In God We Trust

Teaching You How to Get OUT of Debt and Live Debt-Free

Archive for the ‘Saving Money’ Category

Jan
7

by Sandi

Actually, John was talking to me a few days ago and said, "Eventually, stuff becomes junk."  I’ve been giving a lot of thought to those words over the past few days, and it is such a true statement.  Not willing to just mull it over myself, I have speculated with others. and no matter what stuff you have, in the end it becomes junk.  My friend pointed out that things like family heirlooms, photographs, and great paintings never become junk.  The truth is, that even these precious items will eventually reach someone that sees no value in them and simply disposes of them. 

Think about when your great aunt somebody passed away, and her great nieces and nephews cleared away the accumulations of her life.  Photo albums, clothing, and an entire household of collectibles and possessions were offered up in an estate sale.  What was left was donated to charity and hauled to the dump.  Stuff becomes junk. 

I, myself, have a lot of stuff that is still brand new, and is already becoming junk.  I have a bolt of upholstery fabric that I purchased about 15 years ago to re-cover a favorite couch.  I didn’t get around to it right away.  Even though the fabric is brand new, and the highest quality I could afford, the couch it was intended for is long gone, and the fabric is so out of fashion.  My fabric is very close to becoming junk.  In fact, it already is, but I just haven’t admitted it yet.

I have other stuff rapidly turning to junk.  A pretty dress bought for a Christmas party years ago, and now a size too small.  Then there are some shoes that I loved, but they always hurt my feet, so I haven’t worn them in at least a year. 

I have craft supplies to make things that no one wants, and tubes of fabric paints that have dried out.  Clothes no longer in fashion.  Decorative pillows that are faded or the wrong color.  Yard and garden accessories and tools rusting away. 

Once, all these things were things I wanted so badly that I traded money for.  In some cases, I put the purchases on my credit card.  At the time it didn’t even cross my mind that I was just buying stuff.  What if I had just given a few minutes thought to all those things I purchased.  Looked forward a bit to try to figure out if that stuff was going to become junk before I even got a chance to enjoy it. 

What if you gave a bit of thought to your purchases.  You are purchasing stuff that eventually become junk.  Is this junk something you are willing to get into debt to own?  Try this for a few weeks or months.  Before you purchase something, try to figure out how long it will take before it becomes junk.  Then ask yourself if you really want it?  I’m betting that you will develop a whole new attitude about buying stuff.  And, if you buy less stuff, you will be able to accelerate getting yourself out of debt and saving for things that are really important.  Things like a college education for yourself or your children.  Things like donating money to help animals or people in need.  Things like a home for your family or a vacation that your children will never forget.

Stuff becomes junk.

Dec
3

Actually, saving money is much easier than making money, and the end results are even better. 

Consider this:  You are shopping and see a shirt on sale.  It’s not your best color, but you do have at least three pairs of pants it will go with, and the price is unbelievable.  It was normally a $40 shirt and is now just $10!  Even though you don’t have cash with you, you simply cannot pass on this deal, so you dig out the credit card and purchase the shirt immediately saving $30!  In actuality, you didn’t save anything.  You spent $10 on something you didn’t need.  Unless you pay your entire balance on your credit card purchases by the due date, you will also end up paying interest on that shirt for the next 15 to 25 years.  WOW!  What a bargain!  NOT!

Saving money starts with simply not spending it.  If you make an impulse purchase or need to rationalize your purchases, you are literally throwing money away.  You need to define the difference between needs and wants, and begin to eliminate the wants from your purchasing.

Needs

In order to survive everyone needs food, water and shelter.  Everything else falls into the want category.  This sounds a little harsh doesn’t it?  I’m not advocating that all of you eliminate everything else from your lives, but to begin recognizing the differences between needs and wants. 

Let’s look at the need for food.  You need a balanced diet to survive and stay healthy.  A family of four can purchase all the necessary items for a tasty and balanced diet from a moderately priced grocery store for $300 to $500 a month.  I’ve done it for far less during tough times, but let’s allow for big appetites.  If you are spending more than this, you are going well beyond needs and getting wants.  Drive through and take out restaurants are not usually healthy, and will take a disproportionate amount of your monthly food budget.  You may rationalize fast food… too tired to cook, don’t have anything in the house, kids want pizza, etc., but these are wants, not needs.

You need water… not bottled water which is expensive and bad for the environment, but you should drink lots of water all the same.  If your tap water is bad tasting or you are afraid of contaminates, purchase an inexpensive but efficient water filter for your home.  I keep tap water in pitchers and water bottles in my frig so I can have cold water handy.  Needs versus wants.

You need shelter.  Shelter can include your home, clothing, and your heating and cooling costs.  So many people live in houses or apartments that are far too big or deluxe for their income.  If you are spending more than 1/3 of your income on housing, you are satisfying wants, not needs.  The housing market problems and foreclosures happening all over the country right now are a result of too many people trying to purchase homes well beyond their ability to own or maintain.  Many of you have already been affected by this, and many more will be feeling the pain within the next couple years. 

You can save a huge amount on utilities with just a few simple changes.  Turn off lights when you leave the room.  Keep the thermostat down (or up) depending on the climate and time of year.  Add (or remove) layers of clothing.  Lower the thermostat on your hot water heater.  Take shorter showers, and don’t let the water run while you brush your teeth or shave.  There are so many more little things you can do, and almost every utility company has cost savings suggestions on their web sites. 

I included clothing in the shelter part, because we need clothing basics to cover and protect us from the elements.  Two or three basic outfits for each season of the year are necessary.  You probably need 2 pairs of shoes if you are employed.  One for work, and one for "play".  If your work place requires a suit or dress clothes, you need two or three basic outfits for work.  That’s it kids.  The rest of the clothing you buy or own is simply to satisfy your wants. 

Wants

This one is easy.  From that cup of "fourbucks" coffee you purchase on the way to work, to your stop for dinner on the way home fits into the want category.  Cell phones, cable TV, daily newspaper, books and magazines, almost everything you spend money on fits into the want category.  The only want that is hard to get is this:  I WANT to save money and get out of debt.

Knowing the difference between needs and wants

Only you can dissect your spending into needs and wants.  I can’t do it for you, and neither can your spouse or best friend.  You need to make a decision and then begin to track all of your spending for at least 1 month.  Write down everything you purchase or spend money on.  Include all payments on all debts as well.  At the end of each day, honestly examine your expenditures and write down whether it was a need or a want.  If you are completely honest with yourself, you will find that almost ALL of your purchases are satisfying wants, not needs.   Once you define the difference between wants and needs, you will begin to find it easier and easier to give up some of the wants.  This is the biggest and easiest way to begin saving money. 

If you are reading this, it must be because you recognize that you are having difficulty.  Take me up on this challenge.  It will make a difference.

Nov
29

This time of year, I’m constantly reminded about how difficult it is to handle the additional expenses of the Holiday season.  Most of us want to make the gifting season special.  We want to purchase that perfect present for our children, spouses, parents and everyone else on our list.  We have more entertaining challenges, from hosting dinners and parties to attending the office Christmas party with yet another new outfit. 

Once again, our failure to plan and save has us digging out the credit cards and spending more than we should, plunging us further and further into debt. If only there was an Extra Money Fairy Godmother that would swoop into our lives and provide a few hundred dollars when we need it most.  

Believe it or not, all of us has that Fairy Godmother living in our household.  Every member of your household from 2 to 90 years of age has the ability to either save or make money.   By now you are probably beginning to think I have no idea what I’m talking about.  How could a 2 year old make or save money?  Do I send my 90 year old father out to flip burgers or welcome shoppers?  In order to make or save money, we need to redefine making and saving. 

Making Money

Most of us think of making money as having a job, or in some cases more than one job.  While that is probably the most common method we can use to make money, there are so many other methods we can use to bring a little extra cash into our lives.  I intend to offer many ideas and plans over the next few weeks and months for members of your household to make a little extra money to contribute to the family finances.  Making money is usually done best by family members from 8 to 80.  You just need to keep in mind that the amount of the contribution will be in direct proportion to the age and mental capacity of each family member. 

Saving Money

Saving is not just placing a portion of our income into a savings account or piggy bank.  Saving money happens every single time you don’t spend as much. For example, while thousands of people swear by coupon clipping, that is only the tip of the iceberg in saving.  I seldom clip coupons, but save money on almost all my purchases just the same.  As I said earlier, even a 2 year old can contribute to saving money, and I hope to show you many different ways you can save. 

Using Money

This part seems pretty silly!  You probably don’t need any help at all in using money.  BUT, (you noticed the big but) I did say using money, not spending money.  If we use our money with forethought, we will be able to make it do so much more for us than if we just spend it.  In the processes of using money that I hope to discuss in the months ahead, you will find methods to actually enjoy spending your money because you know that the choices you are making will also contribute to your future security.

Comments

I am going to encourage comments and questions from all of you.  Every person reading this blog will have tips that others can use, and questions about the procedures and processes that might apply directly to your personal situation. 

Sandi