Money matters

It can be said that the working poor is those who work full-time jobs, at times even two jobs, making $29,000 or less struggling to make ends meet. In the past this group was referred to as the “Lower middle class”, but as of 2016, according to CNN Money, it has become known as the poor. The median salary for the Home Health Aides and Certified Nurse”s Assistants that take care of your ailing parents and grandparents in their final years of life fall between $21,000 and $25,000 respectively. This places them squarely in the same category as those who didn’t go to school to receive this specialized training…poor.

Child Care Assistants help care for your child when they’re too young for kindergarten. They aid your child in learning valuable building blocks for later success in school, while only making  $21,000 on average. This is the same for the average line cook who makes your food at the little mom and pop restaurants and cafeterias where you like to eat……..also poor. Several fields that used to be honest, respectable work have become a life of financial struggle for those who choose to occupy these positions.

Walking the budget tightrope

When you are struggling to make ends meet, it’s inevitable that at some point in time, if not multiple times, you will definitely miss the mark and fall short. Especially since, in many companies, these very same jobs don’t offer sick days or paid time off. Lord forbid if you get really sick and have to miss a few days of work, on top of already robbing Peter to pay Paul. Those few days can sometimes be the difference between making it through that month, and your entire budget spiraling out of control before crashing and burning.

When the tightrope breaks

A major hit to your budget and next thing you know you come home to your house in complete darkness or go to turn on the faucet and nothing comes out. Maybe you wake up to the sound of your car being repossessed from the driveway, or you go to cook dinner and realize there’s no gas coming out of your stove top. If you are disciplined enough, there are a few things you can do to either avoid these times altogether or at the very least, weather them in a way that disrupts your life the least.

Avoid The Situation Altogether

As a family with two of the above-mentioned incomes, it places you into the “Middle Class” and you can easily get along better than some. As a single person, the above-mentioned salaries can go a long way if you live modestly and budget properly. For those reasons, this post will be more geared toward families. As a parent, your children are your dependents, and if you have more than one it means you are seeing at least $5,000 every year at tax time. I know when you get that check it’s tempting to square up everything you feel you couldn’t do throughout the year. New wardrobes for everyone, maybe new furniture, a bit of frivolous spending “Because you’ve earned it.” etc.

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Start thinking differently

Set yourself up for the incoming year with your refund. $200-$300 past due on your gas, electric, or water bills? Pay off the bills in their entirety, which should cost you roughly $900 give or take. If paying off the bills don’t require the full $900, use the surplus to throw a little extra on them to give you a bit of a cushion throughout the year. If you continue to pay the new charges every month, there will remain extra there for when you hit a financial snag. This leaves you with $4,100.

Continuing to pre-plan your year

If you live in an area where you definitely need a car, then to heck with a car note; find a decent used car lot and buy a car outright. Voluntarily surrendering that car you have with the note (If it hasn’t already been repossessed) will leave you with one less bill. If you can snag something dependable for $2,000 try to make that your target price (What you can pay for a cheap but reliable used car can vary drastically based on where you live). If you can’t score something decent for $2,000, then it will become your down payment on a car with greatly reduced monthly payments; provided you spend no more than $3,000 to $5,000. That leaves us with $2,100.

Even pre-plan with the insurance you buy

Shop around for a decent full coverage auto policy. Both Geico and Progressive are good, but if you can find something cheaper do it. Why full coverage with the higher premium? Because if you or someone else wrecks or steals your car through the year, you can’t afford to fix it or replace it. If it’s your only means of transportation, you now have no income. With full coverage, you will at least get enough to pay off that last little bit you owe on the car and have some leftover for another down payment on another car. Full coverage also comes with free roadside assistance which keeps you from having to pay a tow truck $75 on the spot if your car breaks down.

A policy with either Progressive or Geico should cost you approximately $700 for 6 months, pay that in full. That’s another bill you won’t have to worry about for at least 6 months. What you will do each month, is put the money you WOULD be paying for insurance to the side, because you’ll need it in 6 months. The good thing about this, if you have to skip a month of putting it aside because something unexpected came up, you have time to make it up and put it back. Once your initial 6 months is up, repeat the process so that your car insurance is never really an issue again. Leaves us with $1,400.

Start rebuilding your credit

If you don’t already have a credit card, get a secured credit card. Capital One offers a pretty good one with a low $200 minimum opening balance. Deposit $400 onto the card. This becomes your emergency fund. Keep this card with you, but try your absolute best to never have to use it. This will come in handy if you need an emergency part of your car, or something similar. Simply having this credit line available to you will add a few points to your credit score. Also with Capital One, after a little time, you can increase the amount of credit to more than your original investment. With that increase will gain a few more points on your credit score. That leaves you with $1,000 left to spend.

Get the kids out of the way

Use the last $1,000 of your return money to pay for big-ticket activities your kids may participate in throughout the school year that you usually can’t afford. Like that $300 registration fee for your son to play football, those $200 dance classes for your baby girl, and the $300 baseball registration fee for your middle kid. Can’t pay any of those fees right now, put that money into a savings account and DON’T TOUCH IT until it’s time to pay for the fees and ONLY the fees. Doing things in this manner will free up money throughout the year, and also helps better prepare you in case of emergencies.

Now that you’ve freed up your regular paycheck a bit

With some of your newly freed up money, get a membership to Six Flags or some other theme park for you and the kids. I pay $40 per month for me and 4 children which means that even if I don’t have the money to do anything else, we can go to Six Flags AND their sister park White Water all year long. It’s already covered by a monthly automatic debit that you’ve already set up and forgotten about. All you need to get up and go is gas in your car and packed lunches or you may opt for a meal plan that allows you to pay a one time fee to eat in the park all season long. That is money well spent, and it will relieve a lot of financial stress. If you have anything left over, spend it on a cheap vacation for yourself, like one of those affordable cruises offered by one of the many travel agencies out there.

If you get to a point where no matter how much you’ve planned and prepared you still find yourself in serious financial trouble, THIS article could help you weather that storm in a much less stressful way.

With a little discipline and proper planning, you can avoid times of extreme financial hardship altogether, or at the very least, weather them in a way that disrupts your life the least. No matter what happens, keep on moving toward your goals of increased financial security with purpose, and things will get better.