Great Job Breaking It, Hero

The European Union, in typical European fashion, has just placed a crushing burden on every small business owner, just when we can least afford it. In case nobody in the hallowed halls of Antwerp haven't noticed, we're in the middle of an economic downturn. That means that jobs are hard to come by, and it becomes all the more essential that people be able to make a living without having to first obtain the permission of an employer -- which means being able to start and operate your own small business in order to make money selling to carefully chosen niche markets that are too small and specific for the big operators to bother with.

The rise of the Internet has meant that small business operators can tap such markets not just in their immediate locale, but around the world -- until this utter travesty known as VAT-MOSS (Value-added tax mini one-stop shop) has come forth. It places documentation burdens on online sellers of digital goods that, while trivial for big players such as Amazon.com, are crushing for the little guy who just wants to bring in enough money to keep a roof over his head since he got laid off at his formerly well-paying job, without being a burden on society.

Chris Meadows has a summary of just how impossible it is for small businesses to comply with these new regulations without incurring crushing burdens.

The truly ironic thing about it is that it came about as the result of smaller players complaining that big internationals such as Amazon.com were gaming the system, locating their European headquarters in places such as Luxembourg which had unusually low VAT and as a result not paying their fair share comparative to smaller players who were more restricted in their ability to relocate. Which is yet another example of "be careful what you wish for, you might get it."

Because of the way the law is written, there are even questions about whether it could pull American businesses into its net. In theory it's possible, but in practice, an American who does only a tiny amount of business with EU citizens and has no plans to ever travel to any EU member state probably has little chance of running afoul of an EU bureaucrat determined to make an example of them.

Still, it is yet another example of  how over-regulation is choking economic growth. Yes, there do need to be some basic laws and regulations, ground rules to make sure that the selfish and manipulative don't prey upon the weak. But not this maze of rules that are literally impossible to comply with or enforce, for the simple reason that the people writing them have no concept of how they will actually work when put into practice.

When the Food Budget Is Tight

One thing I really miss is the AngelFood Ministries program. When I discovered that it had closed as a result of an investigation into allegations of the misappropriation of funds by the family that had originally organized it, I thought back to signs that had been developing over the past year that something was going wrong. The quality and variety of the food in the basic boxes had declined, while more and more fancy foods were appearing in special boxes that could be ordered in addition to the basic box. It did seem like they were running into trouble, but I never expected that it would be someone with their hand in the till.

It also meant that an opportunity for people to get low-cost food went away, and many people who were struggling but not destitute would be looking for some other way to make their food budgets stretch further. And that meant the quandary of whether to turn to the local food pantries.

One of the wonderful things about AngelFood and similar programs was the way that it allowed people to get low-cost food without worrying about whether they met qualification requirements or if they were taking food away from those who were even more needy than themselves. Unlike food pantries and the like, co-operative food buying programs like AngelFood weren't a finite pie being distributed to the needy. Instead, they worked on economies of scale to take everybody's small contributions and bulk-buy at far better price than individual families could hope to get buying retail -- and even made it possible to distribute free boxes to the destitute. As a result, if you were a little better off, your participation actually helped those who were worse off than you because the more people participating, the more money the organization had in their pool and the better deals they could get in their bulk-buying process, so that everybody could get more and better food.

Unfortunately, it appears that the development of new programs to take the place of AngelFood has been slow and spotty, and many places still don't have anybody serving their area. Thus people in those areas have to struggle with the question of whether they should turn to the local food pantries to help stretch a food budget that never seems to cover enough.

Gearing Down, Part 8 -- Health

Health is another place where there is a strong tendency to pursue false economies in response to a sudden downturn in one's financial situation. This is compounded by the problems of maintaining one's health insurance, and thus access to health care, if one becomes unemployed or is shifted to part-time. Whether the Affordable Care Act has really done anything to remedy that situation is a highly partisan issue and beyond the scope of this article, but in general the loss of employer-provided health insurance means facing a precarious situation, particularly if one should develop any serious illness or injury.

As a result, we have horror stories of people ignoring symptoms of serious medical conditions because they fear that treatment would bankrupt them and leave them penniless, even homeless. In one case, a woman ignored symptoms of a heart attack until it killed her because she was afraid that getting treatment might result in her losing her paid-off home, which had enabled her to keep her expenses low enough to support herself as a freelance writer.

Sadly, these situations are generally preventable, for the simple reason that while getting health care without health insurance may be difficult and expensive, it is almost always possible when one is dealing with a potentially life-threatening condition. The biggest problem is knowing how, and being willing to ask the right questions and knowing who to ask them.

For instance, it is almost always possible to negotiate a payment plan for medical expenses. As long as you can show a good-faith willingness to pay something, most doctors and hospitals will be willing to work with you to find an affordable arrangement. It is in their interest to get something, and if they put your back to the wall and you declare bankruptcy, it's completely possible that they will get nothing at all.

Also, it's possible to get low-cost or free health services. However, the biggest challenge is often finding out where they are available in your area. A snippy "there are places where you can get X" is one of the most unhelpful pieces of advice around, and often leaves its recipient feeling worse about a bad situation instead of better. It doesn't help to be told that places exist to help you if you haven't the least idea how to find the ones that exist where you live. One place to start is religious organizations that help the poor, such as the Society of St. Vincent de Paul. If they do not have a free or low-cost clinic of their own, they often know who does. Also, social services organizations may be able to help, although many of them are chronically understaffed and may not be as willing to go the distance to be helpful as those for whom charitable work is part of their spiritual life.

Even if you're not currently dealing with illness or injury, you don't want to let false economies damage your health. It's very tempting to neglect your health when under the stress of economic hard times. Even basics like regular exercise, proper nutrition and adequate sleep can seem like unaffordable luxuries when you feel the weight bearing down on you of constantly having too much month at the end of the money no matter how hard you scrimp and save. But when you're in financial trouble is exactly the time when you can't afford to let careless habits damage your health. Even if you have to drop your gym membership, you can still find ways to exercise at home. Eating cheaply doesn't have to mean eating nothing but crap foods, if you know how to shop wisely and learn how to cook unfamiliar foods. Sleep may be the most difficult thing, since sleep is not something one can obtain by application of willpower -- in fact, trying to buckle down and will oneself to sleep often backfires. But you can at least make sure to schedule adequate rest time, and try to put your worries out of your mind in hopes of drifting off to sleep.

In many ways, your health may be your most valuable asset in bad times, but because it's often an invisible one, it's easy to let slip away.

Gearing Down, part 7 -- Personal Care

Personal care expenditures are one of those things where it may be easy or difficult to reduce when confronted with a sudden financial reverse. Obviously, if you are one of those people who routinely spends hundreds of dollars on hair styling, manicures, pedicures, facials, high-end makeup and the like, it may be painful to give them up, but it is possible to realize substantial savings by making the sacrifice. However, if you're already in the habit of using off-brand soap and shampoo from the dollar store and trim your own hair when it starts showing too many split ends, it's going to be difficult to squeeze much savings out of this area, for the simple reason that you don't want to fall into the trap of false economy.

Personal hygiene is an important part of physical health, and especially when you're in bad financial straits, you really don't want to become ill with preventable problems. So essentials such as soap, shampoo and toothpaste, things that enable you to maintain basic cleanliness, need to stay on the shopping list somehow.

It may be possible to make things last longer by changing your habits of use. For instance, do you usually run a bead of toothpaste the entire length of your toothbrush? Although advertisements usually show toothpaste being applied in this way, since it is more aesthetically pleasing (and helps sell more toothpaste), you generally can get an effective cleaning and decay protection with a lump about the size of a pea or kidney bean.

Also, it may be possible to get free samples here and there that will help you stretch your own supply. For instance, our dentist generally gives out free toothpaste, toothpaste and dental floss with every visit. If a family member regularly travels on business and stays in hotels, they may be able to bring you spare bars of hotel soap and bottles of hotel shampoo. (One trick if you're staying multiple nights at the same hotel is to hide the used soap and shampoo before leaving in the morning. The maids won't throw it away, so you can use the rest for your second or third stay, and will put out fresh soap and shampoo, which you can save and take with you at the end of your stay).

If things get really desperate, some food pantries and other charitable organizations also give away personal hygiene items. So there is never any reason that you should have to go without the fundamental basics of personal hygiene, even if you have to give up some of the creature comforts of personal care that you've been accustomed to. It may mean needing to know where and how to ask and require the humility to be willing to ask, but there is always a way to make sure that you are clean and presentable.

Gearing Down, part 6 -- Entertainment

When one's finances take a sudden turn for the worse, there's a strong temptation to cut out one's entertainment budget altogether. It's an obvious luxury, and with few exceptions, there's not an ongoing subscription of contracted monthly payments. So out it goes -- no more movies, no more video rentals, no more fun vacation trips to amusement parks or the like.

Except for one huge problem: cutting out entertainment altogether can actually make one's situation worse by creating the perception that pleasure has been cut out of one's life and is now forbidden. As a result, it becomes easy to feel down about life in general -- which makes it harder to approach tasks such as job hunting with enthusiasm, or just to cope with rough times and not sink into a downward spiral of depression.

This means that, in order to keep our spirits up, we need to find ways to have fun that cost little or no money. Which means we'll need to look close to home, in order to keep gas costs low.

Many of us go through life without even realizing the variety of activities going on in our own communities unless we are personally involved in the organizations that put them on. For instance, if we don't have children in school, how much do we know about the schedules of the local grade school, jr. high or high school sports teams? While some school sports, especially football and basketball, may have admission fees, track meets and baseball games (including Little League) are almost always free.

Similarly, how many people realize that their local jr. highs and high schools generally have bands and even orchestras that put on concerts at regular times? A few of them may have nominal admission fees, but often they too are free to all comers, and would welcome a few more people in the audience to appreciate their student musicians' efforts.

Information on schedules of these and other school activities such as debate team or scholastic bowl meets can often be had for nothing more than a call or visit to the school administrative office. Be polite to the school secretary or receptionist and you'll probably learn a lot more than you expected about entertaining school activities that are open to the public. School officials are often struggling uphill on limited budgets, so they really appreciate seeing evidence of community involvement in their activities, because people who perceive a personal benefit from the school are more likely to vote yes on referendums for budget increases.

Another great place for entertainment when you have no entertainment budget is your local public library. Obviously, you can borrow books, videos and other things with which to entertain yourself, but libraries also sponsor lectures, workshops and other activities for community members. Furthermore, they are also a good source of information about other free activities in the community, such as a community band or chorus that gives free concerts, or small local museums and art galleries that are free or have minimal admission costs.

Local faith communities often have free activities that are open to people outside their congregations. Free community meals are a growing trend in many ares. Unlike the traditional soup kitchen, they are not focused on charity. Instead, they are created as opportunities for community members to socialize over a warm meal -- which means that not only do you get to eat out without a restaurant bill, but you also have the opportunity to meet people and have lively conversations.

Churches, synagogues, temples and the like may also have concerts, cantatas, Christmas and Easter pageants, or other musical program. They will be of a religious nature, but generally are not heavy-handed about the preaching side of things. There may be a free-will offering, but don't feel obligated to contribute if you don't have the money, although even a token gift will be welcome.

With a little research, you can generally find plenty of activities in your local area to help keep your spirits up during these difficult times without having to break the bank.

Gearing Down, part 5 -- Communications

Keeping in contact is an important part of our lives, and generally it costs money. Cell and landline phones, Internet access, cable TV, all have their associated monthly bills. And when you have a sudden reduction in your income, you have an urgent need to make those bills smaller.

Unfortunately, it may not necessarily be possible to shrink them as rapidly as you like. In the past decade, we have seen a strong shift from a month-to-month pattern to the long-term contract. This is particularly true with cellular phones, and was a big part of the shift by which they went from luxury goods to ordinary goods. Instead of having to make a large lump sum payment for the phone and then pay monthly connection fees, you got the phone free or at a much reduced cost, in return for making a legally binding commitment to maintain service on it for the next year or more. If you want to back out, you have to pay a hefty cancellation fee.

However, it may be possible to drop features and reduce the cost of your connectivity. For instance, you could go to a lower service tier with fewer minutes, especially if you don't use most of your minutes already. Similarly, you may want to examine your cable bill and determine whether you can go down to a package with fewer channels, especially if you seldom watch most of them.

Also, you may want to look into the possibility of a bundle discount if you're getting all of those services from the same company. Frequently you can get phone service, Internet and TV together for the same price any two of them would cost separately.

Obviously, if you have to move, you may have to disconnect the services that are tied to your location, even if it means paying a penalty. But you may want to keep your old cellular service, since that way your family, friends and associates won't have to learn a new number to get in contact with you.

As a result of these complexities, communications can be a difficult expense to reduce. Howwever, with some thought you may be able to pare it some.

Gearing Down, Part 4 -- Housing

Housing is another area of our lives in which making rapid changes often is not possible. Most of the inertia in housing comes from the nature of the legal arrangements by which we occupy our dwellings and the ways by which those arrangements are terminated.

Most obviously, if you own your house and it becomes unaffordable, you have to sell it, which means finding a buyer. And in a down market, that means the whole horrendous hassle of special cleaning and staging and showing it to people and generally being at the beck and call of your real estate agent until someone decides to buy it. The only alternative to the complexity of selling your house is foreclosure, which puts a big ugly black mark on your credit report that lingers for years.

Just because you're renting, it doesn't always mean you can leave an apartment or rental house that has suddenly become too expensive. Renters are often in year-long leases with expensive penalties for breaking them. Even if you're not locked into a lease, you still need to find new digs, which often means coming up with a large lump sum of cash to cover the security deposit, first month's rent and often the last month's rent.

It's possible to make some economies on other areas of your housing cost, particularly your utilities. However, there is only so much you can pare by shutting off lights, turning back the thermostat, and making sure not to run water when you're not actively using it. If a 5-10% reduction simply isn't going to make the difference between crash-and-burn and survival, you're going to need to look at more drastic measures.

One possibility to look into is sharing your quarters, and the expenses for them, with someone else. Although we often think in terms of adult children moving back in with their parents, there are many other possibilities for working out shared housing arrangements. Other family members or friends may be possibilities for co-housing.

However, you will want to think carefully about your arrangements if you bring someone else into your home. If you are renting, your lease may have restrictions on your ability to bring another person in as a co-tenant.

Also, consider how well you will be able to handle having another person on what has previously been your space. Especially if you have occupied your dwelling for some time, you probably have established routines that have become comfortable. How much are you willing to give to accommodate a new person's routines and habits? If you expect them to fit neatly in the spaces around your life, you're apt to discover that things don't work as happily as expected.

If you're going to have friends rooming with you, how well do you know them, and under what circumstances? All too often, people only see one side of a person. If you've only seen their public face, having to share personal space with them day in and day out may reveal a side of them that proves less polished than their company manners.

Then there is the question of rules and boundaries. When adult children move back home, it generally means moving back under Mom and Dad's rules as well as their roof. When siblings, cousins or friends move in together, things can be more ambiguous. Sometimes it can be possible to sort things out on the fly, but with some people gray areas are sources of trouble. And with friends, it's always possible that differences in your family backgrounds mean that things you would never even thought of discussing will suddenly turn out to be a problem.

If you are a homeowner bringing a non-family member into your home, you may well want to formally delineate the rules of living under your roof and make sure those rules are understood before they move in. If you feel this approach is necessary, it is generally best to start strict and become more lenient if it turns out that gray areas aren't a source of trouble. Starting out laid-back and discovering that it causes trouble, then trying to tighten things up to a more strict arrangement pretty much guarantees resentment and may even lead to loss of respect for your authority as the homeowner.

And if it appears that things aren't working out, it's best to get things dismantled before the petty grit in the gears turns into major aggravations. Friendships have been destroyed for good by trying to make a co-housing arrangement work in spite of evidence to the contrary.