The following guest post is from Trent Hamm of The Simple Dollar.
I’ve been a fan of Frugal Dad for quite a while. This site offers a tremendous amount of specific and smart advice on how to reduce your spending and get a strong financial foothold. It’s advice that everyone can use and apply to their lives.
Sometimes, though, it just isn’t enough.
I have a friend named Max that I’ve known since I was a little boy playing in the sandbox. Max is a single father with two children – his partner basically left him holding the bag. He only has a high school education, and he made several poor choices after high school (drug use, mostly) that left him with a poor local reputation, a poor credit history, and a small criminal record.
Since those days, Max has cleaned himself up, taken responsibility for his two girls as a single father, and found them a comfortable place to live. But, given his past, he doesn’t have many opportunities for individual achievement – many people balk when they see his record and don’t bother to give him a second chance. He currently works at a minimum wage job in a paper factory, taking every overtime hour he can get, and also mows lawns when he can. Even after working physical labor sixty hours a week, he still comes home and tries to be a good parent to his daughters, one of which has a learning disability.
To put it simply, when you add up the cost of transportation to and from work (a fifteen minute commute each way), housing, the food needed for him and his family, clothing, and a few little things for his daughters, Max doesn’t have any money left over at the end of the day. He does everything he can to scrimp and save – he shops for groceries at Aldi, buys most of his clothes and his kid’s clothes at yard sales, and doesn’t even have cable or a cell phone.
But, sometimes, it just isn’t enough. He’s come very close to having his power turned off – the power company doesn’t tolerate him being late even a day on his bill because of his poor credit history and personal record. When his car breaks down, there’s no emergency fund he can tap.
For Max, frugality has been stretched to the limit, and it’s just barely enough to keep his mouth above water.
As bad as the situation sounds, though, it’s not hopeless for Max. He’s trying several things right now that may help him escape the precariousness of his situation. Here are seven tactics that he’s using – and that anyone in a similar situation can use to help themselves.
Repair and strengthen relationships with family and friends Your family and friends are the best people to turn to in a pinch – but many people in a pinch, instead of reaching out to those around them, tend to withdraw, ashamed of the troubles they’re having. Don’t. Everyone has difficult times in their lives, and it’s those people around you who will help you through those situations, no questions asked. As Max repairs his relationships with family and friends, they reach out to him, offering to help him watch his kids as he mows yards and so on, in order to help him get his feet firmly on the ground.
Build relationships with community leaders It seems somewhat cliche to say, but small business owners and community leaders are often the people who will be the first to reach out to others that are clearly trying to better themselves, taking a chance on those who are obviously working hard and committed to their families. Max looks for opportunities to do this through his business (lawn care) and through community events – he’ll be the first to show up and try to help out with community activities and so on. This has already paid off – one individual has helped him out by giving him a good place to live with extremely low rent. He has hopes that another may be able to offer him a solid job in the future.
Get involved in community groups, such as churches, clubs, and volunteer boards So how do you get started building these relationships with people in the community? You can start by going to places where people congregate for positive purposes – churches, civic organizations, or community volunteer groups. Join a local church, start attending services, listen to the overall message (and don’t get bogged down in the specifics), and meet people who are involved. Go to some community activities. Whenever you hear about an opportunity to volunteer, jump on board when you can. You’ll meet people who will provide you with help, support, and opportunities all the time if you’re willing to put your time and effort out there to help others. If you want to turn your ship around, this is the way to fill your free time.
Start your own initiatives for earning money Look for ways to earn money on the side. Do you have any particular talents that can be put to work on your own, like fixing computers? Even if you don’t, you can still start up a simple initiative, like low-cost lawn care for people nearby. Filling your spare time with flexible work like this not only puts more money in your pocket, but gives you something you control, one where you’re not necessarily judged by the mistakes of your path, but by the quality of work you can produce now.
Realize that, if you have strikes against you, you will have to work extra hard to win people over This is simply a fact of life. Many mistakes in life can’t be undone, and they often follow you wherever you go. Instead of beating yourself over the head with them, feeling guilty and descending into self-pity and blaming others, just realize that it’s still up to you whether or not you succeed, but that you’ll just have to work extra hard to get ahead. Look at your past mistake as a challenge to live up to, not an excuse to give up.
When great short-term opportunities come along, take advantage of them – and don’t squander the proceeds Sometimes, life hands us opportunities: a job offer, a ridiculous deal, a quick task that can earn some quick money, an inheritance, or a gift. Don’t let these opportunities slip by – jump on board every one that you can get. Then, when it’s over, don’t just blow your windfall in celebration – feel proud, but put that money to work for you in an emergency fund or in paying off debt. The fun comes in not worrying as much about that big debt load or about what happens the next time the car breaks down – your celebration should culminate in lasting peace of mind.
Don’t let go of your frugality if things start to turn around If you’re persistent and keep scrapping to get ahead without giving up, eventually you will start to break through a bit. That’s not the time to let go of your frugal habits – don’t breathe a sigh of relief and go buy an iPhone. Instead, keep your diligence and start building up a healthy surplus. Pay off all your debts. Build up an emergency fund. Start saving for your long term future (retirement, college for your kids, and so on). Once those are taken care of, then you can look at some personally enjoyable options, but even when that happens, never forget that it was frugality that helped make this path possible for you.