From the price at the pump to the tag on toothpaste, consumers are feeling the pain of rising inflation. This is especially true for families and individuals below the poverty line or on fixed incomes, and is particularly challenging for those who have struggled with homelessness. Hillcrest Transitional Housing understands the importance of financial management and budgeting during lean times. An “all needs, no wants” budget is one of the cornerstones of Hillcrest’s work transitioning individuals and families out of homelessness and into self-sufficiency.
“Our work centers on helping residents break detrimental cycles, and replacing those cycles with habits that lead to positive outcomes,” said Tom Lally, Hillcrest President and CEO. “Financial instability is the number one issue we deal with. Families need to work within their income by reducing expenses where they can, increasing income through better opportunities, building up an emergency fund, and changing spending habits that work against thriving in a secure, housed, and healthy environment.”
Last year, Hillcrest served nearly 1,400 individuals through its various programs. Hillcrest’s flagship program is a 90-day time frame in which clients receive rent- and utility-free housing. In exchange for that housing, clients agree to follow program guidelines, find and maintain full-time employment, attend life skills classes, participate in community living, and strictly adhere to a budget plan while paying down debts and building up savings.
Patricia Rader has seen how Hillcrest’s process works and changes lives for the better as Hillcrest’s Director of Programs. “I am a firm believer that our program’s success has much to do with the time we spend focusing on budgeting with our residents,” she said.
Rader tells of one client who came to the organization homeless and laden with debt. Through the Hillcrest process, the client only spent on what she absolutely needed, and used the excess income to pay down debt quickly. After debts were paid, she began saving up for a down payment on her first home.
“Developing a budget is essential to financial success,” said Rader. “Being clear about what finances are coming in and going out gives individuals a sense of power over their lives.”
According to the U.S. Bureau of Labor Statistics, the consumer price index is up 9.1 percent over the last 12 months. It is the largest 12-month increase since the period ending November 1981. Some of the most basic living expenses – like gas, shelter, and food – have seen the highest increases, affecting the financial stability of not just the housing insecure, but families and individuals at all different income levels and life stages.
“Budgeting is no longer a need just for those with limited incomes,” said Lally. “We are all impacted by rising prices, product scarcity, and challenging times.”
Pulling from its program playbook, Hillcrest offers a few tips for those looking to create or revise their household budgets to adapt to the current economic environment.
First, asking if a purchase is a need or a want will help curb spending on unnecessary items. “Stick to buying the needs over wants,” said Rader.
Being able to visually look at spending habits is also very important, she said. Putting a budget into a spreadsheet, going through a checkbook ledger, reviewing bank logs, and regularly reviewing those items will help identify areas where excessive spending is happening. Thirdly, admitting when a mistake or unnecessary purchase was made will help the learning process.
“Be cautious of split-second decision making and purchases,” said Rader. “Think through what you are doing and be contentious of trigger spending.”
Saving money by buying generic brands as opposed to name brands, or buying previously owned items over new, will also help stretch finances. Thrift shops can be a savings tool by offering gently used name brand items at lower cost. Hillcrest runs thrift stores in Lenexa and Lee’s Summit, the proceeds of which help to support the programs at Hillcrest Transitional Housing.
Finally, employing willpower, self-control, and a desire to change is crucial in changing spending habits. “You have the power to change your financial situation,” said Rader. “Know that you can do hard things!”
Hillcrest serves youth, individuals, and families throughout the greater Kansas City region through its five residential sites in Johnson and Wyandotte Counties in Kansas and Jackson County in Missouri. Hillcrest also provides rapid re-housing services in Kansas City’s Northland and in Northwest Missouri. To learn more about Hillcrest Transitional Housing, visit www.hillcrestkc.org or call (816) 994-6934.