This guest post from Kimberly is part of the Reader Stories feature here at Get Rich Slowly. Some reader stories contain general “how I did X” advice, and others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity, and with all sorts of incomes.

On May 27th, J.D. published an article title entitled “Social Capital: More Valuable Than Money?”. In the article, he wrote:

You create social capital — mutual goodwill — when you volunteer at a soup kitchen, help your neighbor move a piano, have your Sunday School class over for a barbeque, or join a softball league. Any time you participate in your community, you’re generating social capital, both for yourself and for the other people involved. People with lots of social capital can find help when they need it; those with little social capital can spend a lot of time frustrated and alone.

I’m from a small community in Ohio with about 16,000 people. In small communities, social capital is just a way of life. Everyone helps their neighbors and expects nothing in return. This way of life, that many from large cities may not have experienced, has actually been saving my community — one favor at a time.

A giant sucking sound
At one time, our area was saturated with manufacturing companies. We’re the original home of some of the largest companies in the world. I say the “original home” because during an economic recession, manufacturing is the first thing to suffer. Unemployment is very high in my community, and has been for much longer than most.

When many people picture the town squares in small communities, they see a clock tower, a gazebo, and flowers. When I go to my town square I see The Hoover Company. Well, actually it’s 2010, and now I see a huge manufacturing building that says “The home of Hoover Appliances”, but which locked its doors in 2007.

The closure of the original Hoover plant had a huge economic effect on my community:

  • Thousands of people were laid off.
  • The city was no longer collecting the taxes from the company.
  • The main sponsor for the local schools disappeared.

So, what does a community do when they suffer this kind of economic crisis? They pull together and make it work by making use of social capital.

Social capital is money
Social networking within your own community could be one of the most powerful ways you have to save and earn money, at least if my own town is any indication.

Around here, more and more small businesses are beginning to pop up, bringing jobs and lost taxes back to the community. But they’re bringing so much more. When you invest in your community, it will invest in you.

How much does it is cost you to have four tires mounted and balances at a large chain tire shop? Well, Pete up the road might do it for you in his garage for $20.

How much does it cost you for an oil change at Valvoline? $39.99? Pat’s small business may do it for you for $10.00 if you buy the oil and filter.

Do you need your house cleaned, your lawn mowed, your dog poop scooped, or a baby-sitter? If you take the time to ask your neighbors, your friends, or your family, you’re likely to find someone who’s knowledgeable in the task you need completed, and they might offer to do it for less, saving you thousands of dollars a year.

Social capital in my own life
A few years ago, I was deep in debt. When I started my repayment plan, the first thing I did was look for ways to make more money. I got a second job through my neighbor. I dog sat for my boss while she was on vacation. And I did work for my landlord. By using my social network, I was able to boost my income so that I paid off over $8,000 in credit card debt in less than a year while making just $10 per hour.

Now I work for a large manufacturing company, and I earn a very comfortable salary. I still work at my second job a few nights a week just for fun. I pick up dog poop for my landlord for $35 month off my monthly rent. Every Thursday, I go see “Geno the Pizza Guy”; if I run the counter for him for a couple of hours, I get free dinners.

Due to my neighbors’ generosity, I can have almost anything I need done for much cheaper than a large company would charge. When I need extra money, I do extra work for someone in my community. Although the industry I work in is not secure, my financial future is secure because of my social network, because of social capital.

Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.

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