Few, if any, are unaffected by the worldwide recession. What steps can you take to avoid becoming another member of the "new poor"?
THE "NEW POOR" may have lived just down the street from you. Maybe they worked with you. Perhaps they are friends or relatives. Now they are jobless or, even worse, both unemployed and homeless. To make things tougher, many of the new poor cannot even qualify for general relief because they have too many assets that they cannot turn into cash.
Too Many Assets
In the United States, if one has any income, or more than $50 in the bank, or an automobile worth more than $1,500, one does not qualify for general relief. In the U.S., the new poor must sell their assets gradually to make ends meet and not until those assets are liquidated are they poor enough to qualify for help. For them, the slide has begun toward permanent poverty. According to urbanologist Pierre De-Vise, the worst effect of poverty in the United States is that it creates "a culture of dependency." A culture from which few poor ever escape, even to the lower middle class. Those who have swelled the ranks of the new poor did have good jobs. They did have a home, good clothes. But now many are living on the streets, in tents or in a car — and hence are called by different names in different places in the Western world. The poorest of the new poor move from place to place in search of work and a place to live. In Britain there are more than 100,000 such people. Across the Channel, there are 5,000 in Paris alone. And in the United States, the U.S. Conference of Mayors estimated that there are more than two million homeless new poor. One of the saddest aspects about the new poor is that they have, by and large, never understood poverty. Many temporary shelters report a stunning influx of "good, solid middle-class families." Men who formerly made up to $40,000 to $50,000 a year, men with college degrees, people who owned nice homes, have had to hit the road in hopes of getting back on their feet again. What is frightening is that almost anyone of us could be in their place.
Restoring Your Financial Solvency
How, then, can you avoid this plague of poverty before it strikes? One of the first steps you should take to avoid financial disaster is to reduce your debts — assuming you still have a job, of course. The larger your debts, the more earnest you should be. Liquidate whatever property you must to bring your debts down to a manageable size. For most, what is considered manageable is about 15 percent of your annual take-home pay — net, not gross. If you have trouble controlling your use of credit cards, cut them up and throw them away. Credit can be a tremendous asset if it is used properly — a curse if it is not. Remember, as it says in Proverbs 22:7, "the borrower is servant to the lender" (NIV throughout). By reducing your debts you will also have the added benefit of reducing your worries, possibly even your health problems. The next time you think about keeping up with the Joneses, think about the accumulation of debts that it took for the Joneses to get where they are! Once you've begun to get your debts under control, start a savings program. Most financial consultants recommend that a family or individual have at least three months' wages — preferably six months' — in savings as a financial reserve. When you take into consideration that unemployment benefits are often limited in both time and amount, a three months' cushion is not much at all. In conjunction with your savings program and debt cutting, start a realistic budget. For some ideas on how to go about setting up a budget, see the article "Coming to Grips With Your Finances" in the 48-page April issue of The Plain Truth.
Hanging on to Your Job
Once you've got your financial house in order, you will be free to enhance your position on your job. Now there is no way you can guarantee that you will keep your job this recession has proved that. But there are some things you can do to make yourself one of the last people your employer thinks of when he has to lay someone off. Be diligent. Be loyal. Make sure that you give "a fair day's work for a fair day's wage." If you don't have anything to do on the job for the moment, look for something. Take pride in your work. "Whatever your hand finds to do, do it with all your might" (Eccl. 9:10). Most of these may sound like clichés, but they are valid principles. Proverbs 22:29 says, "Do you see a man skilled in his work? He will serve before kings; he will not serve before obscure men." Hard work stands out. Employers notice it.
What About Working Wives?
When times become tough for their families, many women begin to consider taking a job outside the home — if they haven't already done so. But for you housewives who may be thinking of taking a job, here are some things to consider: Before you take a job, know something about it. How much tax will you have to pay? Are there deductions for medical insurance, pension plans or union dues? How much will it cost for food if you have to eat out? Is there extra clothing required that you must buy? And who will keep your children and at what cost? What about transportation? If you'll need a second car, how much will it and the insurance cost? Now take the cost of these "incidentals" and subtract their sum from your expected gross wages. Sometimes, not always, an outside full-time job isn't as financially rewarding as it may sound. There are alternatives, however. One such alternative is called work sharing. In work sharing, two workers split the work day on one full-time job. This arrangement is also attractive to employers since few fringe benefits are available to employees in these situations. Fast food shops, government and professional offices are leading the way in work-sharing hiring programs. The job is done at a savings to the employer while allowing the workers the flexibility they need to suit their particular schedules. Another possibility is bringing work into the home. If you are a talented seamstress, try taking in some sewing. If you are a good baker, try baking for others. Make use of your talents or develop some. Be creative. A word of caution about looking after other people's children, or baby-sitting as it is called. On the surface it may seem like an easy way to make money, but there are drawbacks. Are you required to have a license? How much will insurance — a necessary safeguard — cost you? How will this affect your own children? Many children are jealous of what they view as competition for their mother's affection and attention. One final word: Make sure that any work you do is what you and your husband really want.
One of the facts that is increasingly being brought to light by this recession is that fewer and fewer people will have lifelong careers in these times of fast changing technology. Accept it and do something about it. Develop a wide range of skills that are tangible in the labor market. Being an expert at only one thing may wind up being like a dinosaur — it could lead to career extinction. Go to school to learn a new skill. Learn more than one skill. If an opportunity is given to you on your job for some cross-training, "take it. By learning some other kind of job you will be adding to your inventory of job skills. A word on changing jobs. Before you do consider changing careers and leaving your job, make sure you have another job waiting for you. One of the worst things you can do in a recession is to quit a job with nothing to take its place. Wait until something firm turns up. Use some wisdom. Make sure that you will be happy with a new job.
Food and Health
One of the quickest ways to financial ruin today is to owe a large medical bill. Medical costs in West Germany have risen sixfold in the past decade. Britain's National Health service paid out the equivalent of U.S. $442 (approx. £270 per Briton in 1982) for health care claims. In the United States, health care costs have become mind boggling. In 1981, health care averaged out to more than $1,200 per citizen. Much of the problem in rising health care costs can be curbed simply by improving your diet, by exercising and by getting the proper amount of rest. That means eating wholesome, more natural foods rather than processed foods. You'll find that it is cheaper to buy a bag of potatoes than it is to buy packaged, prepared frozen potatoes. According to the U.S. Department of Agriculture, more than half of what Americans eat is processed food. When possible, try to eat those foods that are whole, unprocessed or that will spoil unless you use them relatively quickly. Quite simply, as one article on the West German Food and Drug Administration's findings on food additives reported, "Balanced food prevents dietary disorder and illness while wrong diet can cause sickness" (Frankfurter Allgemeine Zeitung fuer Deutschland, Sept. 11,1982).
What about your marital relationship? When finances begin to pinch, many couples find that they are faced with problems that seem to be insurmountable. So insurmountable as to be unsolvable. Divorce begins to look like an easy way out. But if you want to take one of the quickest paths to economic disaster, divorce is an accommodating choice. Divorce will effectively cut your income in half — accordingly your life-style, too. There are divorce lawyers, court costs and settlement taxes to consider. Those costs alone should give some couples pause, not to mention the mental anguish involved in being "set free." One survey reported that 60 percent of the men and 73 percent of the women who had been divorced for a year felt that they had made a mistake after having taken the time to reflect. Divorce isn't an easy way out. It is an easy way to poverty.
The Tithing Principle
In establishing your plan to avoid becoming another of the new poor, another step you need to consider is forming a partnership. It would be quite nice to have someone around who can guarantee you a cushion of relief when you need it. Someone who could give you the help you need at just the right time. Not a partnership with another human being, but one with God. As strange as this may sound in this modern world, it is an association that can deliver you from your financial headaches. How do you go about forming a partnership with God? Did you ever stop to think that every natural thing on this earth, in the earth or around the earth, is God's? The very air you breathe, the food you eat and the water you drink to sustain yourself were all created by God. God says the entire earth is his (Ex. 19:5). The very paper that your dollar, pound, franc, mark or peso is printed on comes from natural fibers that God created. Yes, even your money is God's. "'The silver is mine and the gold is mine,' declares the Lord Almighty" (Hag. 2:8). To begin your relationship with God, you must first begin to obey God's law of tithing. In this partnership, in exchange for 10 percent of your financial increase, God gives you 90 percent of the profits plus a promised bonus: added prosperity. On the surface this may not sound realistic. But appearances can be deceiving. Sometimes what may seem right to a man isn't what is good for him (see Proverbs 14:12). Over the long term, man hasn't had the best track record when it comes to finances — or anything else for that matter. But God offers you a way out. "Honor the Lord with your wealth, with the firstfruits of all your crops; then your barns will be filled to overflowing, and your vats will brim over with new wine" (Prov. 3:9-10). God wants you to prosper (III John 2). He also challenges you to see if tithing will not benefit you. "'Test me in this,' says the Lord Almighty, 'and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it' " (Mal. 3:10). But God leaves the choice up to you. Those who appropriate God's rightful share of their income for their own use are stealing from God (verses 8-9).
The thing to do now is act while you still have your job. Start today to cut your debts down to a manageable size. Begin a savings program to build a three-month cushion. Start a realistic budget. Begin to enhance your position on your job. If you, as a housewife, are thinking about going to work, be sure you know what your real compensation will be. Consider some alternatives to a full-time job. Realize, too, that you may not be able to have only one career in your working life. Develop a number of job skills that you can call on should the need arise. Reduce your medical bills by eating a balanced diet, exercising and getting proper rest. Work at having a good marriage. Divorce can ruin you financially. And above all, take God's challenge on tithing. See if he won't help you out of your present and future financial straits. There are other measures you can take to avoid the financial disaster that has stricken so many. Learn about those that apply to your situation by studying up-to-date books on the subject. But, remember, the next time you see a jobless, homeless individual living in a car or on the streets, that "there but for the grace of God go I." It could happen, unless you act now to do something about it.