Posts tagged budget
By Daisy Luther
How to Survive a Personal Economic Collapse
With all that is being written about the national economic collapse, people seem to be waiting for some huge event.
However, for many North Americans, the collapse is here. This isn’t relegated to only lower income neighborhoods. As an article from a Cinncinnati new station stated, “Hunger doesn’t know a zipcode.”
For many people who were formerly financially comfortable, the economic collapse has already happened, in the form of a job loss, hours that have been cut back due to Obamacare requirements for employers, an exorbitant medical bill or other crushing debt, or simply an inflation rate that has outstripped your pay increases. Despite all of the warnings, many people are still going to be absolutely blindsided.
For many families, personal finances have reached a catastrophic level – they are left to make terrible choices:
- Which utility can I live without?
- Should I walk away from my mortgage?
- Should I eat something so I can work harder or should I skip meals so my kids have food?
- Should I use the grocery money to take my child to the doctor or should I wait and hope he/she improves without medical intervention?
- Do I risk the IRS-enforced penalties by forgoing enrollment in Obamacare or should I skip that whole grocery shopping thing so I can pay the monthly premiums and enormous deductibles in order to stay in the government’s good graces?
These are the kind of decisions that people across the nation are grappling with every day.
I’m talking about good people, hardworking men and women who have always been employed and paid their bills. A personal financial crisis does not just strike those stereotypical “welfare queens” with the long manicured nails, Gucci knock-off purse, and a grocery cart full of EBT-funded lobster.
I’m talking about the person next door, who seems to have it all together. I’m talking about that quiet family that sits two rows in front of you at church. I’m talking about that two-income family with two children and a car in the driveway that takes them to work and school 5 days a week. I’m talking about people just like you and me.
What is a personal economic collapse?
A personal economic collapse is a little different than the major crises you see all over Europe right now, where huge segments of the population can’t feed their children or stay employed. It is a crisis that just hits your family due to a given set of circumstances. (In actuality North Americans are on the brink of the kind of collapse that is occurring in Europe, but because of easy access to credit and a buy-now, pay-later society, many of us still have the appearance of prosperity.)
Here are some signs that you may be in the midst of a personal economic collapse:
- You can only afford to pay the minimum payment on most of your bills.
- The same dollar amount you used to spend on groceries doesn’t buy enough food to feed your family for the week.
- You can’t afford to go to the doctor when you’re sick.
- You are taking dangerous steps to “stretch” needed medications because you can’t afford the prescriptions.
- Your utility bills are past due and your power is in danger of being cut off.
- You skip meals in order to save money or to have enough food for your kids.
- You’ve lost your job or had your hours cut.
- You have lost property due to foreclosure or repossession (such as your home or your vehicle).
Surviving the crisis
Times are tough but you can survive this.
1.) First you have to see exactly where you are.
It’s time for a brutally honest assessment of your finances. If you use your debit card or credit card for most expenditures, you’ll easily be able to see what you’re spending and bringing in.
Print off your bank account statements for the past 2 months. On a piece of paper, track where your money is going. List the following
- Car payments
- Vehicle operating expenses (fuel, repairs)
- Credit card and other debt payments
- Telephone/Cell phone
- Extracurricular activities for the kids
- Extracurricular activities for the adults
- Dining out
- School expenses
- Recreational spending
- Miscellaneous (anything that doesn’t fall into the above categories gets it’s own category or goes here)
Don’t say to yourself, “Well, I usually don’t spend $400 on clothing so that isn’t realistic.” If you spent it, then it’s realistic. You are averaging together two months, which should account for those less common expenses. Brutal honesty isn’t fun, but it’s vital for this exercise.
So….what do you see when you look at your piece of paper with your average monthly expenditures for the past two months? Are there any surprises? Did you actually realize how much you’ve been spending? Most of us will immediately see places that we can trim the budget. Those $1-$5 purchases can really add up. Reining them in may just allow you to take care of an important need that you thought you could not meet.
It can’t continue like this. The economy will not withstand it. Step one is to see where you can cut things out right now from the above expenditures. Can you reduce your grocery bill? Slash meals out? Budget more carefully for gift-giving and school clothes?
2.) Rethink necessities.
If your finances are out of control, the best possible reality check is a stark look at what necessities really are. It is not necessary to life to have an iPhone, a vehicle in both stalls of your two-car garage, or for your children to all have separate bedrooms. People in Southern and Eastern Europe right now will tell you, as they scramble for food, basic over the counter medications like aspirin, and shelter, that necessities are those things essential to life:
- Food (and the ability to cook it)
- Medicine and medical supplies
- Basic hygiene supplies
- Shelter (including sanitation, lights, heat)
- Simple tools
- Defense Items
Absolutely everything above those basic necessities is a luxury.
So, by this definition, what luxuries do you have?
3.) Reduce your monthly output
Reduce your monthly payments by cutting frivolous expenses. Look at every single monthly payment that comes out of your bank account and slash relentlessly. Consider cutting the following:
- Cell phones
- Home phones
- Gym memberships
- Restaurant meals
- Unnecessary driving
- Entertainment such as trips to the movies, the skating rink, or the mall
4.) Waste not, want not.
We live in a disposable society. Food comes in throw-away containers. People replace things instead of repairing them. If you throw out more than a couple of bags of garbage each week, that’s a very good sign that you may be wasting resources.
Before throwing anything away, pause and think about how it might be able to be reused.
- Food: Many times small amounts of leftovers can be recycled into a brand new meal. Meat bones can be used to make broth or stock. Small amounts of veggies or grains can be frozen and added to a future soup or casserole. Leftovers can be frozen in meal-sized portions to take to work for a brown-bag lunch. (Learn more about repurposing leftovers HERE.)
- Clothing: Clothing that is torn or damaged can often be repaired with only rudimentary sewing skills. If it has been outgrown or cannot be repaired, often the fabric or yarn can be reused for other purposes, from cleaning rags to fashionable accessories like scarves and headbands, or home items like throw pillows, potholders or rag rugs. When all else fails, the fabric can be used for cleaning rags or patches to repair other items. Keep jars full of buttons, elastic, and other notions that can easily be removed before you throw a clothing item away or relegate it to the rag bag.
- Electronics: Obviously, initially you should attempt to repair (or have repaired) electronic items that are not working. If this is not feasible, are there components of the item that can be reused, either now or in the future? What about hardware such as screws or fasteners?
- Containers: Most food comes in a container of some sort. Before throwing the container away, consider whether or not it might be useful. Glass jars, plastic tubs, and plastic bags can often be reused to store food in your refrigerator or to contain food in brown bag lunches. Clean aluminum cans can hold all manner of items, from hardware and tools in a workshop to sewing and craft supplies. Use your imagination.
5.) Take control of your food budget.
The price of food is skyrocketing. Who hasn’t been to the grocery store recently and been shocked at the high price of that cart full of groceries or at the mysterious shrinking food packages that are the same price as yesterday’s larger ones?
- Stockpile: Create a stockpile of nutritious, healthy staples at today’s prices to enjoy when the cost goes even higher tomorrow. (Learn how to create a frugal food stockpile HERE.)
- Preserve: Learn to preserve food yourself when you come across a windfall. Pressure canning, waterbath canning, freezing, and dehydrating can allow you to take advantage of great sales or end-of-season scores.
- Eat less: This suggestion isn’t for everyone, but many of us could stand to shed a few pounds. Perhaps now would be a good time to cut back a little and shrink both your waistline and your weekly food bill. Lots of people eat for the sheer entertainment of it or out of habit. Next time you’re watching TV, grab some mending or a crossword puzzle instead of a bag of potato chips. Dish out slightly smaller servings at dinnertime to leave enough to stretch the leftovers for a brown bag meal the next day.
- Drink water: Skip the beverages and drink water instead. At less than $1 per gallon for purchased water you simply can’t beat the price. It’s better for you, also, than sugar-y drinks. If you are lucky enough to have well water or access to spring water, your drinks don’t have to cost you a penny.
- Focus on nutrition instead of convenience: Buy the best quality of food you can, and skip the processed, nutritionless convenience foods.
- Grow your own. In the summer, grow the biggest garden you can. In the winter, or if you are an apartment dweller, put some sprouts and greens in a sunny windowsill to add some fresh produce for pennies.
6.) Reduce your dependence on utilities.
Energy rates are skyrocketing. As the prices begin to rise, more and more people will be unable to pay their bills and eventually their power will be shut off. Check your bill each month and as prices increase, use less power. Try some of these ideas to reduce your reliance and drop your bills.
- Hand wash your clothing
- Hang clothes to dry
- Cook on a woodstove or outdoor grill
- Can foods to preserve them instead of relying on a large chest freezer
- Turn the heat down a few degrees and use non-grid methods to keep warm
- Use rain barrels to collect water
- Direct the gray water from your washing machines to reservoirs
- Turn off the lights and open the blinds
- Use solar lighting whenever possible
How do you intend to weather the storm?
There are bleak days ahead. Have you planned for this? What strategies do you intend to use to weather the financial crisis that is coming for all of us?
Daisy Luther is a freelance writer and editor. Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at firstname.lastname@example.org
Image credit: http://www.theorganicprepper.ca
By RPI Staff
Judge Andrew Napolitano: Congress Can Cut the NSA Budget
Judge Andrew Napolitano, an RPI Advisory Board member, explains on Fox News last week that the US Congress can restrain the National Security Agency’s mass spying by cutting the NSA’s budget. “The recourse is to persuade Congress to clip the NSA’s wings by taking some of its budget away from it—and that almost happened a few months ago, and it may happen after the first of the year,” says Napolitano.
Watch the three minutes news segment here:
Fox News interview with Judge Napolitano video capture added to original post.
McDonalds Latest Advice to its Peasant Employees: “Quit Complaining” and “Sing a Song”
Back in July, I highlighted a ridiculous and insulting campaign that McDonalds ran with Visa in which the company tried to help its impoverished employees plan a budget. The only thing the campaign did was embarrass the company by proving that you can’t survive working there.
Well the company is right back at it in time for the holidays, with several pieces of advice for its legions of serf employees through its ”McResource” website. Three of the more insulting pieces of wisdom include:
“Sing away stress: Singing along to your favorite songs can lower your blood pressure.”
“Break it up: Breaking food into pieces often results in eating less and still feeling full.”
I saved the best for last…
“Quit complaining: Stress hormone levels rise by 15% after ten minutes of complaining.”
Are you “lovin’ it” yet? Video below:
Follow Mike on Twitter.
Video capture added to Mike’s original post.
Derrick Crowe Discusses the Government Shutdown
Published by NextNewsNetwork
Gary Franchi interviews Derrick Crowe regarding the current government shutdown and the possible affects. Congress may be feuding to create the shutdown, but of course Congress members is still drawing a check.
Where does your tax dollar go? (An infographic)
Watch the “net interest” percentage going forward as interest rates rise. That’s going to put a cramp in our lifestyle.
Image credit: http://www.againstcronycapitalism.org
Lobbying Effort Keeps Flawed Drone Flying
WASHINGTON – Despite budget sequesters, weekly furloughs of civilian Defense Department employees, and the prospect of budget-imposed reductions in the number of active-duty and reserve personnel, the Pentagon has still found money to fund the underperforming Global Hawk drone system.
A report compiled by the Pentagon’s testing department in 2011 described the $223 million Global Hawk as “not operationally effective, and predicted that cancelling orders for the drone would save $2.5 billion over a period of five years. This led the manufacturer, California-based military contractor Northup Grumman, to mount a high-pressure lobbying campaign to preserve the slow, ponderous, under-performing Global Hawk.
RT News points out that the effort – which was led by three former high-ranking Republican congressional aides — included nearly a million dollars in campaign contributions to key members of Congressional committees. That campaign paid off when the 2013 Defense authorization bill included more than $260 million a year to keep the current fleet of Global Hawk drones in the air, plus another $443 to order three additional Global Hawks.
Posted by Judy Morris
Our Legacy Systems: Dysfunctional, Unreformable
There are two problems with the vast, sprawling legacy systems we’ve inherited from the past: they’re dysfunctional and cannot be fixed/reformed. The list of dysfunctional legacy systems that cannot be truly reformed is long: Social Security, with its illusory Trust Funds and unsustainable one-to-two ratio of beneficiaries to full-time workers; Medicare, 40% fraud and ineffective/needless care; the healthcare system (if you dare even call the mess a system), 40% paper shuffling and 25% defensive medicine and profiteering; weapons procurement–the system works great if you like cost overruns and programs that take decades to actually produce a weapon; higher education–costs have skyrocketed 700% while studies (Academically Adrift) have found that fully a third of all college graduates learned little of value in their four years; the financial system–now that we’ve given the Federal Reserve oversight over Too Big To Fail Bank practices, do you really think we’ll ever get rid of TBTF banks?
One place to start an investigation of any legacy system is to ask: how would we design a replacement system from scratch? The gulf between a practical, efficient replacement system and the broken legacy system is a measure of the legacy system’s dysfunction.
We all know why legacy systems cannot be reformed or replaced: each has a veritable army of constituents and vested interests. Every single person drawing a check or payment from the legacy system fears reform of any kind, as each fears that their place at the feeding trough might be threatened.
Read the rest at OfTwoMinds.com, here.
About One Week of US Military Spending Would Wipe Out World Hunger
What does it take to end world hunger? About one week of United States military spending, according to the pile of data on the subject.
As continued reports of expensive and devastating military drone strikes roll in from overseas, which have actually taken the lives of US citizens in addition to countless innocents, virtually no one is talking about the very realistic expense of literally solving world hunger. An overall expense that has been calculated to be about $30 billion per year. To put that into perspective for you, the US military spent $737 billion on ‘military defense’ in 2012, $30 billion of which is about 8 days of such an expenditure.Now I’ll be the first to admit that it is not the ‘job’ of the United States populace and government to go around saving the word in every manner, but it’s especially not the job of the nation to be policing the world through military dominance based on fabrications and laughable WMD allegations. The bloated military budget is funding things like drone strikes on innocents (to which the real figures have been scrubbed by the Air Force), the continuation of an excessive 1,000 or so military bases around the globe, and a series of new wars brought upon by political rhetoric.
But it’s not even about the military budget.
As The Borgen Project notes on their website, feeding the world actually offers benefits beyond the basic moral implications (that most corporations and politicians couldn’t care less about). Even the Los Angeles Times has written about how spending the 30 billion to annihilate the massive worldwide starvation crisis, or perhaps even a fraction of it for less, would generate business on a level that would trump virtually any form of economic ‘recovery’ that may be hiding behind the next financial meltdown scare.
We’re talking about a new revolution of individuals who were previously unable to work, let alone walk, now providing economic value to the world. Perhaps most importantly, we’re talking about a method that could solve the highly complicated immigration problem once and for all. An initiative that could ultimately save many more billions from this fact alone.
Posted by Robert Wenzel
Uncle Sam’s Growing Ownership of Student Loans
Donald Marron writes:
The federal government has been borrowing rapidly to finance recent budget deficits. But that’s not the only reason it’s gone deeper into debt. Uncle Sam also borrows to issue loans, build up cash, and make other financial investments.
Those financial activities have accounted for an important part of government borrowing in recent years. Since October 2007, the public debt has increased by $6.9 trillion. Most went to finance deficits, but about $650 billion went to expand the government’s investment portfolio, including a big jump in student loans. Before the financial crisis, Uncle Sam held less than $500 billion in cash, bonds, mortgages, and other financial instruments. Today, that portfolio has more than doubled, exceeding $1.1 trillion:
By CBC News
Venezuela’s government announced Friday that it is devaluing the country’s currency, a long-anticipated change expected to push up prices in the heavily import-reliant economy.
Officials said the fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.
The devaluation had been widely expected by analysts in recent months, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery.
It was the first devaluation to be announced by Chavez’s government since 2010, and it brought down the official value of the bolivar by 46.5 percent against the dollar. By boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help alleviate a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations.
Planning and Finance Minister Jorge Giordani said the new rate will take effect Wednesday, after a two-day banking holiday. He said the old rate would still be allowed for some transactions that already were approved by the state currency agency.
Venezuela’s government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate. Under the controls, people and businesses must apply to a government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations.
While those controls have restricted the amounts of dollars available at the official rate, an illegal black market has flourished and the value of the bolivar has recently been eroding. In black market street trading, dollars have recently been selling for more than four times the official exchange rate of 4.30 bolivars to the dollar.
The announcement came after the country’s Central Bank said annual inflation rose to 22.2 percent in January, up from 20.1 percent at the end of 2012.
The oil-exporting country, a member of OPEC, has consistently had Latin America’s highest officially acknowledged inflation rates in recent years. Spiraling prices have come amid worsening shortages of some staple foods, such as cornmeal, chicken and sugar.
Seeking to confront such shortages, the government last week announced plans to have the state oil company turn over more of its earnings in dollars to the Central Bank while reducing the amount injected into a fund used for various government programs and public works projects.
Giordani said the government had also decided to do away with a second-tier rate that has hovered around 5.30 bolivars to the dollar, through a bond market administered by the Central Bank. That rate had been granted to some businesses that hadn’t been able to obtain dollars at the official rate.
It was the fifth time that Chavez’s government has devalued the currency since establishing the currency exchange controls a decade ago in an attempt to combat capital flight.
Republished with permission