How To Survive The Real World: Zero Income Living After College

| Posted in Debt

How to survive the real world on zero income? My father always tells me, “Don’t worry, there are no longer any debtors’ prisons. What are they going to do, lock you up?”

Good advice for an age where salaries are not going up, yet price of living is on the rise daily. As this giant lump in the throat of America known as the Baby Boomers finally clears into geriatrics we may finally see positions opening up and people from our generation finally raising the bar in salaries, returning the concept of the middle class back to this country. Until that happens, don’t worry, they can’t throw you in prison for not paying.

So, what do you do when you are jobless? Living with no income, or earning less than you need to pay your bills? There are always options, and the first you need to do is some math: calculate what you need to earn weekly to pay all of your bills, and then some. Once you’ve got the number, it’s time to figure out how to get there.

One magical word – deferment.
Your first option, if you’re a recent grad and have yet to use your deferment or forbearance options, is to take a break from paying. Most private and federal loans offer deferment or forbearance plans that let you stop paying for periods of time based on your needs. You’ll need to contact your loan lender to find out specific details, but generally, all you need to do is fill out a form – sometimes even online – explaining why you need to take a break, and if it’s an honest and legit reason, you’re granted a moment of rest. And usually, “I’m jobless and can’t afford to pay my monthly balance” is an honest and legit reason. Of course, keep in mind that the interest doesn’t stop building, and most lenders have a cap on the amount of time you can defer payment, but it certainly buys you time and money to travel, find a place to live, look for a job, or just go out and enjoy life.

Time’s Up.
OK… so what if you’ve already deferred your loans for the maximum time… now what? Well, there is no magic solution but living in the negative is certainly possible, at least for a short time — I know from experience. A year ago my husband and I decided to move to New York City. He got a job loading grip trucks for film shoots and I was a prep cook in Brooklyn. Our combined income came nowhere near what we needed to pay our rent, subway fares, living expenses, student loans, credit card debt after college, etc. We were in the red, and getting farther and farther behind. What did we do? I’ll tell you:

1. Prioritize. When you’re broke, the number one thing you need to do is spend wisely. It’s obvious, but not always easy. Now is not the time to buy new clothes, go Christmas shopping, or get a new credit card. Limit all spending to the essentials – food, bills, transportation.

2. Nurture Your Mind. It’s stressful and mentally exhausting to be broke. During our experience in New York I had bouts of depression and serious anxiety. It’s important to remember that no matter what happens, there is always something to be thankful for – even if it’s just your ability to breathe! Imagine the worst case scenario – chances are, there is still someone – a parent, perhaps – that would be there to help you out. Make it one of your priorities to maintain a fun lifestyle – but do it frugally. We love watching movies, but we could never afford the theatre. Despite our awful financial situation, we insisted on keeping our Netflix account – a meager expense that provided us a small bit of entertainment and enjoyment. There were other things that we refused to give up, so decide what’s essential to your happiness and figure out how to maintain it as cheaply as possible.

3. Ask for Help. If you have friends or family that can help you, graciously accept. Be thankful, and don’t rely on it. Make a note to yourself to return the favor for someone else living with no income when things improve for you – and then really do it. If you are forced to ask your parents for money, keep a tally of what they give you and aim to pay it back one day – even if it’s years from now and even if they won’t accept.

4. Work your ass off! Yes, if you’re broke and getting broker, now is not the time to sit on the couch and feel sorry for yourself. Do whatever you possibly can to get a job, or two, or three. Work hard, give your best – even if it’s a job unrelated to your field of study. Look for unique opportunities, like part-time jobs that will provide benefits to help your situation – my job as a prep cook meant a significant discount on food and free leftovers almost daily. If you can’t live without going to the movies, work 4 hours a week at the cineplex. Take advantage of any special skills you may have by doing freelance work for extra mone: If you can knit, make scarves and sell them on eBay. Post signs to walk dogs. Get creative. If you work hard, your efforts will not go unnoticed and your situation is bound to change.

5. Save your pennies. OK, not literally, but pay attention to any opportunity to save a little money. Learning how to survive the real world includes ingenuity. I used to carry 40 lbs. of wet laundry back up to our fifth-floor walk-up to hang dry the clothes, just so we could save five dollars on drying. Return all of your bottles for the deposit. Learn how to cook large, cheap meals like soup, for example, that will last several days. Shop at thrift stores. Buy household items like toilet paper or laundry detergent in large quantities so you save in the long run. If you drive to work, try coordinating a car-pool with coworkers. Every little bit helps.

6. Know when to give up. Lastly, keep tabs on your progress and if you’ve done everything in your power to improve your situation, know when to go to your last resort. We gave ourselves a few months to try to improve our situation, ultimately deciding that if things didn’t change, we would leave the city. Our situation remained the same – so five months after arriving, we arranged a sublet, packed our things, and moved into the upstairs of my in-law’s house. It was our last resort, and we knew when to take it. Come up with an ultimate back-up plan, even if it’s moving back home, and know when it’s time to take the plunge, no regrets. Life is about learning and making mistakes, and we know that had we not gone to the city we’d always wonder “What if…” Despite how poor we were, I have memories and lessons learned from our brief stay that will stay with me forever. And you can’t put a price on that.