Money, “the source of all evil”, the major cause of divorce, the bane of our existence. Yet, we need it. We need it to survive, take care of our family and buy pretty things that make us feel good. For most of us, there is never enough money to do the things we need to do, much less the things we want to do. There are many books and articles on how to increase your income, your investments, your earning potential, and while many of them are helpful, they don’t always seem to address where we are now.
Most of us live pay check to pay check and if we have credit, use the credit to supplement our lifestyle; we don’t need a book to tell us that is not good, we know that, but we also don’t know what else to do.
The first way to stop that vicious cycle is track our spending, it is not easy, nor fun, but we must do it. You can track your spending by keeping all receipts then add them up and categorize them at the end of the month, be sure to include your monthly bills in that, all credit cards, etc. Try to get a receipt for everything. If you don’t, you will have to write down your expenses and that can be a hassle. You may have to do this for three to six months to really where you are putting your money. Many of us feel like we don’t have that kind of time; we want solutions now. So what can you in those 3-6 months? Cut Back.
Many of us feel like we can’t cut back any more than we do, but we must try:
1. Cell phone and cable rates change monthly. Call every month until you get another plan that is more cost effective or cut services. Make sure you and your family abide by the terms of the agreement, do not go over your cell phone minutes. Try to get bundles but don’t pay more for services you don’t even use. Even a $10 savings a month is $120 a year.
2. Lock in lower rates for your gas and electric bills when they are the cheapest (for gas it is usually in September or October). When your light bulb blows, buy more efficient bulbs.
3. Limit impulse spending at the grocery store, convenience store, toy store, gas station, coffee venue. This doesn’t have to be forever but if you can limit your spending in these places, you will be less strapped for cash.
4. Cancel subscription or do not renew. Limit children’s activities. Look for freebies
5. Buy off brand items from the grocery store and see if they are satisfactory. Not all items are equal but if you can save on an item without sacrificing quality or flavor, then you should. But it is not a bargain if you won’t use it.
6. Use coupons but only buy what you use. It is not a bargain if you do not use it.
7. Don’t buy specialty foods, they are more expensive and if you must buy that special brand of olives, then don’t buy the cashews too.
8. Buy regular gas and buy it in the week not on weekends, they tend to be higher on Fridays. Fill up each time. You use less gas overall (I don’t know why, but it is true.) Limit multiple trips to the same area. Try to run several errands once on the road.
9. Get regular oil changes, a sick car can be very expensive.
10. The same can be said about nutrition. Buy fruit and vegetables; don’t skimp on these, a sick child is worrisome and expensive. But buy what’s on sale. Don’t buy grapes at premium prices, choose apples instead or whatever is a better deal.
11. Negotiate lower car insurance but make sure you have adequate coverage. Never drive without insurance. The same is true of life insurance and home insurance. Even if it has a larger deductible and a smaller benefit, some is better than none.
12. Call credit cards and banks and ask for lower interest rates and question all fees; sometimes they can be dropped. Pay your bills on time. Late fees are a waste of money.
13. Sometimes, if you are totally underwater, you may need to consider bankruptcy but use that only as a last resort as it is not always the panacea it might seem. Bankruptcy laws have become stricter and it can be very difficult to reestablish credit. Bankruptcy stays on your credit for 10 years and make buying a car or a home or getting a credit card very difficult for the first 3-5 years. Often, those who offer credit will charge you a higher rate so choose Bankruptcy only as a last resort. Bankruptcy also doesn’t guarantee that you won’t loose some of your personal items, no matter what the lawyers say.
14. Remember to give. There is always someone worst off than you. You can give a little money, your daughter outgrown clothes and toys, your time. You will reap good blessings from these acts. Give willingly and lovingly.
Many of us who are on tight budgets know these tricks of the trade and already are doing these, but they still may not seem like enough. So what next?
Find a way to make more money. Use your skills: If you are a teacher, tutor, if you know how to clean well, clean houses, you can pet sit, edit papers, write for Associated Content, work part time at a retail store, watch kids after school, do someones hair. If you need extra money, you may need to find another job so brush up your resume and talk to people about who is hiring. In the long run, you may need to bite the bullet and the expense of learning a new skill or earning a new degree. Apply for scholarships and grants; they are out there. Another way to make money is have a garage sale. You will be surprised how other people will buy what you don’t use or need.
Finally, and most importantly, save. Many of us use credit cards because we don’t have any savings but if we put away a little money at a time even 10 or 20 dollars every pay check it can grow to help us handle Christmas or emergencies better, limiting the need to use credit cards. Find ways to save: make it a game: save your change when you break a dollar, calculate what you save when you use coupons and deposit that in a jar or a savings account, save the money from rebates. Savings are important because it allows you to be less dependent on your next paycheck to live. Use the knowledge you have of tracking your spending and cutting back to create a budget that you can live within and still have money to save. The financial advisors say save first, spend later but when money is tight, it helps to see where that savings is coming from so that you can see why you are sacrificing. Like a diet, if you can see results, you will be more likely to stick to it.
The economy is rough right now and many of us have taken a big hit. We have to find a way to keep our head above water as much as we can because the sharks seem out there to get us. Don’t let them get you. First learn to float then learn to swim so that you can survive. Good Luck.