Welcome to the fist installment of my March month long series, How to Survive The Economic Meltdown For The Everyday Person 101. I looked around the other day, and it seems like while everyone else is tanking financially, we're doing ok, on half or less of what many other people are making at the moment. So I started thinking "Why is that?"
Turns out, many reasons. Some easy, others not so much, but all doable by just about anyone. We're doing our best to live within our means, and it's not always fun or easy, but so far has been worth it.
And what exactly does that mean? In most cases, effort. It takes effort to deny yourself something, and believe you me, I know, especially when looking down the barrel of a chocolate eclair. There's lots of things you can do, you just have to try everything and see what works best. Some things, however, are a must, like reducing your debt. First you have to stop creating it, then you have to whittle away at it until it's gone. It may never be gone, but it can definitely be made less of a burden. Here's some of the things we've used successfully so far to reduce our outstanding debt and still enjoy life;
1. Pay yourself first.
I can't stress this one enough. I'd heard this all my life from older relatives, and thought "What a silly outdated idea!" OK, so I was wrong. It really means 'Have cash/money in the bank at all times' which is a really, really good idea. I'm not talking Roth, 401k, money market accounts, etc. I'm talking the most basic of basic. There are a few ways to accomplish this on even the most limited budget. Cash is a good way to start out. For every day spending like food, gas, bus/cab fair, pay cash for anything you can. Now, get yourself a jar or can, and set a 'carry limit' for yourself, like you won't carry any denomination of cash with you larger than X. We started out putting all coinage in our jar. After awhile, it got to be a game, seeing how fast the jar filled up. We now put anything smaller than a $10 bill in the jar, and when the jar becomes full, it's off to the bank to savings. The jar is great for immediate emergencies where you have to have money RIGHT NOW, like for medical stuff, cab fare the day car breaks down an hour before you're supposed to be at work, less diapers in the box than you thought and it's all the money you have access to till Friday, fun things like that. We do sneak a fiver once or twice a year for something naughty, like Starbuck's. It is NOT for things like cigs and beer.
You can get a savings account with very little effort. I started out with a basic no frills savings account at the local branch of a national bank. It didn't pay much in interest (like next to none!) but it was a good place to park some money. We eventually opened a higher interest account with an online bank. We've found this has been a great way to save, since it takes 3 business days to get the funds from the online bank to our local branch national bank, it forces us to think very hard about using it. You will be surprised how fast this adds up to a healthy savings.
2. Limited credit card usage.
Credit card usage like it was meant to be. We try really hard to not use our cards, and to pay off any outstanding balances. Yes, weakness does strike when we see that Ultimate Thing we've been Wanting for Ever So Long. So if we do buy it, then nothing else goes on the card until that Ultimate Thing is paid off. And of course there are the unavoidable things, like my mother's death last year. Had to be dealt with, plastic was the solution at the time. We are still paying off debt from several years ago during a bad spell of no employment. It'll be a few years before that's gone, but it's shrinking, and that's the important thing. Small purchases are used to maintain the cards, like using it for gas and paying the balance every month. This will hopefully keep the credit card company from doing anything really nasty like dropping our limit or jacking the interest. Fingers crossed there, there's only so much when dealing with credit card companies that the consumer can do, except not use them at all, which can be it's own hassle, unless you've got enough cash in a debit account to cover things like rental cars, which need a credit card.
Tune in this week for the next installment, paying down/off outstanding balances.
A Theory
8 years ago
