It doesn’t matter where your “tight income” comes from. It matters what you do with it.
Monroe on a Budget was launched with the intention to discuss financial matters of interest to the median-income / middle class bracket. I expanded my target audience to what I call the “food stamp bracket” once I realized lower income people also were using the Internet to look up information about family finances.
And since only a few online journalists and bloggers discuss the practicalities of life on a food stamp budget, the most popular discussions, and searches that land, on Monroe on a Budget are those that are meant for that demographic.
Here’s an example: One of the search strings that arrived to my blog yesterday was this:
frugal living on soc. security dec. 2012?
So, let’s talk about that.
People in very tight finances tend to think their circumstances are unique or out of the ordinary as compared to what everyone else seems to be dealing with.
But there’s a common thread in all these stories, and it is in figuring out how to survive on the money and resources that can be directed into the home. The reason I say both “money and resources” is that lower-income families might find it much easier to access programs and services that take care of specific needs rather than add actual income to the cash flow.
The point is: it really doesn’t matter where your “tight income” comes from. It matters what you do with it.
Here are some points I want to make for the “food stamp bracket” readers:
Follow up on every resource you are eligible for.
If you’d like to get an idea of the current income brackets for specific programs, look up a chart I compiled this fall for a newspaper column.
But the directions for which your family might find a financial break have nothing to do with income. Many opportunities that have been available to southeast Michigan families in recent years are aimed at special demographics, or are only a matter of signing up in a timely manner. I explain this in my Do you need assistance? sidebar.
Where do you learn about programs and resources meant for families in need?
If you are one of my southeast Michigan readers, check my assistance program archives for discussions and announcements, and go to Julie’s List for a database that includes ongoing programs. If you live elsewhere, start by calling the 211 hotline that is provided by the United Way in many communities and get referrals to services in your area.
You also want to attend community expos that are known as Project Connect or Project Homeless Connect. They have been held once or twice a year in Monroe, Mich., in recent years, and also take place elsewhere across the country. The idea is to have representatives from multiple agencies at one event so potential clients can seek out help.
Depending on family demographics, I also recommend the following events for my local readers: Celebrate Children festival in April, College Night in November and the numerous health and senior expos that take place throughout the year.
Bottom line: If you honestly meet the criteria for a resource, program or service that can save your family money, sign up, participate and use it.
Do you have a realistic budget to begin with?
The next challenge is in determining whether your household expenses actually make sense with household income.
Many personal finance experts recommend creating a detailed budget on a month-to-month or week-to-week basis. I know that can take an annoying amount of time, and here’s why: a lot of low-income people have fluctuating income streams for reasons that include off and on work, or waiting for clients to settle accounts.
If you are not up to an ongoing budgeting task, then be sure to at least track expenses and review your finances in detail at least once a year or when income dramatically changes. You need to understand the trends and when it’s time to make different lifestyle decisions. Even a median-income family in Monroe, Mich., would have a hard time juggling two car payments, as I’ve shown in my sample budget project.
The Crown Budget-O-Meter is a quick way to review family finances, as it focuses only on specific household expenses.
The Crown Spending Plan and Irregular Payments Budget Calculator are applicable when you are ready to analyze and plan out where all of your money goes.
Follow up on money-saving hacks that make sense.
The challenge is not in cutting back on expenses. It’s in in finding the choices that result in a reduction of actual money spent, without family members screaming in frustration about doing without favorite activities, foods or conveniences or exploding the budget in other directions.
And that list will be different from one family to the next.
The point I’ll bring up is: a few frugal hacks can really make a difference and ease up the financial pressures a bit.
I have a huge collection of money-saving tips in my Downsized Budget series. Look through those lists, as my goal was to post ideas that go beyond the cliches and explain what could work and why. They include “cash up front” discounts, alternative work schedules for working parents, and how to leverage Christmas and birthday gifts to get items your family will need or want.