A struggling economy means many of us have to try hard to stretch our paychecks.
With the housing market downturn, high gas prices, and increasing food costs, I am always on the lookout for ways to make my paycheck go as far as possible for my family. So when I stumbled across an article on Yahoo! Finance by Lisa Smith titled 5 Strategies For Surviving Tough Times, I wanted to share and comment on the tips.
~ Don’t Buy What You Can’t Afford. The new Apple 3G iPhone comes to mind. Last Friday, people in every city in the U.S. stood in line for up to 24 hours to pay $400 for phone! I’d be curious to know how many of the people that stood in line paid cash and didn’t just slide the plastic and worry about paying it off later.
~ If You Can’t Pay Cash, You Probably Can’t Afford It. Take Lynnae’s advice and freeze your credit cards in ice and just pay with cash. It would make it much harder and way more inconvenient to buy stuff you can’t afford if you don’t have credit cards. I urge you to try and only pay with cash for 1 month and see if your spending decreases.
~ Paying Interest on Anything Makes Somebody Else Rich. This makes sense, but I would also add that just because you can get 0% interest financing on a purchase does not mean you should buy it. I learned this the hard way when I bought my truck a few years ago. I justified the 0% financing as a reason to upgrade my purchase to a bigger and more expensive truck. Stupid thinking. Now I have a big ol’ truck that I really don’t use to it’s full capability and it costs me a small fortune to fill up at the pump.
~ If You Are in Debt, Stop Spending Money. Easy to say, harder to actually implement. This is where I think it is important to separate your needs from your wants. Food, clothes, and shelter are the big necessities. But curbside trash service is a want if you can take your trash to the dump once every 2 weeks for half the price.
My wife and I put all our wants and needs, and their associated costs, in an Excel spreadsheet and by doing so were able to easily see where our money was going every month. From there we started slashing the “stuff” and services that were wants or luxuries. For us that was satellite TV, pest control service, and curbside trash removal. All stuff we could easily do without. All money saved went directly to paying off our credit card debt.
~ Don’t Count on Somebody Else to Save You. The article refers to the government coming in and bailing you out if you get in financial trouble, and how that is not a sound way of thinking. Instead, start working on building up an emergency fund so you can weather the storm if your car breaks down or you get laid off from your job. Personal responsibility for your finances is what will eventually win the race and give you a great sense of accomplishment.
Please feel free to add your tips for surviving a struggling economy. I will go ahead and toss in # 6, which is to use coupons whenever possible. Both online coupons and coupons at the grocery store. After all, money saved is money earned. Here are a few of the most used coupons on my website right now.
**Note from Lynnae: The Children’s Place is having a killer clearance sale right now, and shipping is only $5 for any size order. Now is the time to stock up on kids clothes for next summer. Kyle’s Coupon makes the sale an even sweeter deal!**
American Eagle Outiffters.com
Save 15% Off your entire online order
Coupon Code: 23976814
Expires: 7/18/08
See All: American Eagle.com Coupons
Children’s Place.com
Save 15% Off your entire online order
Coupon Code: FA78
Expires: 9/02/08
See All: Childrens Place Coupons
Drapers & Damons.com
Get Free Shipping on your entire online order
Coupon Code: P1907
Expires: 8/10/08
See All: Drapers & Damons Coupons
Fingerhut.com
Save 50% Off already reduced Clearance Items
Coupon Code: EF116
Expires: 7/20/08
See All: Fingerhut Coupons
Hanes.com
Get Free Shipping on your entire online order
Coupon Code: KIDSUW
Expires: 9/30/08
See All: Hanes Coupons
Montgomery Wards.com
Get $10 Off your online order of $100 or more
Coupon Code: MWAFJULY8
Expires: 7/31/08
See All: Montgomery Wards Coupons
PetSmart.com
Save 15% off your $65 or more online order
Coupon Code: SAVEJUL
Expires: 7/31/08
See All: PetSmart Coupons
Shoes.com
Save 15% Off your online order
Coupon Code: JULYSAVE
Expires: 7/31/08
See All: Shoes.com Coupons
Wine.com
Save 10% Off a 12 month Wine Club Membership
Coupon Code: SUMMERCLUB
Expires: 8/31/08
See All: Wine.com Coupons
Photo by preciouskhyatt.
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Actually Apple didn’t let anyone pay with cash! You had to use a credit card or a gift card.
This may not be appropriate for everyone, but I’d also suggest putting any “extra” money into your emergency fund/high-interest savings for that really rainy day.
Ugh, those evil American Eagle discount codes making me want to shop… ;) Well, with my order I just got, they’ll give me free shipping if I spend just over $50, so maybe next month I’ll get more “school clothes.”
Anyhow, it’s a good list of tips, but many of us reading it here already do a lot of the stuff… It’s sad to think that what’s second nature to some is just dawning on others. (Like using coupons or not using credit cards.)
Wow, I applaud the “If you can’t pay cash you can’t afford it” rule. I am not hard and fast against credit cards, but I definitely believe they are misused, even abused by most of us. It’s all going to come around and bite us in the rear in the end too lol.
Thanks for the coupon links!
These are goog strategies for tough times, and to keep on using these strategies when the economy turns around. I know housing is in dire straits, but that came off the “bubble”, but other wise the economy was up last quarter and unemployment is still low. We are not in a recession, but the media keeps talking about that.
All Common Sense and I use them ALL the time, not just when times are tough…. Actually, if you use them ALL the time, times DON’T get tough! :)
If more people would follow them, there wouldn’t be so many people in so far over their heads!
My addition to the list above: JUST SAY NO! and Take Responsibility!
Good post!
I am in such agreement with those steps. The using of cash envelope system has been our number one way to stay on budget…It is a must do if you really want to make a big adjustment.
My only slight disagreemant would be to chop up the Card (except a debit card)just don’t close the accounts. If a real emergncy arrives most card companies will get you a replacement within 24 hours!
I just prefer the call vs Thaw! 9 months w/o 1 cc card charge here!
Getting out of debt is difficult, and it starts with changing your way of thinking. Kyle is correct in stating that if you can’t pay cash, you can’t afford it. Can’t bring yourself to take that credit card out of your wallet? Tape a note to it with your outstanding balance, & what your monthly payment is.
So far we have had to use plastic for emergencies a couple of times, but we’ve put the kibosh to using it for routine purchases and big box items that we really can not afford. Our goal is to have enough cash on hand to handle those issues adequately.
That has been our main downfall in our financial life, and it’s one that we are beginning to turn around.
I like the idea that curbside trash pickup is a want rather than a need. I bet a lot of people haven’t thought of that as something that could be eliminated… I know some areas charge based on how much garbage you put out, so focusing on limiting your trash to one bag a week could help too.
@Frugal Babe – Our local garbage pickup is a minimum of $24/month for one pickup a week. The local dump/transfer station is $10 for up to 300 lbs. The dump is about 3 miles from my house, and includes recycling centers. All recycling is free.
You can bet I haul my own garbage :) which after recycling, (and paper in the woodstove) amounts to about 2 grocery sacks a month.
What a great article. As many know, some of us have been doing it for a LONG time. Another tip is to start a “coupon club” and have friends and neighbors get together once a week (?) for coffee, conversation and exchange coupons. Not only do you get the support that you are not alone in the tough economic times, you actually can save money by exchanging coupons and ideas. And many of the young moms exchange baby items and cloths to avoid purchasing new. a Win Win situation and you can make new friends from people that normally you would never get together with. Good Luck.
Hi from New Zealand.Yes it’s biting bad here too.
We dry all our washing either inside on racks or outside where there’s a cheap pergola erected over the clothesline. Even when it’s raining the washing can be drying.
When we boil the jug, we put the excess water into a thermos flask, quick to reboil and stays hot for hours.
It’s winter here and I have a crockpot full of sou all the time. I keep the ends of the read (which the kids don’t like eating) and freeze them. when there’s a good pile, I put marmite or vegemite ( a vegetable yeast spread on the bread and a bit of grated cheese and bake them in the oven. Goes really well with soup and costs just cents to feed the family. Whatever vege is cheap I buy for soup.