Managing your budget

Living within your means & avoiding money mistakes

I make $6.50 an hour. Am I poor? Here's how I slipped from the middle class into near poverty & what I'm doing about it.

By Karen Datko

As a single professional woman, for years I sat securely among the lower rungs of the middle class.

Now I've fallen off the ladder.

In a matter of months, I went from a comfortable life with decent pay and health insurance to a $6.50-an-hour job with no insurance, no furniture and just enough resources to keep the wolf from the door.

I no longer buy anything unless it's absolutely essential. I spend $40 at the supermarket and make it last for more than two weeks. I never turn down a free meal. I've learned to graciously accept money, furniture, elk meat and encouragement from worried friends.

I am no longer proud.

I have no romantic notions about being poor. I'm not nobler than others, and I'm not a victim. But I am one minor medical emergency away from welfare.

Simply put, I'm in survival mode.

Here's my story in a nutshell: I lost my job as a managing editor at a small newspaper in Montana after the ownership changed hands. Six months later, I moved to Pennsylvania to take a similar job. My living arrangements fell through, and as I searched for a rental that would accept my three dogs, I lived in a campground. When it became clear that I'd be a campground dweller for a while, my boss fired me, telling me my living situation was "bad for business." I sold off my household goods -- everything from a sofa to pots and pans -- and drove back to small-town Montana.

I still own a house here. And I have a network of loving friends.

Life at $6.50 an hour

The restaurant job isn't much better, making gallons of salad dressing, chopping lettuce and assembling relish trays. But it has its upsides. We can cook up "meat bits" on the grill and eat salad or baked potatoes. And the crew there is well worth the price of admission: Two of the servers bought me a gift certificate so I could afford to eat my birthday dinner there.

My take-home pay is about $660 a month. At $310, my mortgage takes the biggest chunk of that. Phone and Internet cost $70. Heat in winter is usually more than $100 -- it's Montana, after all.

Since I'm in the hole every month, I dip into my small savings to pay the difference, plus things like car insurance.

There is no room for error. At these wages, anything unexpected is a financial emergency. I worry especially about my health. I can't afford prescriptions, though I have used the county's health clinic rather than my own doctor.

Listing the wants & won'ts

• When I think about buying something, I think about how many hours I have to work to pay for it. That's a sobering thought.

For instance, washing the steakhouse kitchen counters down with bleach water gave my fingers the consistency of coarse sandpaper. The gloves provided by the restaurant didn't help. My fingers began snagging the napkins & tablecloths when I folded the laundry.

The cost of good hand lotion? Three hours of labor. The cost of better gloves: a half-hour. But that's also $3 subtracted from essentials like paying the heating bill.

• I try not to touch the small safety net I still have in the bank. It's there for emergencies, like a new transmission if my old van needs one or a new gas tank. The patches on the old tank have lasted far longer than anyone thought they would.
• I'll not touch my 401(k) & other retirement accounts. I'm better able to fend for myself now than I will be when I'm in my 70s.
• I won't sell my house. It's cheaper than rent & provides more old-age security.
• I have only one credit card & I use it only to purchase gasoline so I can monitor my spending on gas. I walk when I can & if I have to drive, I combine several trips into one.
• The programmable thermostat in my house is set at 63 degrees when I'm home & at 60 when I'm not or I'm asleep. I sleep in pajamas & a flannel robe underneath a comforter & blankets.
• I use 1/2 the recommended amount of laundry detergent & wash everything in cold water. I stopped using face cream & I buy the cheapest soap I can find.
• I don't turn down free food. At a recent community gathering, people - apparently noticing my dramatic weight loss - gave me leftovers to take home.
• I refuse to let my situation depress me - most of the time.

It could happen to anyone

When work at the restaurant is slow & I have time to feel the pain in my back, arms, feet & hands, I try not to think about what'll happen if health problems mean I can't work. There's no sense in indulging such worries.

I remember there's no shame in being poor. Others seem to share that view. I was talking to one of my bosses about something I'd done in better times that involved spending money. I said, "I did that . . ."

". . . Before you were poor," she finished my thought matter-of-factly, without condemnation or pity.

The fact is, a fall from financial grace can happen to anyone. And in reality, I'm not really poor. The official poverty line for a one-person household is an income of $9,800 a year & I'm still above that. And can I really be considered poor if I still have some savings, or still have my house?

I've decided that the only acceptable course of action, poor or not, is to consider this an opportunity. I used to wake up with the notion that my situation was temporary & that I'd somehow return to my "real" job. Now I have no illusions. But I do have solutions.

I've put in my notice at the restaurant in favor of a much better paying job at a new discount giant moving into town. The pay still will not be enough to live on, but it will do wonders to reduce my stress.

I've begun a pet-sitting business, taking care of pets in their own homes when their owners are away. I charge $10 to $15 a day, competitive with local pet boarders.

I volunteer my writing services for local nonprofits that I support. I've gotten active in community affairs that my previous occupation required me to keep at an arm's length.

I no longer define myself by what I do for a living. On the flip side, I won't base my identity on my income.

A number of readers have contacted us to find out how they might help Karen. Her response: "This really made my day. But I'm going to tell them to find someone closer to home who needs it more than I do." Karen hopes to deal with her circumstances through additional work and budgeting.