In the face of the current financial downfall, many Americans find themselves swapped in dept. Our wild, willy nilly grasshopper days have left us on the footsteps of failure. Many of us are stricken with Student loans or strapped by high credit rates. While this fate may have been forced upon us by the powers that be, our first action is to step forward and take responsibility for our actions. We are the only ones who can save ourselves and, if we can’t save ourselves, who else could we ever hope too?
In our Online Civics class, we have learned how to get a job. We know the process takes drive and determination. There are a bunch of competitors in the field and we have to be quicker than the rest. We have also learned about the tax taken out of our check, about how it is our patriotic duty to pay taxes and where that money goes. But what about the rest of the money? Where should it go? To the bartender or dancer with the pretty eyes?
For many years, voices of the subculture have called for our fellow man to cut back their spending. Even Henry Rollins has advocated the act of living below your means. But what does below your means, actually mean? And what luxuries will you have to give up? While the thought of living below your means can usher fear and fill your mind with rebellious thoughts from your gluttonous ego, a logical and analytical review of your monthly budget can lead to better stress freer life.
Assess Your Expenditures:
For a solid week, keep a detailed list of all your purchases. Everything and anything you spend money on put on your list. You don’t have to get all technical and build a database or spreadsheet. Use a sheet of white lined paper or paper with no lines at all, it’s all up to you.
At the end of the week, tally up your list and stand in shock and awe, as the list will make you feel like Geroge W. looking at a Hallibutron Invoice. There are bound to be a couple things you can live without. Sure, now that you think about about, who wants to spend 70 bucks on coffee and newspapers every month?
Assess your Income
Last week, you took a detailed list of all your expenditures. Right now, you know how much it cost for you to live in a week of your life, letting yourself be free. Now you want to figure out how much you make in a week. While many pros will tell you to use your pre-tax total, I say go with the money you get each week. You probably have a drawer filed with your old check stubbs. Take them out and come up with an average monthly income.
The Formula
Take the total amount of cash from each check, added together, and divide the product by the number of checks you added. The total is your weekly income. Take your weekly income and multiply it by 4. The total is your monthly income. Some months have 5 weeks but, if your don’t count on it, the 5th check becomes like a bonus.
Determine Your Basic Need
Physically, man needs shelter, air, water, and food to live. If you live in a cold climate or are not inclined to be a nudist, then you might want to add clothing to the list as well. Air is the best thing on the list as it is free and will not cost you anything, unless you are at an oxygen bar. But if you’re a patron of an oxygen bar than why are you trying to budget in the first place?
Air is free but the rest of the list could cost you money. While you might be able to escape to the wilderness and set up a tent, most of us choose to live in society and opt not to look like Gentle Ben. To live in society, we have to pay things like rent and utilities. In fact, let’s make another list and mark it “Basic Needs”.
Our “Basic Needs” list will be a compilation of our expenditure list, crossed with our new way of thinking about budget. We know how much we have to spend and we know what we like to spend it on. Our “Basic Needs” list is our first stab at trimming the fat from our wallets. On one side of the list write the name of the expense and on the other write the total cost.
My own list includes items like rent, electricity, Cell phone, internet, domain hosting (Made2Own), cable, tobacco, food, and clothing. Your list should be highly personal and catered to yourself. This is your life and you have to work at the job, you have to put up with all the bullshit. Don’t jump in with both feet seeking to hack away the fun of your life or your new plan is never going to work.
Make a Budget
Now we have the total amount of your monthly income and we have a list of your basic needs, the things you can’t live without. With any luck, the total cost of your basic needs will be 60 percent of your total earnings.
The Formula
To find out what percent of your total income is eaten by your basic needs, take the total from your “Basic Needs” list and divide it by your total income. Move the decimal point over two spaces and you have the percent. If you are over 100 percent then you divided the numbers wrong or need to get a second job, STAT.
Make a livable Budget
Now you have the numbers, if your basic needs are under 60%. Pat yourself on the back because this is about to get easy for you. However, if you are like me, then your number falls slightly higher than 60%. To get my number down to a level I could handle, I took a cold hard look at my list.
Tobacco was the easiest to spot. Sure you want me to say I quit. Well no dice, but I did take a logical look at my habit and came to a compromise. I had smoked a full flavor name brand and, here in California, the price of its cartons can run up to and over 50 dollar. 50 dollars a week is a bit more than I am willing to spend on such a wasteful habit that is not cannabis. While seeking an alternative, I found “American Spirit” in a tin can. With each can of tobacco I get 200 papers and a weeks worth of chemical and additive free tobacco for about 30 dollars. From one change in my “Basic Needs” I dropped 80 dollars from my monthly total.
Another way I dropped my “Basic Needs” cost was to get rid of cable in my home. I was paying in the upwards of 70 bucks a month on cable. I am a cable junkie but the 70 dollar eye soar stared up at me from the list. I dropped cable and picked up NetFlix. My monthly home entertainment cost dropped by another 50 dollars.
Now my “Basic Needs” cost is 130 dollar lighter and I didn’t lose any luxuries. In fact, both choices are better. I don’t spend nearly as much time in front of the boobtube as I once did, but I have kept a way to keep current with Pop Culture and, with the help of “Adventures in D.I.Y: Digital Television Antenna”, I get to keep access to my local channels for News, network prime time, and all the telemundo I can handle. The tobacco I smoke is cheaper than before and an healthier alternative, when compared to common brand label cigarettes.
Another way to work down your “Basic Needs” list is to limit your vehicle usage. Opt for public transportation or get rid of your car all together. I chose to give up my car as I live and work in the same area. While I go to school, Los Angeles offers monthly buss tickets to students for like 40 dollars, which beats the hell out of a monthly car and insurance payment.
Another idea maybe to get your car to work for you. If you live in a mostly urban, apartment laden area, there is a good chance there is a high percent of shoppers who do not own vehicles. How do they get their groceries home? If you know you work from 9 in the morning to 5 at night, why not post a sign up at your local shopping mart on the bulletin board that looks like this?
“Need Some Help Home with your Groceries? Call “Your number”. Drivers live locally and operate on a for tip basis. Hours from 6pm to 8 pm weeknight and weekend days. While service is free, drivers are in demand. References available. Call for an appointment Today.”
Economist have proved time and time again that when your business plan relies on the goodness of people, you will get a positive cash flow. However, we also include the line “ While service is free, drivers are in demand.” to attach a worth to your time. You as the driver are not only providing a kick ass service but can opt your customers base by their prior tip history. Let morals be your guide but don’t let anyone take advantage. If you have a sweet old lady who tips really well and old bat who gives you quarters, then let the bat pay for a cab.
And what ever you do, don’t let the references you give be dope headed friends, you are looking for solid people who will say nice things about you over the phone. Remember in “How to Get a Job: Apply”, our employment reference was the kind old lady who we shoveled snow for? We can use her here too. Now you are really glad you suffered through the back breaking work.
Then again, find a way and a budget you can work with. Use 60% as a guideline or earmark to reach. But with 60% spent on your basic needs, do you get to play with the remaining 40%? Well there are no right or wrong answers. Legally it is your money, go out and spend it any way you want, but like in the story of the Ant and the Grasshopper, you want to be the Ant not the Grasshopper.
One way you might spend the remaining 40% is by placing 20% into your savings to grow a nest egg to fall back on. Then split the remaining 20% in half and spend 10% on charity and 10% on fun. Leave the religious connection behind and remember charity enriches your world. You don’t have to give to soup kitchens or homeless shelters. They are good places but what about the other places in your life?
When we give to charity, we join a bigger world of philanthropy. Batman was a philanthropist and the Wayne family erected a subway rail to move Gothamites around Gotham. How can you use your 10% to enrich your world? NPR and PBS are great ways as they educate the masses. Or how about your favorite internet site? As it may seem like a self plea, there are many independent internet sources on the web who give their free time to educate and entertain, why not help them keep them going by donating a small bit towards site registration and hosting?
Whichever way you do it, take the last 10% and blow it on fun. This is your pat on the back for sticking to your guns and growing well deserved coinage in your pocket. Go see a independent movie, a live music show, or buy a CD from your favorite band. For the months when you have 5 pay periods, try and put this money aside. If you live by your budget, the 5th pay period will be like bonus cash but we are going to call it “Hobby Cash” and here on American NonFiction we like to turn our Hobbies into money making ventures. But we’ll get to that later. For now put aside your “Hobby Cash” and, next time, we will roll the dice on some money markets.
Bonus Binary
Maslow’s Hierarchy of Needs
WHAT TO DO NOW?