Thoughts on Personal Financial Survival

Money has been a huge concern for me lately, for a variety of reasons. Obviously, it has been a concern for many people the past few years given inflation and the current economic situation. Just the other day I was talking to a friend about their need to cut back on expenses so that his wife could quit her job to stay home for a while (for medical reasons). What struck me was that he flat-out said that there just wasn’t anywhere they could cut back.

After asking a few questions, I offered several suggestions. I don’t know if he’ll take me up on anything I suggested. Honestly, I just wanted him to start thinking about the possibility. You see, it’s really only until you open yourself up to the possibility that you can change your lifestyle do things ever actually change. Not that I’m a financial adviser or even very good with money. Really only over the past year or so have my wife and I bothered to scrutinize our finances. Our entire adult lives we just did what we wanted (within a bit of reason) and so long as we could pay our bills, we were ok with it. Man, if only we have a different mindset back then.

Anyway, like many people, we live paycheck to paycheck; we always have and someday hope not to, but until that time we NEED to be more conscious of how and when we spend money. Perhaps you do as well. So here are a few suggestions (this list won’t be all-inclusive, just thought starters):

• If you own a home… REFINANCE if it makes sense. My friend told me he still had an 8% loan on his house; I would think that even with a horrible credit score you could find someone that will do significantly better than that these days.
• Reconsider or postpone any remodeling or upgrades to your home. Most of the time they’re don’t add much–if any–values to the home. Unless it’s really necessary, put it off another year.
• Groceries are often the second biggest family expense. I recently discussed using Sam’s Club for Groceries the other day; in it I figured I cut our weekly grocery bill by about 15-20%. That’s huge! Your groceries are a big place to cut expenses. Look for sales, clearances, coupons, etc. I regularly check the local ads for Target and even Walmart and sometimes find something useful. It only takes a few minutes to look them up online.
• Likewise, eating out can be a huge expense too. I know people that ate out so much they had no idea how much money they spent until they bothered to track their receipts. It was bad. This is an easy one to curb most times. That isn’t to say you should stop eating out altogether, just put the reins on it and limit your outings to say once a week or maybe twice a month.
• Review your monthly bills, especially your tv, internet, and phone bills. You might be shocked at what you realize. I know people who have cut out their cable bill and, since most popular shows are available the next day online, haven’t looked back. Heck, I think they’re even happier watching less tv. I might try this myself. Cell phone bills are ridiculous too. See if you can cut them back with a smaller data plan or perhaps a different carrier. The home phone is a thing of the past. We haven’t had a home phone in years, we don’t miss it, and we get no solicitation calls… ever.
• Switch to a cash-only purchasing scheme. These days it’s so easy to swipe your credit/debit cards for anything and everything. We used to do it all the time. I would make daily trips to the store or Walmart for all sorts of things. I couldn’t even tell you what I used to buy. However, since we’ve switched to a cash-only (for the most part) purchasing scheme, we rarely stop for anything that wasn’t already planned for. Although I can’t offer hard proof, I would say that we have definitely saved money doing so and are likely more prepared because we plan to have what we need on hand. Online purchases, on the other hand, are a bit more difficult to curb given that most sites are more than happy to keep your credit card number on file.
• Try tracking your monthly expenses using software such as Quicken or Excel. We’ve done both but never really did anything with the information. All that ever happened was that once a year I would tally the data and shake my head wondering how we spent so much money. That said, it may work for you and, above all else, give you additional ideas for places to cut back. In particular, the “extra” purchases that may not be necessary but (more likely) daily wants are a good place to start.
• A variety of other ideas I like from beingfrugal.net include: making your own laundry and dishwasher detergents (I do this), don’t use the dishwasher heat dry, turn down your water heater setting, adjust your hvac up/down a few degrees, use services such as Netflix or Redbox, buy less disposable paper goods, menu plan, freeze meals, ask for generic prescription medications (if acceptable by your doctor), cancel the gym membership, review your insurance policies, and so on.
• If you really want to learn to be frugal consider Early Retirement Extreme. The author has many ideas that go well beyond being frugal.