Poverty is an unpleasant word. It indicates a poor person, and there are many in this economic environment of hard working individuals losing their jobs. Poverty does not have to mean the end of the world. Even people who make very little money can manage their debt to income ratio and come out even if not just a little ahead.
There are benefits to having less income. One is that you become astutely aware of the things you already possess. If you are still able to pay your bills each month then you have not yet reached poverty in its most severe form.
First thing that one needs to do in order to manage their income -vs- outflow is to have paper and pen handy, all adults who are responsible for paying them, and a calm demeanor. Avoid any distractions because these will cause stress. Write down income, if money comes in once a week, then write a four week block for your budget template. After you know how much money you will be earning or receiving then it is time to write down all expenses. This will include any bills, gasoline and food costs, and any allowances for clothing or other extraneous expenses. Of course it is difficult to have a flat rate for utilities but generally those who pay the bills have a good idea of how much they are going to be paying.
Now that you have everything on paper, you can determine which bills can be paid during each pay cycle. Only put the debts that you can pay in each column. If you go over a little in one week, move the debts around to make everything come out in the green. Don't forget to put a little savings into your budget, too!
Many debtors, like utility companies, will work with you to change your due date to ensure that you do not get hit with late fees. They are not in business to make your life uncomfortable, and most understand the economics of today's society. If you have a mortgage, contact the holder of your account and ask them how you can have a re-evaluation of your circumstances. Like utility companies, they are willing to help you to make your payments. They do not want to foreclose on properties.
Actions You can Take:
Pay off all your credit cards as quickly as you can and lock them up in a box. Do not use them unless your credit card company fines you for not using the card. New legislation prohibits banks from imposing fees for non-use of a credit card. This will make leaving the credit card alone a more positive choice.
Cell phone companies and other elective utilities, like internet and satellite television also cost a lot of money. Evaluate your plans, and see if there is a less expensive alternative. For example, if each person in the household has their own cell phone plan, consider integrating them into a family plan. This can save a hundred dollars or more. The same with satellite and internet companies. Shopping around may enlighten you, and you may find that your service is improved because you are a new customer.
Purchases need to be added to the budget. If you have to replace shoes every six months, or if you have growing children then these expenses need to be taken into consideration. Don't buy anything unless you know your bills are paid and you won't need the money in the future. There are always reasons for big spending, so plan ahead for Christmas, Easter, and birthdays.
Living Above Poverty:
ï»¿It is not impossible to carefully utilize a little less money. Many people lost good paying jobs and are making it with half their regular income. It takes a little time, patience, and an entire household of understanding to make ends meet, but you don't have to consider a lower income as a lower status. Poverty is sometimes just a state of mind, and not a financial situation.