The January Plan

January 2012 represents the third month in this second phase of That Poverty Project, "Struggles of the Working Poor". You can find out more about the project, and the parameters of this phase by clicking here.

As in the previous two months, I have only an average of $7.50 per day to buy anything I need other than rent, insurance, and utilities.  The money is received daily in varying amounts that will average out to $7.50 per day over the course of the month.  That works out to approximately $225 per month for food, gas, clothing, entertainment and any incidentals that arise.  As I determined early on, this is actually a workable situation for a single person provided nothing goes wrong.  However, if absolutely anything goes wrong or if you add any extra mouths to the mix things get pretty hairy, if not downright scary.

In November, I received my daily amounts and tried to live on them as I received them.  I discovered almost instantaneously that I couldn't do so.  I wasn't able to buy everything I needed when I needed it, I didn't have enough to take advantage of cost savings, and the sporadic nature of the amounts left me unable to plan anything.  I resorted to the use of credit at loan shark rates of 45% per month compounded daily.  Needless to say, I borrowed as little as possible for as short a period of time as possible.  The credit was dangerous, but it did help me get by and I ended the month $15 in debt.

In December, I had access to a credit facility that was modeled after the first micro-finance program offered in the developing world.   This Grameen Model was based upon the work of Nobel Peace Prize recipient, Prof. Yunus Muhammad.  I was allowed to take a single loan in the month to a maximum of 60% of my projected earnings at a non-compounding interest rate of 2% per month, repayable in four weekly instalments.  I opted to take the full amount of the loan ($135), and my life was transformed immediately.  I was able to pay back my previous debt, budget for the month, and avoid being affected by the ebbs and flows of the daily amounts I received.  While still living "on the edge" given that if anything went awry I would be in serious difficulties, it was a much more civilized and less stressful existence.  I ended the month with just over $9 in my pocket.

As of January 1st, the credit facility has changed slightly to a more recent micro-finance model.  While the non-compounding interest rate is slightly higher (3% per month), it is much more flexible.  Operating more like a revolving line of credit, I am able to access it whenever I like as long as I stay under my credit limit (which is 60% of anticipated revenues for the rest of the month).  Further, I can pay it back whenever I want provided that the entirety of any amount taken out is paid back by the end of the month.  This month I decided to take an initial loan of $50, being the amount I needed to cover my big grocery stock-up.  We'll see how it goes . . .

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Phase II - Struggles of the Working Poor Daily Report
Day 64 - 66 (January 3^rd – January 5^th)

Weight at Beginning of Project:  233 lbs
Weight at End of Phase One:  216 lbs
Weight at Start of Phase Two: 221 lbs
Weight at Start of Today:  218 lbs

Available Funds:   $23.51 (leftover) + $9.00 (Jan 3) + $50.00 (New Loan) + $4.00 (Jan 4) + $5.00 (Jan 5) = $91.51
Funds Spent Today:  $46.38 (Jan 3)
Remaining Funds:   $45.13

New Loan:  $50.00 (Jan 3)
Loan Payment Due Today: $0.00
Loan Payment:   $0.00
Outstanding Loan: $50.00 (originally $50.00) @ 3% per month (non-compounding) . . . re-payment due January 31^st (or earlier)

Items Purchased:   ½ Dozen Eggs, Frozen Pie Shells, 3 x 2-Packs of Stuffed Chicken (incredibly on sale!), 6-Pack of Smokies (incredibly on sale!), 2 Packs of Italian Sausage (incredibly on sale!), 7 Bananas, 7 Apples, Head Lettuce, 1 Bunch of Green Onions, 6 Roma Tomatoes, 7 Large Carrots, 100 g Bologna  (TOTAL SAVINGS . . . $24!!)

Free Stuff:   Nil

Gas Purchased* & Remaining:  $0.00 (i.e. 0.00 litres @ $1.109 per litre . . . 0.0 km @ 10 km/litre) + 4.35 litres (gas remaining) = 4.35 litres (43.5 km)
Driving Today:  22.0 km (i.e. 2.20 litres)
Gas Remaining:  2.15 litres (i.e. 21.5 km)

*Will not include any fuel or driving related to work that is paid for by work.

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