I have been very involved with another project and it takes most of my time and almost all of my focus.  While it hasn’t brought in thousands of dollars, it has enriched my life.  I hope that I will be posting more frequently in the upcoming weeks and months but I am not making any promises.  Like most of you, I am still struggling in this economy.  Just when we think it can’t get any worse, it does.

The presidential elections are coming up and the president is expected to fix our economy.  So I ask you,  if you were running the country, what would you do?  How would you fix it?  We are trillions of dollars in debt and it’s growing.  If I managed my household, the way Congress manages the USA, I would be bankrupt.

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Steve Valdez went to Bank of America to cash his wife’s check.  For security reasons, Bank of America requires a thumbprint if you are cashing a check for someone else.  No problem for most of us but Mr. Valdez was born without thumbs.  I’m sure he would have given his right arm (pun intended) to be able to provide a thumbprint but the fact remained that he couldn’t.  Bank of America’s response…..  “Whatever”.

You can read the whole story here at  Fox News.  What a shame that a large corporation can treat the disabled so shabbily.  I don’t think that an apology days later from a vice president is quite enough.

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Second, we have heard back from Senator Frank Ruff.  His assistant called me this morning and asked for the judge’s name who heard the appeal.  He said that the senators cannot interfere in the judicial system but that he would look into it further.  Now that isn’t exactly hope but at least someone thought that there might be something we could do.

I feel like it’s a life sentence.  We sit here every day waiting for the sheriff to appear with another summons to court.  We both know that when it comes, there is nothing we can do.  It is a terrible situation and both of us are fighting hard just to put one foot in front of the other right now.

If anyone wants to help, the best thing we can do right now is to help publicize the story Blood from a Turnip: An Alimony Story.  You can link to it or submit it to your favorite social media site.   Having someone read the story who might be able to help is the best that we can hope for right now and maybe it won’t help R but it might help someone else.

For my part, I have written our legislators, the ACLU, various alimony support groups and Senator Ruff’s call is the best hope that we have gotten.

Again, thank you all for the support and prayers.  They mean so much!

This post has been included in the Carnival of Money Stories at Bible Money Matters.

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R  was disabled in 2003 after working for 17 years for Nonprofit  Corp.  He received long term disability insurance payments until the Spring of 2004 when he received a lump sum payment.  He used the majority of this sum to pay off both marital bills and his wife’s credit card bills.  (I mention this simply because this is not a case of a spouse who quits his job or becomes ‘disabled’ to avoid paying support.  R was out on disability almost a full year before he was separated from his wife.)

He waited the appropriate period of time and applied for Social Security Disability.  As anyone knows who has ever applied for disability, this is an ongoing and lengthy process of denials and appeals.  In the meantime, he has been left to earn whatever meager income that he can.

He was separated from his wife in the Summer of 2004.  She filed for spousal support and was awarded $1300 per month.  This is from a man who had no regular income.  At the time, he had a small amount of income from his horse business.  The judge stated at that time that he had no idea how to figure spousal support payments in this case.  He used an average of the deposits from the past three year’s bank statements.  Two of those years, R was working and the final year he was receiving disability payments. He never took into account that his current income had been drastically reduced from that amount.

Having little or no income and not being able to pay a retainer, R was forced to represent himself in his divorce.  Nothing was mentioned about spousal support until the very end of the trial when his ex-wife’s attorney asked the judge not to address it at that time but to remand it back to the juvenile and domestic court.  Not being an attorney, R had no idea that this would make it a permanent part of the divorce decree and so he did not object.    The divorce was granted in the Fall of 2007.

Since then it has been found that R has a degenerative joint condition that is affecting  both hips .  The hip joints are collapsing and they cause him extreme pain.  He has gone from taking over the counter pain relievers to taking 3 different prescriptions for pain.  On good days, he can walk without crutches.  On bad days even the crutches don’t help.  He is scheduled for one hip replacement in a few months.  Hopefully, if he recovers well from the first replacement then the second will come soon after.

R’s ex-wife filed a show cause for non payment of support last fall.  Even though R is living below the poverty level and is currently receiving food stamps and has not been able to work for years, the court ordered him to pay $5000 within 30 days.  Needless to say, it was not possible.  Not having any source of income, R could not even borrow the money.  In April, he was incarcerated for contempt until the $5,000 was paid.  With the help of his family and some very, very good friends, I was able to raise the money to have him released.

R appealed the court’s decision and asked for either modification of the spousal support or preferably termination as he is currently unable to work.  Monday, July 6^th, the judge denied the appeal.  His reasoning was that R could not work when the support was ordered, he could not work when the divorce was final and he still can’t work so nothing has changed.

After hearing of R’s medical conditions and lack of income, his ex-wife requested a sheriff’s sale so that the court would force the sale of the rest of his personal belongings.  Apparently both she and the court believe that you can get blood out of a turnip.

No one who is familiar with R’s circumstances and the details of the case can believe that this was ordered in the first place much less that it has been confirmed again.  His attorney was in shock.  No one could believe that our legal system would order him to pay something that was more than his annual income.  To my knowledge, he has never been asked what his current income is.

Due to the denial of the appeal, R will no doubt end up incarcerated again because there is no possible way for him to pay this.  The people of the Commonwealth of Virginia will end up paying for the senseless incarceration of another person.  According to the Denver Post, the cost of incarcerating one person was $23,876 or over $65 per day and that was in 2004.

Neither of us have a clue as to what to do next.  An appeal to a higher court would cost more than both our annual incomes combined.  We just sit and wait for the next “Show Cause” and wonder how long it will take her to file it.  We have both been so depressed that it has been hard to do anything.

If anyone has any ideas or suggestions, please leave a comment or send me an email.  There seems to be no hope.

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Needless to say, the prognosis is not good.  I came home on Monday because I have things that need to be done here on the farm but I expect that I will be headed back that way in the next week or two.  It is going to be challenging to balance R’s medical appointments here and my parent’s needs 7 hours away.  

My plan at the moment is to spend as much time there as I can so I believe I will be commuting back and forth.  I will go down one day, stay for two days and drive back on the forth.  Hopefully, I can do this on a weekly basis which will give me time here to take care of things and then time to pick up some of the slack at my parents.

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Needless to say, it doesn’t look good.  He is scheduled for more tests on Monday and I am staying here to help Mom get him through those.  Then I am headed home for a bit.  I know that I will be back soon but I have to get home and take care of things there as well.

While I have tons of time to write here, I can’t seem to focus on it so I am not getting much accomplished.

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I think I have posted in the past that R had a neck injury that put him out on disability 5 years ago.  He has been fighting the disability system ever since and has not had health insurance.  Last winter we found a way to get him health care and he has been undergoing testing to find out why he is in so much pain.

They have discovered that not only is his neck still degenerating but both of his hip joints are 80-90 percent gone.   Complicate this with high blood pressure that might keep him from surgery and the outlook is not promising.  We are working hard at getting his blood pressure down so he will be a candidate for surgery.

In the meantime, he is worried about how we are going to survive if he is not able to do the work around the farm while he is recovering from surgery.  I’m sure that with the help of all of our family we will make it through.

This has been a huge distraction from my focus on our finances and the motivation to write.  I will be posting from time to time but it is going to be difficult to post with any regularity as quite a bit of the farm work is falling on my shoulders.

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The first secret to living on a small income is not to have a huge mortgage or rent payment or to have a small one.  While we have 17 acres here, Randy chose to remodel his small family home rather than build a new large home.  The result of this is a small mortgage rather than a large one.  Our mortgage payment is less than $200 per month.

The second secret to living well on less is to separate wants from needs.  There are tons of things that we wouldn’t mind having, there are some things we want and then there are a few things that we need.  There are the obvious things such as food, heat, gas for the car and clothes that are a need.  After living this way for awhile, it becomes easier to separate the things we want from the things we need.  The things that are on our want list right now are pretty close to needs such as a replacement door handle for my car.  It broke about a month ago and I have every intention of replacing it but I am waiting for our money to be right so I don’t have to charge it or risk not having money to pay for the things we absolutely need.  In the meantime, it’s an inconvenience.

The third secret is to have no  debt.  We don’t borrow money, we make do with what we have.  We don’t use credit cards, we don’t have a car loan.  Of course, this means that we don’t have brand new cars.  My little 1993 Geo Metro makes do as our main mode of transportation.  Would we like to have a newer car?  Sure but it’s not something that I am willing to go into debt to have.

Have an emergency fund!  When you are living on low income, the small things can be an emergency.  We manage to keep a $500 emergency fund most of the time.  We also use this fund to pay our monthly bills if our income dips for a month or if we have repairs, etc.  If we use it, I make it a priority to build it back up again so that we have that cushion if we need it.

Keep a budget!  We pretty much know how much money we need to have come in and how much money we will spend in a month.  We buy, sell and train horses as a living and as you can imagine, in this economy, income can be a little dicey.  We keep our needed income in mind and work a little harder to make it some months.

Stock up!  When we go grocery shopping, we look for deals.  When there is a good sale, we stock up.  If chickens are .99 a pound, we might buy 5 or 6 of them.  If vegetables are on sale, we buy as much as we can afford and have room to store.  When money is funny, we eat out of the freezer.  Right now, I bet we could eat well for a month without having to buy more than milk and eggs.

We also save money by bartering services.  We can often provide a service in return for something we want or need or someone will want to trade something in partial payment for one of our horses.  This works out well for us as we often have more time than money. We recently hauled a horse for someone and they will use their tractor to plow our garden.

Do it yourself! This covers so many things.  If something breaks, we repair it ourselves if we can.  We mow our own grass, cut our own wood, do small repairs on our cars and grow our own vegetables.   We make whatever repairs that we can so that we don’t have to pay labor.  We cook from scratch and use very little packaged pre-prepared foods.

Do we live large?  No, not if you mean driving a late model car, having a big house or wearing the latest fashions.  Do we live well?  Yes.  We have everything we need and some of the things we want.  We eat well, go out to dinner once a week with friends, and we enjoy the things we do have.

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Three years ago, I had a management position with a large corporation and an income over $60,000 per year.  I owned a small house and a new car.  Sounds pretty good doesn’t it?   It is deceptive because the cost of living where I was located was so high that even with my income, I couldn’t afford to live.

This was before I discovered personal finance.  Had I known then what I know now, the decisions that I made would have probably been different.  Hind sight is always 20/20.  I decided to make some changes in my life.  I was looking to significantly lower my cost of living and keep my income in the same range.  You can read more about the decisions that I made in the post 4 Good Decisions that Brought Me to My Financial Knees.

So here I am, an intelligent, moderately well educated 50 year old woman whose income is at or below the poverty level.  I am not however, destitute.  I am not living on welfare or food stamps.  I eat well and I have heat but I can’t pay my consumer debt.  I’m actually fairly happy.  Of course there are holes in this situation.  It allows no saving for retirement, I have no health or life insurance as my income just won’t stretch that far.  I live on the brink of disaster all the time.  If I have an accident or a major illness and can’t work, there is very little cushion to fall back on.  My tiny little emergency fund is all that stands between me and disaster.

I am probably more representative of American poor than the unwed mother living on welfare or the drug addict who is homeless and unable to hold down a job.  Over 37 million people live below the poverty threshold.  Paul Harris writes in a 2006 article for the Observer:

A shocking 37 million Americans live in poverty. That is 12.7 per cent of the population – the highest percentage in the developed world. They are found from the hills of Kentucky to Detroit’s streets, from the Deep South of Louisiana to the heartland of Oklahoma. Each year since 2001 their number has grown.

He has some interesting stories on a few people who are living in poverty.  I don’t believe that they are the norm but it made interesting reading.

What Is Poverty?

Officially the poverty threshold is determined by the US census and the full tables can be seen at the census website.  According to Wikipedia “This measure recognizes poverty as a lack of those goods and services commonly taken for granted by members of mainstream society.”

Poverty Guidelines are issued by the Department of Health and Human Services and are a simplified version of the poverty thresholds.   They are used largely for administrative purposes in determining benefits for citizens.

Most industrial nations use a relative measure of poverty (income of 60% of the median income) and this actually increases the percentage for the US.  Our national median income is $50,233 and 60%

The following table is from the US Census bureau website.

Stop for a moment and imagine that  you had to support your family on this income.  One factor in determining the poverty thresholds is the amount of money that a family spends on food.  The Department of Agriculture found that families of three or more spend one third of their after tax dollars on food so that the threshold was determined by multiplying the cost of food by three based on the Thrifty Food Plan.

Now stop and think about how much you spent at the grocery store last week.  A family at the poverty level would be spending approximately $35 per person on food per week.  In fact, this is the amount that food stamps are based on.  It differs based on sex and age but according to the Cost Of Food for September 2008, you should be able to feed a family of 3 a nutritious diet for approximately $110 per week.  This amount differs based on the ages and sex of the family.

And if you think that you will never be “poor” statistics may prove you wrong.  Interestingly enough 58.5% of Americans will spend at least one year living below the poverty level between the ages of 25 and 75. Why and how does that happen?

One Example of a Fall Into Poverty

David was a 55 year old man.  He had a good job with decent benefits.  He wasn’t rich but he wasn’t poor either.  Two years ago, he was diagnosed with cancer.  When his doctor told him what his treatment schedule would be, he was concerned about taking that much time off work.  His doctor informed him that he would never work again.

Just that quickly he lost all his income and soon after his benefits.  His savings was eaten up by medical bills and living expenses.  He was thrust rudely into the disability nightmare.  He was lucky, if you can call it that, because he had a terminal illness and recieved disability quickly (less than the two or three years that it sometimes takes).  He receives medicaid because he now has no property and little income.

He exists now on under $1,000 per month.  That pays for his food, rent, electricity, tv, phone, gas, and believe it or not, child support.  He is frugal with his money, he has to be.  He schedules his doctors appointments early in the month because by the end of the month, there is no money to pay for gas to get to them.

The good news is that his cancer is in remission.  He still takes chemo therapy but there is no sign of cancer.  Once his chemo is over, there is the chance that his disability and medicaid will stop and he will be faced with trying to find work as a 57 year old man in a poor economy.

Poverty can happen to anyone and does happen to over half of the American population.

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This statement shocked me.  My parents are retired and have a perfect credit record.  I cannot imagine them making a payment late, much less letting a house go into foreclosure.  However, I cannot fault their decision as in today’s economy and real estate market, their choices are limited and their savings are already shrinking due to the instability in the economy.

I know that this decision was one of the hardest in their life.  My point today is not to dissect their decision or situation and come up with solutions but to illustrate that we are all facing and making really hard decisions.  I would like to use the responses in an article on how the economy is forcing us to make decisions and how they are affecting our lives.  We hear a lot about how the economy is affecting the middle class but what about retired people who are struggling to live on a fixed income or families whose income has fallen to at or near the poverty level.

So readers, speak out.  Have you faced a hard financial decision?  How has your decision affected your life?  Was the end result positive or negative?

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