[A] reader e-mails to ask for advice. I've condensed her query as follows:
I'm stuck with an unemployed partner and teenage kids who can't earn their own living. We haven't been able to afford reserve supplies for an emergency, yet it's clear that even harder times are on the way. I want to build up reserves for my family to help cope with them, so I'm selling a bunch of our stuff at garage sales and through Craigslist. By mid-November I hope to have $2,000 to spend. What's the best way for me to use that money?A bit of background: she lives with her husband and two kids, a boy of 15 and a girl of 17, in a small suburban home in a Missouri city. The local crime situation wasn't bad until recently, but it's getting worse as economic hard times bite deeper. The family owns one older car free and clear - they sold a second, newer vehicle when they couldn't afford the monthly payments. The mortgage on their home runs about $650 per month, which isn't too bad if both of them are earning, but for the past year her husband hasn't been able to find work. Her income isn't enough to cover all the bills.
I've been stewing this one over in my brain since I read it, and I'm still refining it, but here's what I've come up with so far:
- She needs to make sure her financial house is in order. Eliminate as much debt as possible, starting with the credit cards. Nuke the extras. Cable? Gone. Internet? Shop around. Maybe gone. Cell phones? Kill the contracts, get prepaid basic phones from Walmart. (We have cable internet, no television service, and two iPhones on a shared plan. Total cost is over $200/mo.)
- The kids? Need jobs. Bagging groceries, flipping burgers, shoveling manure, I don't care. At 17 the daughter needs to be included in family finance discussions, and hopefully understands that she can contribute. The 15 year old? Maybe he doesn't get the big picture, but a simple, "Your school clothes are coming from Salvation Army and Walmart, anything else is on you," might be a heck of a motivator. Husband needs a job too, unless he is physically unable to work - in which case he should be on OASDI income. If he can work, there is no dishonor in digging ditches.
- I don't know what their monthly bills are, but it's time to turn the AC temp up in the summer and the heat temp down in the winter. 65-67F is fine. Add a sweatshirt and wool socks. Spend the $10-20 to get the window shrink-wrap kits as heating season approaches. Have the furnace tuned up if it hasn't been done in the last two years.
Those things alone might put a heck of a buffer in the monthly balance sheet. After that's done, we can look at the $2,000 in question and how best to use it. A lot of the comments are saying "rice and beans" ... and that's not bad advice, albeit boring and gassy. Side note: a 20-pound bag of rice will perfectly fill one dozen quart mason jars.
The woman asking the question is worried about financial hardship, not the prepper-wet-dream "TEOTWAWKI" where we all break out the colanders and gyrocopters. It's time to look not at long-term-storage preps, but daily-use stuff... so here goes.
1) Start buying "cheap" toilet paper, in bulk. ScotTissue in the 24- or 36-roll packs, 1,000 sheets per roll ... it's not as soft as Charmin' but it's a whole lot cheaper. Watch for a sale or coupons and buy two.
2) Switch as much as you can to generics/store brand. E.g., don't buy Tylenol, buy Equate (Walmart house brand) acetaminophen.
3) Buy canned goods and put them in rotation. Again, store brand. Wait for sales. Shop Aldi's. Cut down on meat and add bulk with the aforementioned rice. (Dinner tonight in our house was one chicken breast, diced and sauteed with garlic, then a jar of pasta sauce added. Simmered and served over pasta with a basic lettuce-tomato salad on the side.) Learn to cook with concentrate soups - cream of ____ makes great casseroles when mixed with some pasta, tuna, frozen vegetables, etc.
4) Cut the extras. Smoke? Start working on quitting. Drink? Cut back or quit completely. Coffee? Stop hitting Dunkin' and start brewing store-brand at home in a Melitta cone.
5) Buy meat in bulk and repackage in portions. Look for sales (the "used meat" cooler, or the ten-pound tubes of ground beef) and shop carefully.
6) Eating out/ordering in/carryout is a thing of the past.
7) Don't try to live monastically immediately. The fastest way to fail is to "splurge just this once" ... and again ... and again... (Don't ask how I know this...)
8) As you buy things for the usual rotation, buy an extra. If the shopping list (and always use a list for shopping on a budget!) calls for three cans of corn this week, change it to four and accommodate that in the budget. This is where the vast majority of that $2,000 mentioned should go.
9) Make sure ALL the routine maintenance is done on the existing car (and all household appliances). Nothing can blow a budget faster than a dead vehicle. Fluids changed on schedule, brakes inspected, tires pressured and rotated, etc. Accidents can still happen, but preventive maintenance will help.
10) Stay healthy. I know it's hard to prevent some things, but getting flu shots, a balanced diet, adequate sleep and hydration, etc; will all keep medical bills down.
11) Look in to food banks/pantries. Many don't ask about income; they assume you are being honest about needing food. There is no shame in taking help that is offered when it's needed.
A lot of the comments at BRM's post touched on home defense, including "go buy a X". I'm hoping that the woman writing has it covered already, but if not ... a suitable home defense gun and ammo could easily crush a quarter (or more) of the money she hopes to have set aside. I'm not entirely sure that's practical.
All that said ... BRM, if you can please put your reader in touch with me, being we're in the same state and all ... I'd be happy to see if I can help some. Resume polishing for the husband, I dunno ... I'm an email away.