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Getting Out of the Permabroke Mode

Black Belt Shopper (featured column)
by Larry Wiener

Being broke is tough, but a few simple steps can start the recovery process and give hope.
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You’re in the more month than money mode. You just ran out of soap four days before payday. You only have $41 in your checking account and $11 in your wallet. You go to the store and see that soap is 59 cents for one bar and $1.29 for three bars, an obvious savings. You know that the three bar pack is a better deal, but you really aren’t sure if you can afford the three pack, so you buy the single bar.

The next day you see that the three bar pack is on sale for $1.09 for three days, even more savings. You don’t dare buy any more soap because now you only have $32 in your checking account and $9 in your wallet.

Such is the life of the chronically broke. Not only do those with no money live with high anxiety, but they pay more for many purchases than others do because they don’t have the cash flow to make use of timing of purchases, buying in bulk, and other money-saving practices.

One department store chain that caters to lower-income customers, for example, does not put out winter coats until the first snowstorm of the season because they know the chronically broke won’t buy a winter coat before they need it no matter how much they may be able to save by making their purchases off season.

Maybe you’ve recently lost your job or suffered another type of setback. Maybe you’ve taken on too much debt or other financial encumbrances.

If you find that you are constantly in the more month than money mode, you have come to the right spot. At BetterBudgeting, you will find tips to save on purchases, large and small. Some of them you may be able to use right away while others may have to wait until better times.

Here are a few quick starter techniques you can use right now to save money on everyday purchases:

Use Coupons

If you don’t use grocery coupons, start now. In most places, you can find them in the Sunday supplement of the newspaper. Even if you can’t buy ahead, you can save a family of four an average of $15 a week ($60 a month).

Look for Dollar Stores 

If you live near a dollar store (Dollar Tree, 99 Cent Only Store, etc.), you may find some great bargains on groceries, health and beauty items, cleaning items, and the like. I find, for example, the dandruff shampoo I use goes for 99 cents at a dollar store while it costs about $3 for a similarly sized package and the supermarket. Be careful to not get carried away and buy a lot of merchandise you don’t need.

Save Energy

Try to do with less heating or cooling. Turn off lights. Your local utility may be able to give you an energy audit and may even give you discounts if your income is low enough.

Get Advice from Local Bargain Hunters 

Besides the general advise you get from resources like epinions, local people can help you know how to use what you learn in your local environment. Here in Los Angeles, for example, two grocery chains double coupons and often put items on sale just as coupons for that item come out in the local newspaper. These stores, however, have much higher regular prices than other chains. Local bargain hunters have this information and many are more than happy to share. Look among your neighbors, coworkers, and other contacts for local information.

Consider Professional Help 

You may need the assistance of a knowledgeable person to go over your budget with you. Consumer Credit Counseling Services is very helpful. Your local community college or city hall may be another source of referrals. Be careful, however, of the for-profit debt consolidation services. Some are good, but many of them provide little help and charge high fees.

Use Your Saved Money to Start a Reserve 

If you are able to save, say, $20 a week with these tips, keep this money for a reserve. Doesn’t sound like a lot, but having a little extra cash around at the end of the month will allow you to buy mayonnaise when it is on sale rather than having to pay full price. Many budget-conscious people like to use envelopes to keep the money they save out of their wallets. Many supermarkets print the amount that you save on the receipt. Put that amount in your envelope for month-end and you’ll do yourself a favor. If you don’t need that money at month-end, consider putting it into reserve for emergencies.

Avoid the Temptation to Solve Your Problem with Credit Cards 

When you are in the more month than money mode, it is easy to use credit cards and other forms of borrowing to “solve” your problems. This almost always leads to increased indebtedness and delays recovery once you start getting on your feet. Instead, look for more ways to tighten your budget even if it hurts a little.

Don’t Suffer Alone 

Isolation can increase depression. Try to get out and socialize in ways that don't cost money. Maybe you can even organize a potluck dinner among your friends from time to time. Attend free concerts and events. Go to free or low-cost museums.

Start Planning for Better Times 

Hopefully your bad times are not permanent. As you develop new financial habits, you will begin to see them pay off. The good news–and I can tell you this from experience–is that once you start saving because you have to, when better times come, you will apply the habits and disciplines you develop during your hard times and they will serve you well during good times. As you learn to save on ketchup by timing your purchases, later you will apply those principles to items you want and not only items you need.

Being broke is tough, but taking a few small steps to save money can be the first steps toward gaining financial freedom. Save all you can. Learn all you can about better budgeting techniques. Get help if you need it.

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Copyright © 2001 by Larry Wiener. All rights reserved.

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