Thrifty Times

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Your First Three Days To A Thrifty Lifestyle PDF Print E-mail

Many have found themselves with a sudden need to be thrifty. Whether a loss of a job or loss of extra income, or perhaps the addition of a new family member or some other increased expense or other circumstance has brought you to a point of needing to change your lifestyle and finances. If you are looking to begin a thrifty lifestyle let me give you a few basic pointers.

There is a primary realization you need to come to: only two things can change. First, you can change your income. Second, you can change your expenses. Hopefully your income is greater than your expenses. That is as basic as it gets. Bring in more than you spend.

There are not any magic bullets to shoot at the budget monster. No one (despite promises to the contrary) can give you a simple 10 page report that will instantly have all your budgetary concerns solved. When everything is boiled down the the bare basics it really is a matter of this simple formula. Income minus expenses equals your savings. If your savings is zero or greater you are OK. If your savings is a negative number you are not OK.

So, you will need to examine many parts of your life in order to begin the process of living a thrifty life.Don't expect this to happen automatically. You should plan on a few days to get a good hold on what needs to happen and then a lifetime of learning to be thrifty! But for now here is a simple 2 day plan to starting your thrift life.

Day 1

We suggest you begin with writing out the expense side of your budget. We have many helps for this. You can download a sample budget here:Sample Budget Worksheets Examine your past few months and determine what your expenses have been for the last few months.

For your first evening do not attempt to find all kinds of savings. Just get a clear understanding of what you are spending. Determining your expenses is a good beginning. You may find some of the expense categories difficult to fill in. Do the best you can and try to be reasonable. Putting down $120 a year or $10 a month for car expenses is not reasonable. Be honest - brutally honest is best!

Next, separate expenses into three categories. Needs, Obligations, Wants.

Needs:  Food, housing and transportation as well as any legally bound payment fit into this category. You can explore ways to cut the costs of your needs, but typically those take time. You can move to a less expensive house or sell your car, but these actions take time so don't look to cut these quickly.

Obligations: These are bills and any contracts you are obliged to fulfill. You must pay minimum balances, credit cards, cable, phone, and other obligations you have. Some of these can be cut eventually, but it will take time.

Wants: These are expenses that you have not yet occurred, but are part of your past budget expenses and routines. You go out every Friday night or go to the movies or buy clothing monthly. These are the easiest and fastest to cut, but often very painful and difficult to trim. Most individuals fail to realize the emotional energy it will take to trim the wants in their budget. Many lack the self discipline or emotional energy it takes to actually cut these expenses.

When you are finished with figuring out your expenses and dividing them into three categories you are done for day one.

Day 2

Now, you will need to determine your expected income. For some, this will be very clearly determined. For others this will be a bit difficult to predict. Do the best you can. Once you have determined your income, you must now make the simple calculation of taking your yearly expected income and subtract your yearly expected expenses. Now you have a figure. If your figure is zero or a positive number you are either in good shape or are doing a  poor job on your budget. If your number is negative you now have a goal for how much money you have to trim.

Some are working on this process because you have to be thrifty. Others are working on this project because you desire to save for a specific goal. Others want to be thrifty because you have a deep belief that you should spend your money wisely. For any of these reasons, you will now have a determined figure that will need to be reconciled.

Day 3

Determine possibilities. You may want to examine ways to increase your income or you may want to examine ways to decrease your expenses or a combination of both. Here is where Thrifty Times is helpful. Look through the many articles and discover ways you can save and you may even find some ways to increase your income (selling online, writing good classified ads, etc.) You will also find great articles on how to emotionally face the battle and temptations that will come your way! Once you have your "number" and know the task before you begin to do the research and put into action income and expense adjustments until you get to your target number.

As you examine specific budget categories you will likely find Thrifty Times articles (you can search here: Thrifty Times Searches) giving specific advice on how to save in those categories. Another way to go through the articles is to see the Thrifty Times articles in a blog format. You can do that here: Articles in Chronological Order.

For some starting out your Thrifty life will be in emergency mode, desperately looking for savings. For others, this will be calculated and purposeful to fulfill a desired goal. Either way, I pray you will learn the ways of being thrifty and I pray that the Thrifty Times will be of help to you on this journey.

 

 

 
Two Powerful Money Saving Attitudes PDF Print E-mail

I love saving money and I love to enjoy life as well. Sometimes I feel like these two "loves" are in conflict with each other. If a friend suggests we go see a movie I want to jump at the opportunity but I flinch at the $11.50 price. I love vacations and visiting fun attractions, but again, the price tag on some destinations is staggering. When the newest tennis racket is advertised I immediately begin to wonder if I am missing out on better, more satisfying play. At times it appears as if all of the fun experiences come with a huge price tag. Many who can afford these attractions will buy into the belief that they are really buying some wonderful and fulfilling experience. Those who cannot afford them may be sad or even bitter that they are somehow being denied. But both may have fallen into the clutches of effective but deceptive marketing.

Do we really have to pay for enjoyment or pleasant experiences?

Obviously those who have invested millions into making movies or designing attractions or new tennis rackets want to make sure that those movies, attractions and new equipment are front and center in our thoughts and minds. It is their goal to get us to spend the money and pay for these attractions. Their advertisements attempt to get us to believe that we will not be fulfilled or will somehow miss out on a wonderful experience if we don't spend that money.

But now that my wife and I have raised 4 children, looking back at all the "fun" times, my children are not mentioning the movies, attractions or new equipment! Instead {quote}they are talking about the camping trips with our church friends or the times they hung out after church waiting for us to finish talking.{/quote} This past week my daughters were talking about how we would go to Culvers Custard, buy one hamburger or a small custard and sit for an hour with a few other families. They reminisced on how our son would organize all the kids in the neighborhood to play a game. {quote align=right}What struck me about my children's "fun memories" is that they all revolved around enjoying simple times and being with people!{/quote} These fun memories involved free or inexpensive activities.  Even the camping trip and eating custard were very inexpensive.

After years of working with individuals I have isolated two powerful attitudes that will help you save thousands of dollars! They are simple, but without them people will always find a way to spend more.

Attitude #1 - Enjoy What You Already Have

Attitude #2 - Enjoy The Moment

When talking with people who have severe financial problems I am always struck by two attitudes that seem to complicate their being able to get their finances under control. First, they always want more and more because they have not learned to enjoy what they already have. And second, they have not learned to enjoy the moment, and thus never learn to enjoy what is less expensive or even free!
In past issues of Thrifty Times we have offered dozens of suggestions on fun and enjoyable, inexpensive and free activities. Many of these can replace expensive options. (see Enjoy Your Library, National Parks, Fun Outside Activities For Kids, Alternatives to Expensive Vacations and many more) Yet if you have not learned to enjoy what you already have and to enjoy the moment, there will always be a desire to figure out a way to get the enjoyment you think you are missing. Because of the advertisement industry, more often than not you will look to satisfy that longing with something that costs money.

  • Proverbs 12:27 "The lazy do not roast any game, but the diligent feed on the riches of the hunt."
  • Luke 12:15 "Then he said to them, 'Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions.'”
  • I Timothy 6:6 "But godliness with contentment is great gain."

Years ago I took up golf so I could play with my wife. Because I am a learner I bought a few magazines and looked into specific methods so I could reasonably improve my game. I even had a few chances to watch the golf channel on cable TV. I was shocked to see that the makers of golf equipment are always trying to sell you the latest greatest gadget and clubs. While I no longer golf, I do play and coach tennis. Again, the makers of tennis equipment are always trying to sell you the latest, greatest rackets. Funny thing though, you can buy last years equipment for a fraction of the cost! (Yes, when I bought my new racket I purchased a year old model for 60% off!) The whole drive is to get you to no longer be content with what you already have. If we could just learn to be content and we could save a great deal of money!

 

 
Overwhelmed By Credit Card Debt PDF Print E-mail

by Gary Foreman

Dear Dollar Stretcher,

My credit card debts are really beginning to hurt. Seems like I can choose to keep up with the minimum payments and forget feeding the kids or I can feed the kids and let the cards go late. What should I do? Each month it's getting a little harder to make ends meet.

Overwhelmed Dear Overwhelmed,

You're certainly not alone. A tough job market combined with rising food and gasoline prices have made it difficult for many families. Of course the fact that others share your plight doesn't make it any easier. So let's see if we can put together a strategy to reduce the pain of monthly bills.

First, determine the cause and seriousness of the problem. The credit cards may only be the symptom. Not the cause. One way to find out is to determine how you built up the credit card debt. Was it something temporary? Like a short period without a job? Or is it that you often spend more than you make each month?

If the problem is that your monthly expenses are bigger than your income, the first step is to get them in line. Failure to do so will doom any attempt at controlling credit card debt.

Next, take a look at the total of your housing and auto bills. If you're spending more than half of your disposable income on housing and auto you probably will find yourself short of money at the end of the month. And, that's when it's tempting to pull out the plastic to cover the shortfall. Again, failure to get home and auto expenses in line with your income will cause you to fail in getting your credit cards in line.

Once you've eliminated chronic income vs expense issues it's time to evaluate the credit card debts. We'll begin by sizing up the problem. To do that we'll compare the total of all your minimum payments to your monthly take home pay.

Credit card minimums that consume more than 10% of your income will be a problem. That's the level where they'll begin to crowd out other expenses. You'll need to take corrective action quickly. Once you begin to miss the minimum payments the problem will quickly spriral out of your control.

Begin by looking for ways to pay down the debt. Is there some way that you can increase your income temporarily? Maybe a part-time job. Or renting out a spare bedroom. Anything that could be applied to paying down the credit card balances.

Also, look for ways to raise cash. Everything from garage sales to selling collectibles.

It's not a step to be taken lightly, but you may find it advantageous to borrow from your 401k plan. Paying off a portion of the debt will reduce the monthly minimums.

If the total debt is over $10k and you can't figure a way to pay it down, you'll want to consider credit counseling. They're the firms you see advertising with offers to help you reduce your bills.

One of the two trade associations is the best place to look for a reputable credit counseling company. Check out the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies . Expect counseling companies to charge a monthly fee for their services. Compare the fees. Some charge more than others.

They'll try to do three things for you. Reduce your monthly minimums. Typically by about 10 to 20%. Be cautious with firms that promise more.

They should also get you lower rates. Especially if your rates were jacked up. Expect to find a rate near 10%.

Finally, the status of your accounts with the credit bureaus will likely be changed from "delinquent" to "current."

FICO states that your credit score will not be affected, but the fact that you're in credit counseling will appear on the record. And, that might make it difficult or more expensive to get other loans (think car or house).

It could be that even the reduced minimums are too big for you to handle. In that case bankruptcy might be your only workable option. But, that's not a step to be taken lightly.

Bankruptcy will make the credit card bills disappear, but your FICO score will drop 130 points or more. And it'll take years for it to gradually recover. You'll need to contact a qualified bankruptcy attorney to get the details.

Facing credit card bills that are beginning to crowd out other expenses is difficult. But the sooner you face the problem the more options that are available and the better your chances to minimize the financial pain.

Gary Foreman is the editor of The Dollar Stretcher.com website and newsletters. Click here for information about borrowing from your 401k. You can contact Gary at gary @stretcher.com

 
Surprising Alternative To Expensive Vacations PDF Print E-mail

 

Before you know it summer will be here and many will embark on a fun summer vacation.  Of course there are the huge theme parks and expensive cruises along with well established and pricey beach destinations.

If you are like the many families that have either been hit hard by the downturn in the economy, or you have come to realize that more money does not equal more fun, then you may want to check out the US National Park Service!  I know what you are thinking, aren't they filled with old guys with funny hats giving boring lectures about someone no one has ever heard about?  Actually, NO!  There are museums, lakes, reservoirs, shorelines, archeological sites, historic structures and more! Many of the parks have special programs for children.  Here are the National Park Service's own statistics:

  • 11,700,000,000 visitors
  • 121,603,193 objects in museum collections
  • 84,000,000 acres of land
  • 4,502,644 acres of oceans, lakes, reservoirs
  • 85,049 miles of perennial rivers and streams
  • 68,561 archeological sites
  • 43,162 miles of shoreline
  • 27,000 historic structures
  • 2,461 national historic landmarks
  • 582 national natural landmarks
  • 393 national parks

1 mission: The National Park Service cares for special places saved by the American people so that all may experience our heritage.

Many of these parks are free or very low cost.  You may want to plan a vacation around a national park or you may be looking to fill some days with less expensive fun on a vacation you already have planned.  Either way, you should check out the beautiful parklands.  While discovering America's beautiful parks you may also have time to discover something else.  Vacation enjoyment does not depend on the outlay of large amounts of money!

Check out different National Parks here:  http://www.nps.gov/findapark/index.htm

 

Are you an Amazon Prime Member? You can watch Ken Burns Documentary on National Parks for FREE! Click below to see details:

 

 
Do Coupons Save Money Or Tempt You? PDF Print E-mail

Let’s face it.  Some individuals are addicted to shopping.  Along with that addiction is a secondary, related addiction.  Getting a great bargain.

These addicted souls stalk the retail isles and advertisements looking high and low for a great deal.  Once they find it, they revel in their victory bragging to the world on how they have saved “hundreds.” {quote align=right}If you are one of these shopping\saving addicts, my advice to you is to put the coupons down and slowly step backwards{/quote} until your coupons are out of site! As with any addictive behavior what is seemingly good, can be used as an excuse to fulfill the addiction.  Coupons are not a mode of savings for this individual, but a trap to lure them back to their addiction.

However, for many non addicted, budget challenged individuals, coupons are an excellent way to trim some needed cash from one’s budget.  With an increasing number of coupons for free items they are also a “safe” way to try out new and interesting products before sinking hard earned cash into an unproven product.

But let’s be realistic on how much we really save with coupons.  This past week I needed some sour cream. I grabbed a coupon for a brand I have used in the past. At first glance it looked like my coupon was an excellent deal -$1 off! Of course I would have been thrilled if this item was on sale, but unfortunately, a different one was on sale. When I compared prices, my coupon brand was 70 cents more that the sale brand. I bought the coupon item to save 30 cents.  Even though the $1 amount on the coupon may lead one to believe that they are saving $1, in reality I was only saving 30 cents. Don’t get me wrong – {quote}I like saving 30 cents!{/quote}  It is just that I like to be honest with what I am really saving.

Be careful not to frustrate your family. If your family does not mind using different brands, or the coupon is for a product that does not seem to change between brands, then go ahead and use the coupon.  However, be careful not to switch brands to the detriment of your family. When my children were young they had reactions to certain laundry detergents.  If my wife switched detergents with every coupon that came out my poor children would have gone crazy.  However, we always kept our eye out for coupons for the brand we used!  If you see coupons for your favorite brands you would be crazy not to use them.

Finally, if you have a small budgeted amount each week for special “treats” then coupons can help you stretch your treat budget.  {quote}If you don’t buy ice cream very often and decide to treat your family, look for a great coupon to help save money{/quote} on these special items.
Coupons can be a real help for tight family budgets. Be realistic on how much you are really saving and make sure you are using them to save rather than an excuse to spend.

BTW – check out our free printable coupons!  Now with a “quick print” option with no sign up needed.  Print Coupons For Free

 
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