Sunday, August 10, 2014

This is a Long One But I've Got a Few Things to Say

I spent a few hours this morning at a relatives house helping them write a budget. They've really been struggling to pay the bills. I went out on a limb and offered to help them go over numbers. They've never operated with a budget before. They don't know where their money goes each month, or each week even. They don't have a check book registrar that they balance. They don't have any sort of computer software that they plug numbers into. As I found out this morning they don't even know "about" how much the electric bill, or the phone bill, or this or that bill is each month.

I'm NOT judging them. I'm fully aware that more people than not operate this exact same way. You get paid. You spend the money. You hope to pay the bills along the way. Period. I almost expect people to operate that way. It's so common. I was impressed that they jumped at my offer to help them draw up a budget and get their bills caught up. On the plus side they don't have any debt, a small student loan but otherwise they're in SOOOO much better shape than my husband and I have ever been. On that note I want to say that it probably helps a lot of people out to not have very good credit or even bad credit early in life. If you can't get a credit card it's considerably more easy to stay out of debt. I commend them for that! Oh, I could only wish...

I started with the number one goal in budgeting: spend every single penny on paper before the month begins. All of your money should have a goal; all of your dollars should have a name before you ever see them. I actually went over there knowing "how" I was going to help; I was going to give them basic budgeting principles and draw up a budget with them. Can I tell you, for the past few days, as I've been getting ready to go over there I've been second guessing myself, thinking," surely they must know all these things. surely I can be of no help by just telling them about budgeting. Hm, I wonder if there's something else that I'm not thinking of that they're really expecting me to help with." Not like asking for money. I knew that wasn't the case at all. But I was still trying to figure out some other thing that might be more knowledgeable than "simply" how to budget.

I had drawn up an outline before hand. They were so scared going into this "meeting." They had hit that hopeless point in the financial journey where there are so many shut off notices and late fees and past due letters that they didn't know if they could ever get out of it. I knew they were in better shape than they did simply because they have no debt (okay, I'm not counting their mortgage in that debtless declaration either).
I sat down with them and had them start filling in the blanks:
Projected monthly income for August
Mortgage payment
Phone bill
Electric bill
ect:

They sat there so impressed with my outline. Okay, there was fear on their faces too, like "oh my word, is there going to be a giant negative number at the end of this page?" We filled in the numbers and I kind of had to giggle when I told them, "see, you're really not as bad off as you thought." We got all their bills caught up by October. Nothing will be shut off (well except the internet and cable that were already disconnected... shoot and the garbage service (also already shut off)). We budgeted in a decent amount to grocery money, yes they are living on a set grocery budget now. I think they were both a tiny bit excited about the challenge of budgeting the groceries on considerably less money than they are used to for this month. After we were done they both seemed, I don't know, empowered. Like they're now in control of their money for the first time in their lives. We budgeted in back to school expenses for the kids, a hair cut for one of them, birthday presents for relatives. I tried to get every single expense out of them that they could think of.

We also drew up a weekly budget for the rest of August. "Now this is WHEN you're going to spend your money and $355 from 'this' check needs to be saved for your mortgage payment during 'that' week." They were thoroughly impressed. I'm going to go back at the end of the month to budget out each week in September with them and revise the September monthly budget that we drew up depending on how they do this month. I don't anticipate going back again after that. In truth I'm really impressed with them for accepting my help. They made me laugh when they said they really needed to pay me for my financial services. All I did was tell them how to budget. hehe :-) They seemed like an enormous weight had been lifted from them when I left there today. I'm very proud of them!

The whole ordeal got me thinking though, how many people lose their houses because they just don't ever budget their money? For real! How many people go about it the normal way: get paid, spend money, maybe pay the bills?!?! You can only get so far in the negative and then there's this enormous monster living on top of you and one day everything just caves. You lose the house. We call the monster poverty. But for real, how often is the monster just foolishness; just poor planning (or no planning)? We are living in a crazy world! Even look at the government of my country. All these wealthy beyond belief bureaucrats truly believe they can just spend any amount of "government" money, who cares if it's not actually there to spend and "one day it'll all balance out." IT DOESN'T"T WORK THAT WAY PEOPLE!

Frustrated.

12 comments:

  1. Maybe they need to write down what they spend their money on each day. A coke here, coffee there, just a burger and just this once can cause them to never make it. Plus, if you ask nicely, you can get late fees waived maybe one a year. I use online banking to look at my account so I never go over, okay, almost never. Then, I can balance my account and see if I am going to be overdrawn if I keep it up. Sometimes, I have found I will be overdrawn because of checks out and can put money in to halt the landslide. I suspect they piddle their money away instead of paying debts first. Good for you for helping them.

    I had a girlfriend with a crummy job. One day, she was crying because she had no money. I told her I could help her. She knew I had no money to lend. I told her to take back a bunch of junk that was "so cute," like the decorated cardboard boxes she kept stuff in and under her bed. She wailed about her things she needed to store. I reminded her of plain cardboard. She eventually "got it."

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    1. They've committed to keeping all of their receipts and taking out cash to spend for their grocery budget each week. I will be going over there to help out at least once more. They don't do online banking but they also don't have a home computer and I'm pretty sure they have regular cell phones, not smart phones. They are on the right track. They just never really knew what to do before (and never really thought to figure it out).

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  2. What a fantastic & kind thing you did. Other than your time, it was free to share your expertise with your family & what a tremendous gift it is. When people ask (and, only then), I do my best to share advice on finances or fitness (my other love) & try to give practical advice & small steps for success. It makes me feel really good to help out. I think I would have loved to be a life coach! Maybe one day. ;-)

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    1. Thank-you! It was interesting timing on my end of the deal. I just decided about a month ago while brainstorming ways to teach my son to be kind and giving I wanted to start doing something, one nice thing for someone each week. My plan was to brainstorm "free" (like you said other than the time it takes which is valuable so that's the biggest part of the gesture for me) things I could do for people that would be really nice for them. Last week I did a mini photo shoot for a friend (with very low income) with her 7 month old daughter. It was free for me to do (digital) and although it took a good bit of time on my behalf she is SOOO blessed by having good quality photos of her baby girl (in a field of wild flowers... the shoot turned out great).

      And then for this week my relative was just telling me how worried she was about the money situation and I offered to help (not knowing if she would be interested at all). So that was my kind thing this week. It was so great. I didn't even have to look for or think of something nice to do and it was so beneficial for them.

      I did bring the kiddo along with me to both "kind" events :) and I talked to him about how we were helping people out and how happy it made them. I kind of jump the gun on everything for him but what can I say. haha

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  3. So impressed, and so proud of you!

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  4. Way to go! there are so many people that have no clue about money. And most of the time they are tohard headed to listen to any advice

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    1. Thanks. I was really proud of them for accepting help. It does take a certain kind of person to admit they've made a mess and need some direction. I think they are going to do great (with some ups and downs I'm sure) from here on out.

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  5. I hear you! I feel for your relatives- we used to live like that and at one point I just felt like everything was out of control. It got to a point where we had to spend time and sit down and work it all out on paper and then implement our written plan into our lives. Budgeting allows you to have control and it helps you stay on top of things so much better than just winging it from paycheck to paycheck. I am a planner so I like to see ahead of me and know what to expect. Knowing where you stand financially and adjusting your lifestyle to match your income is important- and it helps keep the stress down a bit more too.
    Great job helping them, by the way! That was so nice of you and I am sure they realize how blessed they are to have you to give them a hand. You may have just changed their whole lives! High Five to you, my friend! :)

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    1. Thank-you so much. Amen to every word you wrote. I used to live like that too. I know where they're coming from and exactly how they feel. I'm happy for them because they have so much littler of a mess than I did when I realized the walls of my world were collapsing in on me. They're going to do well. I know it!

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  6. Awareness is always the first step, so it's good that, after this meeting, they are now aware of how much stuff costs, how much they are spending, and how much they need to be saving! :) Most of my clients in our legal aid clinic are Medicaid, Food Stamps, WIC, Welfare, Cash Assistance, SSI, Disability, etc. recipients, and yes it frustrates me to death! I'm ok with these programs as safety nets, but my clients are lifers on these programs; it makes me very sad for the future of our country.

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    1. I'm with you. I know quite a lot of people who don't use those programs as safety nets but rather they abuse them like crazy and are lifers. It's very sad. It makes me crazy!

      I'm really happy that these particular relatives of mine aren't just throwing in the towel and calling themselves poor. They are really going to try at this. Plus once they get the bills caught up, if they can follow a budget (and it really won't be too strict at all... less strict than mine) they will be A-okay!

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