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How to Survive Being Broke

July 20, 2020 By MelissaB Leave a Comment

Many of us have been broke.  It’s not a fun place to be.  You may feel depressed and desperate, but recognizing that you won’t always be in this position is imperative.  There are steps you can take to live a more comfortable life financially.  Until then, here’s a primer on how to survive being broke.

How to Survive Being Broke

How to Survive Being Broke

If you’re broke, you must take care of your immediate needs first.

Short Term Action to Take

Maintain a Positive Attitude

Many people who are broke become depressed.  They don’t see any way out of their situation and can’t imagine a future where they’ll be in a better position.

To successfully beat being broke, you need a positive attitude.  Research stories of people who were broke and went on to become successful and much more comfortable financially such as Erin Brockovich (played by Julia Roberts in the movie Erin Brockovich) or Chris Gardner (played by Will Smith in the movie, The Pursuit of Happyness).

Remember that life can change quickly.  You may be broke now, but you likely won’t be in the same position in five years or even two years.

Live on Beans & Rice

How to Survive Being Broke
Photo by Paul Hanaoka on Unsplash

The next step is to trim your expenses as much as possible.  Since food is often the largest monthly expense behind rent, that’s the best place to start.  You may love to eat salmon and steak, but now is not the time to do so.  Now is the time to eat the proverbial beans and rice.  For instance, when my mom and dad were first married and broke, my mom would buy one pork chop, pound it flat, and then split it between the two of them.  Once they had two kids, she would buy two pork chops and pound them flat to make four servings.  Now is the time to stretch your food as much as possible and buy the least expensive food you can.

Choose Your Friends Carefully

What financial position are your friends in?  You’ll want to find friends who are mindful of their money and not spendthrifts.  When my husband and I were first married, we were broke.

Some of my coworkers invited us to go with them out to eat.  The other two couples were both financially comfortable, and they chose a Mexican restaurant.  To my dismay, there were no prices on the menu.  We ended up spending too much that night, even though we tried to make frugal choices.  It was just an expensive restaurant.  We couldn’t go out with my coworkers again because we couldn’t afford their lifestyle.

If you try to maintain friends who are in a better financial position than you, you may never become financially comfortable.

Entertain at Home

How to Survive Being Broke
Photo by Johanna Dahlberg on Unsplash

Just because you’re broke, you don’t have to give up your social life.  Instead, change the way that you socialize.  Instead of going to a bar or restaurant and spending a lot of money, invite friends to your home.  Have a potluck at your house or have a game night.  Once a month my parents used to have their friends over in the summer for a volleyball night.  Be creative.  You’ll find there are plenty of ways to socialize without spending a lot of money.

Find a Hobby That Pays

Sometimes when people are broke, they have a lot of time, but not much money.  If that’s your circumstance, find a hobby that pays.  For instance, my uncle started a small side business for athletes at his former high school.  He would comb through micro fiche to find all of the articles for a particular year about the high school football team.  He’d print these out and bind them all together and sell them to the athletes.  He made some money on the side, and the former athletes had a scrap book of all the old newspaper clippings from their glory days.

Other ideas might include gardening, crafting and selling the product on Etsy, doing genealogy research for someone, building web sites for others, etc.  You’re only limited by your imagination in what you can do.

Long Term

When you’re broke, you may immediately think just of the short-term, but you must also think of the long-term.  How will you get out of this situation so you’re not broke your entire life?

There are several important steps you should take.

Earn a Degree

Photo by Juan Ramos on Unsplash

If a degree would help you secure a better job, than look into taking college classes.  When you’re already broke, you may feel like you have you have no time or money to do so.  However, if you don’t take steps to improve your situation, you’ll remain broke for much of your life.

I had a friend, Becca, who was raising her niece and nephew.  Money was tight, but she prioritized her education.  She took one or two classes a semester, putting in much of her study time early in the morning or at night when the kids were asleep.  It took her many years to get her degree, but she did.  Now, she lives a comfortable, middle class life and has a professional job.

Learn about Finance

If you don’t already have a solid background on personal finance, now is the time to learn.  This doesn’t have to cost any money.  You can borrow books from the library, take free finance classes online, and read blogs.  Learn all you can about managing money.  I’m not just talking about ways to save money, but ways to build your emergency fund and invest so you don’t end up broke again once you get out of your current situation.

Final Thoughts

How to survive being broke is a challenge for many people.  However, the first step is a mental one.  Realize that you’re currently broke, but you won’t be broke for the rest of your life.  You can make both short-term and long-term changes to improve your life and vastly improve your financial situation.  Many, many other people have done so.  Learn about those people and take concrete action to improve your current situation.

Filed Under: budget, Debt Reduction, Married Money Tagged With: beating broke, budget, education, tight budget

4 Side Hustles for Teachers

April 15, 2019 By MelissaB Leave a Comment

If you’re currently a teacher, you likely know that while this occupation can be rewarding, it doesn’t pay very well.  You may be looking to supplement your income in the evenings or the weekend.

If you’re a former teacher who is now staying home with your kids, you may be looking for a way to bring in money utilizing your teaching skills.  However, you’ll need flexibility so that you can do your work when your children are sleeping at night or napping.

Luckily, there are plenty of ways to earn a side gig with your skills as a teacher.

Private Tutor

Teacher Hustles
Make Money as a Teacher

One of my friends worked at Nielsen, became a high school math teacher, and then stayed home when she had children.  For the last 10 years, she has been a private math tutor.  She gets her clients from referrals from her former colleagues and through word of mouth thanks to satisfied customers.  She makes several hundred dollars a month and enjoys being able to still teach even though she is no longer working full-time.

VIPKID Tutor

If you have a bachelor’s degree, you can get apply for a job at VIPKID teaching children in China how to speak English.  Most of the available tutoring hours are very early in the morning or late in the evening when your kids are likely already in bed.  You can set your own schedule and decide how many hours you want to work each week.

Depending on your experience, VIPKID may pay up to $22 per hour.

Curriculum Developer

Many former teachers make a nice income developing curriculum and selling it on Teachers Pay Teachers.  Other teachers are always looking for quality curriculum material and homeschoolers also take advantage of the site.

Online Teacher for Gifted Students

A number of prestigious colleges such as Johns Hopkins, Duke, and Northwestern offer online classes for gifted children.  You can teach here, and the schedule offers flexibility as you can decide what semesters to teach and what classes to teach.  You’ll be able to challenge gifted students, and you’ll have students who will likely challenge you, too.

If you don’t want to work with gifted students, you can also look at the many online schools available for K-12 students.  You can teach from home, and you may have to have a live course or tutoring once a week.  My kids were enrolled in an online school this year, and every time they had a tutoring session or interacted with their teachers, the teachers always worked from home, which provides a great deal of flexibility.

If you’re a teacher looking for extra income, you can see that there are a variety of ways to do that, and this list isn’t exhaustive. Here’s another list of ways to make extra money that’s not focused on teachers, but could certainly apply to teachers.  If you’re a teacher who opted to stay home with kids, there are many ways you can work from home using your skills and keeping current so you’ll be able to reenter the teaching workforce should you decide to in the future.

If you’re a teacher or were a teacher, have you found ways to turn your skills into a side gig or part-time income stream?  If so, what do you do?

Filed Under: Education Tagged With: education, extra income, income, income streams, money, side hustle, side income, teacher, teaching

What Happens if you Default on a Student Loan

November 23, 2018 By Thomas Bawdy Leave a Comment

This post in collaboration with Paul Brian.

Believe it or not, student loans are one of the most secured loans a lender can issue. In the vast majority of cases, student loans cannot be discharged under bankruptcy protection, nor can they be negotiated away under a debt settlement program. If you have one, you will satisfy the terms, there’s simply no escaping it.

Here’s what happens if you default on a student loan.

First, What Constitutes Default?

The exact conditions of a default vary a bit from lender to lender, but in the case of Federally backed student loans, nine months of missed payments will get your student loan classified as being in default. It could also be found to be in default if you violate some other aspect of the loan agreement, or got the loan under fraudulent circumstances. Although, defaulting can be avoided or delayed when you refinance student loans to have reduced interest rates.

If any of the above happens, you’ll experience the following.

1. Forfeiture of All Loan Benefits

The loan will become due and payable immediately—including interest payments and late fees (if any). You will not qualify for loan forgiveness, deferment or forbearance. If you decide to go back to school and have a loan in default, you can forget about all forms of financial aid.

2. Assignment to a Collection Agency

Get ready for incessant phone calls, text messages and emails. These people have an uncanny knack for knowing the most inopportune moment to contact you and hound you mercilessly (while staying well within legal bounds) until you agree to a plan to repay the loan and stick to it. You can also be taken to court in extreme situations.

3. A Negative Entry on Your Credit Report

The default will be reported to the credit agencies, which will pull down your credit score significantly. A huge part of your credit score (35 percent) is loan payment history. A default on your record will pretty much wipe that category out. This will make it difficult for you to get a mortgage, rent an apartment, buy a car, get insurance and in some cases, even get a job.

4. Wage Garnishment

If your lender takes you to court and gets a judgment against you, the court will order your wages garnished until the amount of the loan (as well as fees and interest) is paid. This will mean an embarrassing situation at work and a large portion of your income will go straight to paying off the loan—before you ever see it.

Avoiding Default

If you’re concerned you might be about miss payments, contact your lender at once and try to work out some sort of an arrangement to help you stay on track. If you have a Federal loan, you might qualify for forbearance or a deferment of up to six months to help you get your finances back in order. If you’re still in good standing, you might be able to renegotiate the loan to lower your payments. The key is catching things as early as possible so you have the best options.

Getting Out of Default

The good news is default status isn’t the end of the world. All they really want is the money. Find a way to repay them in full and the default will be dismissed. Yes, it will take a while for your credit score to recover, but getting it marked “paid in full” will help.

Of course, if your student loan is in trouble, odds are many of your other debts are too. This is when you might consider hiring a debt relief firm.While these companies don’t deal with federal student loans, they could help settle your credit card, personal loan, and medical debt, which could make it easier to repay the student loan. As you explore this option, take some time to research information such as these Freedom Debt Relief reviews to make sure you choose a good company.

In conclusion, student loans might be some of the biggest loans you take on in your life. But unlike other loans, once they are taken out, payment is inescapable. Do everything you can to avoid defaulting on your student loans.

Filed Under: Credit Score, loans, Student Loans Tagged With: borrowing, education, Student Loans

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