaks to the social scene you're all accustomed to.

Hang in there and be strong Katherine. You can do it. 

Anna 

(scroll down for things to do with friends on the cheap)

FREE (OR SUPER CHEAP) THINGS TO DO WITH FRIENDS:

• Eat your brown bagged lunches from home in the park together (this is a good one to do with work friends).

• Start a Spending Fast Group Challenge. How much can you each save? This can be set up on a percentage basis (similar to how The Biggest Loser TV show does it since they all start at different weights).

• Get a thrift store tennis racquet and go to the public tennis court and hit some balls. Even if you have no idea how to play tennis it's fun to run around and whack the balls.

• Do a clothing swap. Everyone rounds up all of their un-used and un-wanted items and trades. Everyone gets something new to them.

• Game night at one of your houses.  

• Check out movies from the library and gather up at someone's house to watch. Variations on this classic saving money option is to theme it out. Horror/scary themed movies. 80's movies. Nicholas Cage movies... Bonus: home popped popcorn is super cheap.

• Get together and make crafts using supplies you all collectively already own. Who can bring what and what can you make? 

• Jazz in the park. Sit around on a blanket and listen to music. Maybe your city offers something like this if not identical to this. 

• Group bike ride. Everyone takes turns mapping out a route. 

• Hike

• Volunteer together

• Start a book club. Check out the same book from the library.

• First Friday Art Walk. In Denver the main Art Walk drag is on Santa Fe but there are approximately 6 different zones in town that participate. Kind of nuts/great.

• Free Movies in the Park 

• Go to your favorite book store and look at gossip magazines together. Bring tea bags from home and get cups of hot water from the coffee shop. Sip and look. 

• Team up with a bud and be getting-out-of-debt supporters for each other. Bonus: you'll have someone to split appetizers with and cheer you along.

• Google "free things to do in (insert your city here)". There are probably a lot of things going on that you don't know about.

• Have a potluck. Just don't buy anything new for the ingredients. Only use what you all already have in your kitchen. If you can only make a peanut butter and jelly sandwich make a couple and cut them in 4's. There you go- finger foods! And really, who doesn't love PB&J? Variation (suggested by a reader): Breakfast potluck!

• Do a group yard-sale

• Go to the public pool

• Do a picture Scavenger Hunt. Make lists and separate into smaller groups. The 1st group to take pictures of everything on the list wins bragging rights. Most people have cell phones with a cameras on them but if no one has a digital camera then do the honor system and take a mental snapsnot of the item.

• Camp!

• Hit up a Pecha Kucha night

• Pull an HGTV and re-arrange a room in each others houses

• Go to the city pound and look at the animals. Bonus: get to play with the animals too if the staff allows it.

• Sit on a patio and ask each other questions you've never asked before. Favorite memory? First kiss? Greatest regret? Biggest surprise in life? Favorite movies and why? Most embarrassing moment? Best trip and why? Best gift ever received? Happiest time in life? Here are some I found online: 1.) Why is Elmo red? 2.) Fav YouTube celeb? 3.) Would you want a whole army cloned to look like you? 4.) How many times do you look in the mirror a day? 5.) Would you rather be really fat or really skinny? 6.) Internet dating Yay or Nay? 7.) What do you want to name your children? 8.) Your house is on fire, 2 things you save (non-living).... 9.) If you had to do an extreme sport for a living, what sport would you do? Also, there are lots of conversational games like "Would You Rather". The list is endless...

Are there any things you do with your friends that doesn't cost much or that is completely free? What do you think about the role that money plays in relationships and what role does it play?

Update on June 27, 2011 by Anna Newell Jones

Last night after I wrote this post my mind kept churning with other ideas for friends to do together.

They are:

• Do a homemade DIY spa day/night with your girlfriends. Do masks, foot soaks, fresh toe and finger polish.

• This is taking it back retro-style but how about getting together for an Ice Cream Social? Everyone chips in for one ingredient for the sundaes to keep the cost burden off of one person.

• Roller skating. Bowling. Lot's of establishments offer specials for their non-busy (usually during the week) nights.

• Denver has this great event called The Narrators. It's so creative and a very unique idea.

• Open Mic nights. You get to see a free show. Usually there are a couple of gems of talent in the bunch. It's fun to see the variety of skill level and what people come up with. 

• Local fashion shows

• An old-fashioned sleep-over. Round everyone up, dig out the sleeping bags. Play Truth or Dare. Pull out the Oujia board (if you're into that) and get spooked on the cheap.