finances

Building a financial safety net

Anna Simple Living , ,

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When I was younger, I argued that maintaining a full-time career while what you would really like is to stay home with your children – not out of immediate necessity, but out of concern for possible future happenings such as illness, death, or divorce – is akin to living your life out in a bunker instead of being out in the fresh air and smelling the flowers.

In the meantime, I was doing something that was more like walking the tightrope without a safety net underneath. I had moved to a remote, inaccessible area without reliable transportation means, counting on my husband to always provide for our family and effectively making sure that, in the foreseeable future, I would not be able to contribute to the family income. Having no car and no driver’s license, I depended on my husband entirely for every errand and every little grocery store purchase (there being no facilities within walking distance at all).

I didn’t realize it back then, but I was setting myself up for some pretty unpleasant consequences should something go wrong.

Those who have been following my blog know what happened next: over the course of a few years, unemployment, underemployment and unwise financial choices had brought us to a full-blown crisis, while I couldn’t do much more than wring my hands and try to cope with anxiety and panic attacks. I did do some remote work, but even that was extremely difficult with patchy network access.

While I’m still a big proponent of making decisions out of love, not fear, and while I don’t regret for a second being a stay at home mom to my children (which in fact I still am), I would give my younger self one piece of sound advice:

Make sure you have a safety net. Don’t travel down a road that gives you no possibility to do a U-turn in case the you-know-what hits the fan. This doesn’t mean you are a wimp or lack faith. It’s simply common sense.

If I were to break it down into practical points, I would tell her:

1. Keep on building up your credentials even if you think you won’t be needing those. You never know.

2. Think twice (maybe more like ten times) before you move to an area where you would have extremely limited mobility and no services. Even if it’s your quintessential rural dream with rolling hills, olive groves, and herds of goats. If you purchase a house, take into consideration how easy or difficult it might be to sell it later on.

3. While role division in marriage makes perfect sense for many occasions, two heads are better than one. For a long time I used to think I’m displaying loyalty and trust towards my husband by leaving everything concerning the family finances entirely in his hands. In fact, I was doing none of us any favors. My husband was fallible, as was I. Neither of us was perfect in any regard, but it’s always so much worse when you feel pressure to do what is “right” rather than what works practically.

4. Build up your savings. That’s a tricky one with zero income, I know! But in case you come into some money, like after selling a house, stash some away right away and don’t allow it all to be frittered on stuff like food and rent (ask me how I know).

I guess it all boils down to this: don’t put yourself in a situation where you are disproportionately, entirely dependent on another person for all your basic needs. Even if that person is your spouse. Do not place yourself in a situation where you would be unable to help yourself if need be.

I have a friend whose husband, a really nice, hardworking man suffered an accident on the job and has lost his livelihood. Insurance doesn’t come up to scratch. He is undergoing a long and grueling process of physical rehabilitation. However, my friend is keeping afloat because she lives near supportive family and there’s every necessity readily available in the vicinity. The you-know-what has certainly hit the fan for them, but they had not placed themselves in a situation where they wouldn’t have the tools to cope.

I shudder to think what would have happened to me in a similar situation a couple of years ago. I would be left stranded in the boonies with a bunch of tots, unable to help my husband or my children or myself. I count myself lucky to have been able to move to a better, safer place.

Being safe doesn’t mean being a wimp. On the contrary, the wimpy choice is sticking one’s head in the sand and refusing to consider tomorrow.

5 Strategies For Surviving Extreme Poverty

Anna Simple Living ,

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Extreme poverty looks different in Western countries, but it does exist. If someone is Googling articles like this one, it means they have electricity and internet connection, and probably aren’t starving outright. Nevertheless, they may not know where they are going to live next month, how to pay for the weekly trip to the supermarket, or where to get shoes for their kids to replace those that are falling apart.

Our family has been through financial highs and lows, with extremely long periods of no regular income, but thankfully we have been able to cope by thinking out of the box and implementing some extreme measures. Hopefully, these will help other people who are struggling right now.

Housing – for many people, this is the biggest monthly expense. If you are renting, you may want to consider moving to a cheaper area and down-scaling. If you own your house, you might create a stream of passive income by renting out a room or a unit for Air B&B. Selling and purchasing a smaller house in a less expensive area is also an option. However, if at all possible, do not sell your house just to fund living expenses. I guarantee your money will get frittered away and you’ll be much worse off when all is said and done. We made this mistake once, and I still deeply regret it. Looking back, I’d rather have had us tighten our belts further for a few months.

If you are lucky enough to have supportive family, sometimes your best choice would be to move in with them. I would only recommend this as a last resort, however, because I believe in remaining independent unless there is absolutely no other choice; and, if you do move in with family, I’d constantly work towards having my own place again and, of course, make sure you are pulling your weight as much as you can by helping with chores, bills, groceries, etc.

Utilities – There are many creative ways to save on electricity, water and other bills. Make sure you make your home as energy efficient as you possibly can. This can mean drawing blinds in the summer or painting the roof white to deflect sunlight, or adding extra insulation in both summer and winter to keep cold or heat out. Check your doors and window frames; if you can feel a draft of air, it means your insulation has room for improvement.

Many people labor under the assumption that they are entitled to be toasty warm in winter while wearing nothing but a T-shirt inside, and comfortably cool in the summer up to the point of wearing a light jacket indoors. I invite you to challenge these assumptions. Wear layers in the winter, and cool off in the summer by hanging wet curtains over open windows. Save money by taking shorter showers and bathing two (or several) kids together.

Transportation – What with gas, insurance, repair and maintenance, cars are huge money guzzlers. If you live in an area with good public transportation, consider doing without a car entirely. At the very least, consolidate your errands and, for recreation, explore your area rather than drive far. Rediscover walking and bicycling as alternative healthy local transportation means.

Food – Do not feel tempted to cut your grocery bill by opting for cheap, high-calorie foods full of sugar, white flour and refined vegetable oils. Rather, learn to make the cheapest nutritious foods you can get, and reduce some more by clipping coupons and shopping wisely. You can often find real treasures in your supermarket discount bin – foodstuffs that go for an extremely low price because their expiration date is near or because their packaging is slightly damaged. Bread and baked goods are often sold extremely cheaply at the end of the day, and vegetables and fruits at the end of the week. Swapping with neighbors and foraging help out a lot, too.

Necessities – Thrift stores often carry gently used clothes, shoes, toys, books , household items, and so on, at the fraction of the regular price. Also keep a lookout for great finds people in your area are giving away. Don’t look down upon dumpster diving, either – we have salvaged some real treasures from the curb, from books and games to clothes and furniture.

Whatever you do, do not apply for direct government assistance, the kind that would get social services across your threshold. I don’t know about where you live, but here it comes with the price of being constantly monitored and probed for “parenting capability”. Children have been taken from perfectly adequate parents whose only crime was being poor. Because of budgeting allotment, this corrupt system would rather pay a monthly allowance to foster families than give the struggling parents financial aid.

Keep looking for ways out! Don’t let the present suck you in like a permanent sluggish murky bog with no prospects. This has been my mistake for a long time, just looking at nothing beyond daily survival – no matter how good you get at saving, pinching pennies and doing without, sometimes you just have to stop and think of ways to make a radical change and take a different turn. Always look forward with hope for change, and see your present strait as something that will pass.

Making money from home – revised

Anna Simple Living ,

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Re-reading my previous post on making money from home, which I wrote almost two and a half years ago, I thought some updates are in order.

Following the birth of another baby, a house move, and many frumpy days spent in a maze of boxes and/or with sick little ones, I was reaffirmed in my wish for work that could be done in the comfort of my home, with a steaming cup of tea and in pajamas, depending on no one’s schedule but my own. Moving to an area with a fast, reliable internet connection was a godsend, and I am now able to play to my strengths more than before, focusing on what I’m good at: writing, editing, proofreading and translation – all of which is a perfect fit for a work-from-home solo entrepreneur.

My holy grail is still writing and publishing my own books, both fiction and nonfiction. I will keep at it, and if I could, I would do nothing else. But it’s extremely challenging to make one’s way as an author, and when you’re starting on a little to nonexistent budget, you are prone to get stuck. So part of my other-source earnings will be funneled as an investment in my books, with the darling wish of someday being able to work on them exclusively.

For more income streams, I registered on freelancing websites such as Freelancer.com and Guru, but soon saw these places are absolutely flooded with people from developing countries who are willing to work for ridiculously low wages and swarm upon every project within minutes. Getting noticed was extremely difficult without several “pay to play” options (on Freelancer, they offer paid certification tests) which I consider greedy and unethical – since the host website receives a mediator cut from every project acquired through it, I don’t think it’s fair to try and get more money off people.

Being trilingual, I’m also registered on several crowdsourcing translation platforms such as Gengo. I’ve made some legitimate earnings through Gengo, but their pay rates are low, their work volume very unsteady, and their ratings often arbitrary, with senior translators appointed for reviewing without really understanding the nuances of the language.

I tried doing transcription through similar crowdsourcing platforms, but quickly realized that, again, the pay is extremely low (unless it’s transcription + translation), plus you need a quiet work environment to listen to audio files – with four kids at home and me working on the living room couch, trying to get everyone to be quiet enough for me to listen to audio is stress-inducing and just not worth it.

Recently I discovered Upwork and so far I am loving it. Hands down, it’s the best freelancer website I ever came across. They are committed to only accepting qualified people providing in-demand services, so not every profile gets approved, and the traffic is a lot less crowded. I had to apply three times before I was accepted. There are many tests you can take for free to prove your qualifications, and choose whether to display them on your profile or not. You can check out my profile here.

I would like to stress that my objective is not to make as much money as quickly as possible, but just enough to allow me to stay home with my family without struggling financially. It isn’t easy to find the perfect balance, and I will probably keep going back to this topic in months to come.

Rural life and financial security

Anna Simple Living , , ,

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When we were about to get married, we knew just how we want to raise a family: we would live a quiet, simple, unhurried life in some beautiful rural place, and I would stay home and raise the children, as they would come.

Ten years and 3 (soon 4!) children later, our dreams haven’t changed, but our perspectives have, with experience that allows us, in hindsight, to realize many things we have missed in the past.

We had a good headstart, financially, and we were prepared to live modestly, which had enabled us to purchase our first little home outright, without getting into debt or mortgage. This was good, but it finished off all our pre-marriage savings, and there was nothing left to do some necessary repairs, which the house badly needed, and when my husband hit a period of unemployment, we eventually had to sell the house for some immediate relief. A lot of money then got frittered away on rent.

We bought another house eventually, the one where we live today, but we then hit another stretch of unemployment, or rather, underemployment, plus a few pitfalls such as unwise investments in projects, and being ill-used by unscrupulous people. This was unfortunate, but it could happen to anyone. The problem was that we failed to take something into account, namely, that in choosing to live in a relatively distant area, we are reducing our earning capabilities, and basically eliminating the possibility to find an extra job quickly and easily if needed in lean times. Spending less is great, but sometimes you just hit that bottom when you can’t cut back anymore, and must earn extra to pull through.

Since we only have one car, I don’t drive, and public transportation in our area is almost nonexistent, we couldn’t even make a temporary switch of me taking a job and my husband staying with the kids, which was, and is, incredibly frustrating, since there were opportunities of jobs five minutes away, but when you have no means of getting there, it doesn’t matter if it’s five minutes away or on Mars. I was prevented from acquiring a driver’s license by 1) all lessons being held in town, so how is one supposed to get there without any means of transportation?? and 2) the prohibitive cost, which is quite a robbery in Israel. Because, you see, around here it isn’t enough that someone who knows how to drive teaches you. Oh no! Even if you know perfectly well how to drive, you still need to take a minimum of 28 lessons (I think) with a licensed driving teacher, which costs a bundle. Sorry for the rant, but I always get my blood boiling over government-sanctioned extortion that robs people of their hard-earned money.

So, for months on end my husband and I would both be home, with the car sitting in the driveway (which, granted, saved on gas), and us going crazy with the despair of not being able to climb out of the pit.

Eventually, I came to terms with the fact that I have to make do with what I have, and find ways to generate income from home. Today, I give nutritional counseling (in which I have a degree), do editing, proofreading and translation, and write both fiction and nonfiction. It’s wonderful, but I wish I had done it sooner, because establishing yourself as a freelancer requires time and dedication, and it takes a while before you’re actually earning. It was also hard to shake off the dogma of the husband being 100% responsible for the income. I do still believe that it makes sense for the man to be the main breadwinner, and that it’s extremely difficult, unreasonable and unfair for the woman to shoulder this burden as well, in addition to pregnancy, birth, and nursing (my husband can change diapers and bathe babies very well, but he can’t breastfeed or do postpartum recovery instead of me, nor can he swap with me and borrow my heavy, tired, pregnant body). However, when one’s family is struggling financially, one of the most empowering things is to be proactive and seek ways out of the rut, rather than only look up to your other half and hope things will improve.

To sum up this long and rather rambling post: if you’re planning on a lifestyle in which you earn less and spend less, in particular if you take the plunge and move to a rural area with the goal of becoming more self-sufficient and producing at least part of your own food, that’s wonderful, and it’s still our path, though it has been rocky and winding. However, you must be prepared for financial crisis, or you’ll find yourself in deep trouble when it hits and you have no way to counter it. So what would I have done differently, if I could (some things really did not depend on me)?

1. Possibly, I would have waited with the purchase of that first home. It’s great to be a home owner, but if it leaves you with absolutely zero in the bank, it puts you in a very precarious position.

2. Once the house was bought, I would have tried harder, and would have been ready to endure more discomfort, to refrain from selling it. Selling your only home does not solve problems, though it may stave off crisis, and is unavoidable sometimes. You have to live somewhere, and loose money inevitably goes down the drain. In hindsight, we could have held on.

3. I would have fought tooth and nail to leave more in savings during that time when we did have a nice income.

4. I would have prepared earlier, and more seriously, to the possibility of having to generate income, by whatever means. Granted, even working from home isn’t always practical when babies come one after another and you struggle to hold your head above water, but I have become a lot more efficient with my time during the past three years, and my heart literally bleeds for all those hours in the past spent on passive entertainment or just muddling around.

5. I would have trusted my judgment more. Not because I’m cleverer than my husband, but because two heads are always better than one. Magnanimously saying, “I’m sure that whatever you decide will be great” may sound nice, but going into all the nitty-gritty together is far more helpful.

The silver lining: we have never been, and are not, in debt. This makes things so much easier and less stressful. Avoiding debt (and mortgage is debt as well) is the best and soundest choice, in my opinion, that a family can make.

Saving and survival in hard times

Anna Simple Living , , ,

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Our family has been struggling with financial difficulties for some time now, and what has enabled us to survive, stay out of debt and keep our heads above water are, among other things, these money-saving strategies:

1. Food: we keep chickens for eggs, have a herb garden, and grow and gather some seasonal produce, but naturally, this isn’t enough for all our needs. We have learned to choose the cheapest and most nutritious foods we can get, and cook long-lasting, economical meals such as soups and stews.

We stockpile and try to venture out shopping less often, making do with what we have in the house. The less you pop into stores, the less you will buy!

Another useful strategy is, whenever you find a defect in any store-bought product, don’t pass, complain. If you word your complaint right, you might get not just a refund, but all sorts of coupons and gift cards as compensation. Lately we have complained about a bag of wormy rice, and got two bags of rice and a bunch of canned goods as a gesture of goodwill.

2. Utility bills: reexamine your electricity and water usage and scrimp as much as you can. We have a solar water heater and I try to make do with it even in winter – we still have enough sunny days to shower every other day or so. Shocked? A daily shower is a privilege, not a need, especially in winter (in summer, we have plenty of hot water from the solar heater to shower every day). Wash full loads of laundry, line-dry your clothes, turn off lights and appliances, and wear extra layers of clothes rather than heat your house.

3. Gas: gas and car maintenance are expensive. Stay home as much as you can. Schedule all your errands for one day. Try to get people to drive over to see you, rather than go to them.

If you live in an area with reliable public transportation, consider going without a car. We can’t do without a car, unfortunately, and furthermore, we’ll have to upgrade in the near future as we grow to be a family of six and a standard 5-seat vehicle is no longer enough for us. Of course, we’ll sell our current car to help fund the next one.

4. Clothes and shoes: hand-me-downs and thrift stores will keep you clothed for next to nothing, and often you can get very nice brand-name gently used clothes that will last a great deal longer than cheap new clothes you might have bought at the mall.

5. Housing costs: if you rent or are paying a mortgage, it’s a huge, stress-inducing drain in hard times. Many people have been able to downsize to a smaller, cheaper, easier to maintain home, without any material reduction of comfort. We are lucky enough to own our home free and clear, but unfortunately, the local taxes are killing us. We are praying for an opportunity to sell and move to an area with lower local taxes.

6. Health: we have reexamined our health insurance to get a more affordable plan that covers nearly as much. It’s still a huge expense, and we might have to give it up altogether if things don’t improve soon, because it’s absurd to have a health insurance and starve, but for now we’re holding on.

At the same time, keep yourself in as good health as possible, because depression and physical weakness make it more difficult to handle a financial crisis. Eat as well as you can, get your sleep, be out in the fresh air, and take exercise in the form of walks, riding a bicycle, or working in the garden. It’s healthy and free.

7. Shopping and entertainment: just close your pocket and don’t buy anything you can survive without. Limit your entertainment to free stuff – walks, hikes, bonfires, friendly get-togethers – and moreover, stuff that is within walking distance or a very short drive, because gas costs money too, remember? Swap books with friends or use the library, reexamine your mobile phone and internet plans, and if you still have cable TV, cancel it.

8. Alternative money making sources: as important as saving is, sometimes you also need to think how you can earn a little extra. My husband fixes computers while he’s getting his company established, while I write fiction and nonfiction, do freelance editing and proofreading, translate, and do occasional nutrition counseling for people who are prepared to make it to my neck of woods.

It’s hard when you’re on a tight budget, but it’s possible to survive and even thrive by judicious management. Read more on frugal living strategies here.

The Diaper Debate

Anna Natural Health, Simple Living , , , ,

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A long time ago, when I was pregnant for the first time and we had many lofty ideas about our own capabilities, my husband and I talked about cloth diapers. We pretty much decided we are going to use them, for the sake of frugality, sustainability and baby’s skin health. It just seemed the right choice all around, until one day, when I was getting pretty big, we had the following conversation.

DH: “But where would we wash the diapers?”

Me: “What do you mean, where? We put them in the washing machine.”

DH: (wrinkling his nose): “What, you’ll put poopy diapers in the same machine that we use to wash our clothes?”

Me: “Not in the same cycle. We’ll wash them separately, you know.” 

DH: “I still think that’s gross. Think of all the bacteria that will be left over.”

Me: “Well, what do you suggest?”

DH: “My Mom always washed our diapers by hand.”

Do I have to tell you? We’ve been using disposables ever since. And at times I’ve been feeling guilty about it, too, especially when I haul out a big garbage bag full of almost nothing but diapers and think about it adding to some tremendous landfill.

It wasn’t just the gross factor that put us off; we’ve had plenty of poop in our washing machine anyway over the years, what with newborn blow-outs and all. There were periods when changing a poopy diaper equaled changing a whole baby outfit, every time. We’re still all alive and well.

It was also that conveniently made cloth diapers are a pretty hefty initial investment, one we hesitated to make, and I’m not up to sewing my own. And, of course, there’s the convenience; at times, I’ve been so overwhelmed by laundry (especially not having a drier, on long rainy weeks in winter) that voluntarily adding more seemed an effort of will beyond my capability.

As a compromise, I have tried doing early potty-training, with babies running around bare-bottomed around the house on many a summer day. The little tushies got a pleasant breeze, we saved some money on diapers, and I felt better about the ecological aspect of it all.

In the place where we live now, we have frequent electricity and water shortages, up to the point that everybody living in the neighborhood often gets requests to save on electricity and water as much as possible by trying to minimize the usage of air conditioners, ovens and, of course, washing machines. An extra load of diapers every day or two just doesn’t seem feasible in such conditions.  I actually believe that in Israel, where water is a precious commodity, bio-degradable diapers may be more eco-friendly than cloth.

There had to be, however, a compromise: green and convenient; eco-friendly but disposable. So lately I’ve started looking into the option of switching to bio-degradable disposable diapers, such as these. I’d love to hear from any of you who care to share your experience. Cloth? Bio-degradable? Plain ol’ Pampers?

Making money from home

Anna Simple Living , ,

Our desire for financial independence, coupled with our wish to have a quiet, gentle, non-money-driven life and a mother at home for the children, has led us down the path of exploring simple,  self-reliant living. A simple life is not necessarily a cheapo life, but it is conductive to saving money in many ways.

We home-educate, so we don’t have daycare or schools fees. I breastfeed, so we never had to buy formula. By regularly checking out thrift stores, we have a reliable source of clothes and household goods, very cheaply. We only have one car, which saves us gas, maintenance and insurance. Our entertainment is simple and usually involves visiting with friends or local, free day trips. Finally, we are currently working on the important aspect of food self-reliance, by raising our own chickens, foraging for free edible goods, and establishing a vegetable garden.

Nevertheless, while saving money is a cornerstone of debt-free living on a small income, sometimes it isn’t enough. Maybe you’re going through a period of increased expenses. Or maybe you just want to make a little extra that would go towards financing a project you’ve long dreamed about. For us, I guess, it’s a bit of both right now, and I’ve been brainstorming some ways of making money from home:

Childcare – this isn’t something I would personally do as a first choice, because frankly, with my three children I’ve got quite enough to be getting on with. But providing childcare is probably the most popular and reliable means of generating extra income from home among stay-at-home mothers around here, either as all-day care for babies or picking up children from school, feeding them lunch and watching them for a couple of hours.

Private tutoring – a foreign language, a proficiency at music or dancing, superior knowledge of mathematics, or any special skill can all be converted into a side income by providing private lessons at your home or in your neighbors’ homes, at your convenience. Of course, if you have little children you will need someone to watch and entertain them while the lesson is going on. Or, if they go to bed early enough, you might teach while they are asleep.

Coaching and counseling – I have done nutritional counseling and coaching, one on one and in group settings, right in my living room. With young children I haven’t been able to do it on a regular basis, but I look forward to having more time, and hopefully more space, in the future. Any kind of coaching or counseling can be done from home, though again this might not always be compatible with full-time parenting of little ones.

Selling your surplus produce – if you have an established homestead, with a seasonal surplus of vegetables, eggs, milk or animals, you can sell what you produce. The key is to find customers for what you offer. We tried doing that with fresh eggs last year – we had more than we could use, but people just weren’t interested. So we decided to thin out our flock a bit to make it more sustainable, and lo and behold! People just lined up to buy productive hens for their back yard, and asked us to contact them if we have more birds for sale in the future. It sure was a nice surprise. This year we hope to raise some extra chicks to sell at the end of the season.

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Above: Black Brahma/New Hampshire chicks, which will hopefully grow into nice big birds, to be sold at a good price at some point

Selling things you make – women around here and all over the world sell their homemade bread, baked goods, candles, soaps, body care products, home-sewn baby slings, toys and nursing covers, and more. It’s possible to expand this into a group tutorial: for example, people who have bought your artisan bread and liked it might be willing to pay for acquiring the skill of making it on their own. It is possible to advertise in local newspapers, and Etsy has opened a whole new world of possibilities for hand-crafters.

Selling your art – if you are the artsy type, your hobby might just redeem itself financially and become a source of income. Around here we have painters, glass-blowers, and jewelry-makers. Again, group tutorials might be an attraction as well. If I had the possibility, I’d love to learn beading. A friend of mine, Jenny, set up a successful home business selling her cute painted rocks.

Writing – I write fiction, love it and hope to get a publishing deal someday, but I realize it’s a long, slow process with lots of competition and I can’t put all my eggs in one basket. So I’m also looking at possibilities of writing articles, website content, and doing English/Hebrew translations.

These are just a few ideas I’ve come up with. I’d love to hear yours.