Advice for the Broke

[next_migration]

According to a survey conducted by the Board of Governors of the Federal Reserve System [2019, before the pandemic], 39% of Americans do not have enough savings to pay for an unexpected $400 expense without hardship, such as having to borrow money or failing to pay regular bills. The implication is that most Americans do not have the savings needed to move safely from one formal, legal housing situation into another, unless a new employer agrees to cover the costs. It costs far more than $400 to do that, especially long-distance, especially with a family.

 

To get a lease you usually need three months’ rent (first, last, damage deposit—and you won’t get your last damage deposit back in a hurry, if at all). If you can find an apartment or mobile home for only $500 a month, extremely cheap these days, that’s $1500 upfront. Utilities, which are usually mandatory, may require deposits. Cheaper informal rental arrangements, such as renting a room in a private house, may be hard for strangers from another state to obtain. There will be transportation costs: truck rental fees, gas, and possibly payment for someone to help you pack and unpack it. At minimum you’ll need gas for a heavily loaded car, or in the real worst-case scenario, bus fare. If you are moving without a job offer in hand (a high-risk gamble in a smaller town or depressed city!), you had better have enough additional savings to pay for at least the first month’s costs of living. All told, a few thousand dollars is the minimum most people need, if not more. The result is that many people are trapped in abusive labor markets because they aren’t paid enough to amass the needed savings to escape.

Single-room occupancy housing in larger cities used to provide many low-income workers with cheap rooms, especially suitable for single men. Unfortunately, for decades there’s been a concerted campaign to wipe it off the map in America and replace it with larger, more expensive apartments that provide nicer ambience and more profit. If you can find SRO housing or an affordable by-the-week “hotel” in a destination town you’re willing to consider, that’s a resource you might take advantage of to allow you to be housed on arrival without spending a fortune. Of course, the neighborhood and some of the clientele will not be the finest; be sure you can tolerate that.

Another solution for some, if you are eager to move but have little savings, is to ask someone in the region of interest for help. Do you have a relative or old friend in a possible destination city or town who might be willing to let you stay with them for a while? Ask, and offer sincerely to make it worth their while by helping with housework or child-minding, chipping in rent or grocery money once you get work, etc. Be sure you’re fully prepared to follow through if they agree.

I don’t suggest the fashionable “vandwelling” option because it is my impression that people who live in vans almost always spend at least several thousand dollars to buy and fix up their vans, to say nothing of gas and insurance. A person who is truly broke can’t do it, unless perhaps they have valuables that they can sell. If your plan for long-term security is to move somewhere, get a job or otherwise earn a regular living, and become a permanent part of a community, you won’t blow the money that would have fully paid for a bare-bones move on a vehicle that will give you an uncomfortable, risky, precarious life outside a permanent community. (Many police departments persecute identified nomads, and it can be hard to get work. Vandwellers seem to be most tolerated in the wide open spaces out West—exactly where you are, perhaps, trying to get away from. And people who live in vehicles are uniquely vulnerable to having their entire lives and all their belongings stolen in one go.)

If you can’t afford to move even to modest housing and have nobody who can offer you a shelter, unless you have a work/life situation that will truly never allow you to get ahead where you are, it’s wisest to stay put for now and devote yourself to amassing savings for a move. As liberal commentators have pointed out repeatedly, “it’s expensive to be poor.” If you move without enough money to rent an apartment and turn on utilities, you’ll likely be stuck in a motel. The higher costs of that housing, plus the processed food you’ll have to buy if you can’t get away with cooking in the room, will guarantee that unless your wages are quite generous, you will never save up the money to rent an apartment. At best, you’ll go on paying those gougey costs for that inferior, unhealthful lifestyle indefinitely. More likely, you’ll someday have a minor financial setback (car breakdown, week of work lost to illness) and be thrown out on the street.

Some of the families that have too little savings to move actually have middle-class incomes or at least a living wage, but their expenses are so high that every paycheck is fully spoken for. If that’s you, figure out where your money is going and cast a hard eye on each category, from food and transportation to clothes, makeup, or entertainment. If you or your family decided to tighten your belts and make sacrifices for a year to support your long-term goals, how much money could you save? Here are some money-raising options for people in this category to consider:

o  If you’re young and don’t have a lot of stuff to wrangle, do you have any relatives in your current area who might let you move in with them for a year and pay a low rent while you build your savings? You don’t want to move back in with a parent who is actually abusive to you or your partner, if any, or might start thinking your kid was theirs now. However, a parent who is just a demanding pain in the ass or constant Fox News viewer could be tolerable for a finite period if you knew you could come away with several thousand dollars in savings and be ready to move.

o  Spend a couple of weeks figuring out how much you spend per week on food and beverages (whether coffee, beer, or soda pop). With home cooking and few luxuries, you can eat nutritious food with some variety for $4 a day per person — in 2022 it might be safer to say $5, or $35 a week. See Brown (2014) for a free e-book of how-tos. How much could you save by sticking to that for a year?

o  If you have any kind of cable or satellite TV, quit that as fast as you can and stash the money. Almost every community in America has more than enough boob tube available free over the air. In a year’s time you’d have enough to pay for a month’s rent in a cheap town, if not two months.

o  Cut back on air conditioning or heating. Paul Wheaton offers a detailed online explanation of how he slashed his electric heating bill 87% (in Montana!) by dressing warmly, turning the temperature down to what would normally be painfully low, and using a few spot-heating gadgets to compensate. In winter, clever use of hot water bottles can make lower temperatures tolerable. In summer, using an electric fan or just putting a damp bandanna around your neck can make a hotter temperature tolerable.

o  You may really need a cell phone to work, but not the highest data level so you can watch streaming video. Your 10-year-old does not really need a cell phone, and you don’t really need for him or her to have one (they exist because all of their grandparents, who didn’t have cell phones in childhood, didn’t die). You certainly don’t need any paid online entertainment services, such as streaming TV.

o  If child care is crushing your budget, see if you can find a cheaper option, such as informal care from someone you trust—understanding that this is very difficult for workers who aren’t allowed advance notice of their work schedules. (Two words: Union Ize.) Might your kid be old enough to be left alone after school? If there are two or more adults in your family, read what I have to say about the domestic economy in the next chapter. Might you have more money left over each month if the lowest-paid adult quit their job?

o  Are you spending a lot of money on extracurricular activities for your children, or private lessons in music, sports, etc.? If so, does your child really love the subject or show special talent for it? If he’s grudgingly practicing the piano 20 minutes a day when you force him to, he’s not going to be the next Scott Joplin anyway; give him a break and save the money.

o  Do you use any recreational drugs, including cigarettes or vaping? I won’t tell you to quit cold turkey, but try to nudge your consumption just a little bit lower each week, every week—get a little notebook and keep track—and record and stash the savings when they start to appear.

o  Beneficial medical care is high-priority, but not all care is beneficial. Are you on any pricey pharma drugs that you might have needed at one point? Ask your doctor hard questions about whether that really means you need them forever. (Many drugs cause severely damaging or life-threatening withdrawal syndromes when stopped abruptly, so never do that without investigating what might happen to you.) Are you quick to rush your kids to the ER or urgent care for a mildly bumped head or sore throat? Has it saved their lives yet? You can ask yourself whether the next round you might be about to embark upon really seems necessary. The hospital or your insurance company, if you have one, might have a nurse hotline you can call for reassurance.

o  Same goes for complementary care. Short-term therapy like Cognitive-Behavioral Therapy can be life-changing, but if you’ve been seeing a therapist for several years and feel less happy or less emotionally competent than when you started, question the value. If you take expensive nutritional supplements for no more specific reason than a general wish to ensure continued good health, calculate how much you might save if you cut back to a grocery-store vitamin pill for a year or two.

o  Does your family have more than one car? If you’ve got more than one driver, it would certainly be an inconvenience to cut back to one car, but not always a calamity, depending upon your family circumstances. Think about whether it could be managed in a money-saving way.

o  Every $10-a-month expense you can cut is $120 in a year’s time. That might not seem like much, but if you could find five such little expenses to cut, and were able to sock away all of the savings, you’d end up ahead $600; in some places that could be a month’s rent.

o  If you have friends who refuse to do anything with you that doesn’t cost you a lot of money, this is a fine time to start distancing yourself from them. You hope to move away and leave them soon, after all, and spendthrift types aren’t likely to be worried enough about the future to follow in your footsteps.

o  If you have student loan, credit card or medical debts that you have no hope of paying off for years to come no matter what you do, consult a credit counselor. I’m no expert, but if it were me, I wouldn’t pour all my savings from economizing into reducing the loan balance a little faster at the expense of building my savings to meet an emergency need—or to move before my life was turned upside down by a regional calamity. You can ask a credit counselor whether you should declare bankruptcy—but beware, many landlords think that someone who has done so does not deserve to live under a roof for several years afterwards.

o  On the other hand, if you have small credit card debts, or other small debts at predatory interest rates, that you could rapidly pay off by tightening your belt, doing that first then stashing the money that was formerly gouged out of you every month as interest might let you accumulate more total savings in the medium term.

o  Do you recognize that you have more stuff than you need? Some of it must have at least a little resale value. Take as much as possible to shops that buy used books, video games, sporting equipment, jewelry, etc., then hold a yard or “moving” sale. Save every dime. As a bonus, the more stuff you get rid of, the less you’ll have to pay to move.

 

Unfortunately, many Americans are paid so little, and their working conditions are deliberately structured to keep them so vulnerable, that they can’t ever hope to save thousands of dollars. Entry-level women’s jobs in particular, as Barbara Ehrenreich explained, “are a trap: They pay so little that you cannot accumulate even a couple of hundred dollars to help you make the transition to a better-paying job. They typically give you no control over your work schedule, making it impossible to arrange for child care or take a second job.” And, often, they wreck your body too.

Some people who know that they really can’t get ahead where they are do move with nothing, in the hope of finding something better in a place that’s cheaper or has more jobs. They may live in their car for months if they have to, or camp out of their car. Sometimes that’s the best choice—or, for people like climate refugees, the only choice. But, as you will well know if you’re poor, it’s not easy or safe, especially if you have kids or pets.

I wouldn’t presume to advise people in such a terrible situation, except to say that it’s almost always better to have a safety net. If you have family or close friends who would make sacrifices to keep you from starving on the street, you’re better off living where they live, even if the location is a bad bet in the long run. Exploited working mothers might band together for mutual support, though many zoning codes are written to make that difficult by restricting shared housing, which keeps workers isolated and maximizes landlords’ and nurseries’ income.

If there’s no person who would go far out of their way to help you, then you’re better off in a community where there are social services that will help the needy, instead of just taking their kids away then pushing them out into the gutter. Perhaps that’s your current community, or perhaps it’s someplace else. Best of luck to you.