And I’m talking about a real emergency here.
A situation where you have to make some hard choices.
Like choosing whether to:
- Put the heating on or buy food;
- Have a haircut or replace your worn out socks;
- Take the bus or have your clothes washed.
This is the kind of emergency I’m talking about.
Are you thinking that you’ll never be in this position?
Are you feeling smug about having a secure job?
Get off it. If life has taught me one thing, it is that it can serve us anything at any time. This includes job loss, overwhelming debt, currency devaluation that wipes out your savings or a fire that leaves you homeless.
Anyone can find themselves in a situation where they have to make hard choices. I did: five years ago when we realised how much debt we had, my darkest money fear was that my son won’t have enough to eat. Now that we’ve paid off all our consumer debt, I live my life with no fear.
Unfounded as it may be in my case, this is reality for many families in the UK; after all, close to 4 million children in the UK, this is more than one in four children in one of the wealthier countries, live in poverty. It’s even worse: close to two thirds – three of every four – children who live in poverty are in families where at least one parent is working?
Think again and think carefully: flipping from comfort to a situation where you really have no money at all is as easy as your next breath; and can be almost as fast.
And if somebody is thinking that these people’s problem is that they didn’t have an ‘emergency’ fund, don’t even bother saying because you’ll be just running your mouth.
They probably don’t have an emergency fund, but they probably never had sufficient income to build one. Material poverty is so exhausting that it can easily become poverty of the soul – ingenuity is not really an option.
When I was at university I had no money at all. But I was young and my solutions were the ones that tie you up for the day or week: when you are young you have the rest of your life to figure out a better way.
When I had no money at all, I did one of four things:
- Went to a mineral fountain to drink hot water so my stomach stops screaming for food;
- Borrowed a bit of money from my close friends;
- Pawned my typewriter (yes, we are talking so far back that type writers were in fashion); or
- Phoned my Dad and asked for money (he never said ‘no’).
But most of the people reading this blog are beyond being that young.
Here is what is to be done when you have no money at all. These points come from experience, discussion and research (presented in no particular order).
#1. Make sure there is food for three-four weeks in the house
In my experience, you should deal with the worst and most basic fears first. Being worried all the time where the next meal is going to come from is exhausting and doesn’t leave space for tackling much else.
So, make sure that you have food for up to four weeks in the house.
This has to be mainly stuff that keeps: beans, lentils, rice, tinned food, flour, sugar and dried milk.
If you have a freezer (and your electricity is still on) you can make a lot of vegetable soup and freeze it.
“Where am I going to get all this when I have no money at all?” – you may be thinking.
You are asking the wrong question. The one to ask is: ‘How am I going to make sure there is enough food in the house?’.
This is how you do it:
- You have make an inventory of all the food you already have; and mean all of it – even the dry crusts at the bottom of your breadbin.
- You can visit a food bank. You’ll need to be referred by a number of agencies can refer you (check here how to do it). Also, you’ll do well to check whether there are informal foodbanks run in your area; I know that some people have started self-organising for mutual support and help in crisis.
- You can borrow money to buy food (it’s important to borrow responsibly and keep at the back of your mind that you need to returns it).
- You can call for help at a support forum; people on the MoneySavingExpert.com are generally supportive and generous. You can also find advice there on how to feed a family well on very little money.
Once you have made sure that you have food for four weeks in the house, you can exhale and tackle the rest.
#2. Make sure your home is safe for two-three months
If you own your home, but the bank owns most of it because you have a mortgage, you can get in touch with your mortgage provider and ask for a ‘mortgage payment holiday’. Check this guide to learn how to do it in the UK. In brief, though, you should explain your circumstances to your lender and ask do stop paying your mortgage for several month or to reduce the payments. I know people who’ve done it, so this works.
If you are renting, the situation may be a bit trickier. Still, it may be worth it to talk to your landlord, explain the situation and ask for a grace period with the rent.
Remember you need two-three months so that you could sort it all out.
#3. Face your bills and be very honest with yourself
There are bills that you could stop paying for some time but it is not a trivial matter. Yes, ask for help and advice on this one.
#4. Stop non-priority debt repayment
Non-priority debts are the ones that won’t get you in prison if you stop paying them and you won’t lose your house.
These are: credit cards, un-secured loans, payday loans etc.
Not paying these can be very inconvenient and even damaging in the long run: it is inconvenient because you’ll have to brace yourself against a barrage of phone calls and threats. It is damaging in the long run because failure to make payment can damage your credit score.
Still, there is time to worry about all that and it’s not when you have to choose between eating and keeping clean.
#5. Learn about and take advantage of emergency schemes
There are variety of schemes that are supposed to cater for people in financial crisis.
You can ask about these when you visit a Job Centre. Alternatively you can check the complete list of benefits that may be available to you here.
There are local welfare assistance schemes which you can check here.
There are budgeting loans (for information look here).
#6. Ask family and friends for help
There is a rule of personal finance that says ‘never lend money to family’.
I think it is rubbish. If we don’t help family and friends in emergency our humanity, not our wellbeing is under threat.
In fact, you don’t need to ask for help; you can barter. If you wish to learn more about how you can weather down a financial emergency by finding reprieve with family you may wish to have a look at this.
#7. Make sure you look presentable
You know, I believe that when you have no money at all, it is time for a haircut and a wardrobe tidy up.
Many will see this as wasteful: after all you are in crisis. You have to choose between spending on your vary basic needs like food, warmth and shelter.
But if you don’t look presentable, your chances of getting out of this situation are very slim.
So, listen to me and look in the mirror. Have a very hard look and ask yourself whether you’ll trust the person you see with a job.
If your answer is ‘no’, it’s time for some changes. What these are you can decide on your own.
I can only say that when someone rings on my door and asks to wash the car or do the garden, I’m more likely to hire the person who looks presentable and smells clean rather than someone who looks like they’ve just fallen out and rubbish skip.
#8. Sell everything that doesn’t move for ten minutes
And if this happens to be your grandmother, so be it.
Okay, guys, I’m joking but there is a serious point in all this.
Please look around you and make a list of thing to sell. It doesn’t matter whether you really don’t want to part with something: if you haven’t used it in the last couple of months you need to shift it.
You’ll be surprised what people would buy. If you want to get an idea go to eBay and have a look around.
Then start doing it.
#9. You need to have some cash
In the first instance you’ll need to borrow it (very likely) but you need to have some cash. Spend it wisely because this is your capital. Use it to get around when looking for a job and paying for small items you may need.
#10. What are your skills?
The only way the get out of the hole in which you’ve found yourself is by making some money.
Get a piece of paper and a pen and make a list what the things you can do. Don’t skip over the basic stuff: you can clean, you can wash cars, you can work in a bar and you can deliver kebabs.
Make a short list of the three skills that you can use to make some money. Here is a list of jobs that can bring you enough money to fill your fridge for a month.
Once you have come up with some ideas, you should act on these.
#11. Get out there and ask
There is no two ways about it: you need work. When in crisis, you don’t need a career and you don’t even need a job – all you need is to get some work for which people pay you.
Assuming you’ve already done what I said under point #10 you have targets.
Now, you should get out there and ask. If you want to work in a bar, go around all bars in your area. If you are going to do some gardening (because you are good at it), drive or take the bus to a wealthier neighbourhood or one where there are elderly people living. Ring the doorbell and ask whether they’d like you to do the garden.
You may be surprised how much work you can pick up this way.
Doing this, you’ll have to be nice and keep you sense of humour.
Someone I know was telling me that he started in the UK by delivering kebabs. When he looked for a job he went to all shops in the little town he lived and asked for a job.
Eventually, he got to a kebab shop where the owner asked his name; the name was difficult so the owner asked whether he can call him ‘Thomas’. This guy’s answer was priceless (and I suspect it got him the job).
‘You can call me Susan, if you wish; just give me a job.’
He got the job and worked there for several months. He also made a good friend: the shop owner and my acquaintance still have a drink from time to time and laugh when they remember.
#12 Under-promise and over-deliver
You need all the work you could get. You also need to keep the work you get and get referrals if you are to make a living and get out of the situation you’ve found yourself in.
This is best achieved by under-promising and over-delivering. This way you employers will be impressed and you’ll get the reputation of someone who is a self-starter and can be trusted to do a good job.
I’m not going to lie to you: when faced with a financial crisis many people fail.
Some fail because they don’t know where to start. In this post, I offered a roadmap for financial recovery. I told you what you need to do so that you buy yourself some time to focus on earning; I also offered some ideas how to approach the matter of earning and making a living.
Others fail because they focus on the wrong thing. You see, people get so captured by being embarrassed by the situation they’ve found themselves in that they have no energy left to try to dig themselves out of it.
What I’ll say is, it doesn’t matter. Anyone can find himself (herself) in a tight spot. As with many things in life what matters is not where you are but where you want to be. What matters is not that the sh*t has hit the fan but what you do next.
Good like on your way to recovery.