For those of you who have read my past discussions on "Money Matters" and have enjoyed them, I wanted to add a new thread with some information and resources that I have come across that I wanted to share. For those who haven't read my past discussions, you can search "money matters" in the search box for past entries about couponing, online shopping, auction shopping, etc. Whether diabetic or not, it's important to get as much for your money as possible and it's not only something to consider when the economy is bad.
The statistics of home foreclosures and bankruptcies are staggering. The question is raised if it's the consumer's fault or the fault of the banks and housing market. The reality is probably a combination of the two. Many people went out to buy too much home with too little money and then felt the pinch from the D's: divorce, death, disability, or downsizing. With the drop of income and increased interest rates or maintenance needs the bubble popped leaving the consumer victim. Back in the good old days a 20% down payment on a home was the standard but in the recent years a 3% or no money down loan could be gotten, quite often with an adjustable rate for financing. Was this a blessing or a curse? Many people rushed out to buy whatever size or priced home the banks or realtors said was affordable. Obviously food prices, gas costs, energy bills, and just cost of living was not factored into the equation and the threat of job loss or other financial disaster or distraction was never mentioned.
There are many financial experts out there … Suze Orman, Dave Ramsey, Clark Howard, Gail Vaz Oxlade and others with his or her own teachings of the gospel according to Saint DollarSaver. Although some lessons vary there are many teachings that remain consistent. One of them being to spend less than the household earns and set aside some money for emergency funds. Those experts give ratios of income to spending that vary a few percentages here and there but are fairly similar. Most people should not spend more than 35% on housing; 15% on transportation; 10-15% for debt repayment; and should save at least 10% of income for long-term and emergency needs… the more the better. I've never met anyone complaining about having too much money in reserve or for retirement. Have you?
Getting the most for your money is not always about the price of an item as focusing on the quality and/or value of the product or service. Unless we expect to live like the Amish, it is important to still have a life complete with an entertainment budget. It is not my intent to tell anyone not to buy season tickets to sporting events or to cut your dryer sheets in half to improve the budget. What works for me may not work for you. Your budget should be as individual as you are but it is paramount to live within your means, which means to cut out and cut back on unnecessary expenses to have the money for the necessary.
For those interested in creating a livable and sustainable budget you could use an excel spreadsheet, a napkin and a pencil or an online service like microsoft money or mint.com which I have heard great things about. Budgeting should be about priorities starting with the fixed expenses that you cannot do much about: housing costs, car payments, insurance needs, medical needs, and such and then looking at the variable expenses like food, entertainment, clothing, and such. Now is a great time to look at the amount of your debt because if you have not noticed it is not going away with minimum payments to loans and credit cards. What are your interest rates??? What is your credit score? Did you know those two things go hand in hand???
I am not a financial adviser. I am a consumer, just like you. I have revamped my budget and continue to review it for ways to save and shop around to get the most for my money and I encourage you to do the same. Living within our means is about common sense (or common cents) to get the debt under controlled, save for the future but still to enjoy yourself. As a middle aged person I have seen our societies needs and priorities change since the creation of the credit card. Buy now and pay later has taken over for impulse shopping. One reality is that using a credit card to purchase a sale item forfeits the whole saving of the sale when you add the interest rates and time to repay for that purchase. Stop the insanity! Credit cards can be used wisely or they can create disaster of draining today's income and tomorrow's income to pay for yesterday's treat or need. That kind of disaster cannot happen by using cash. If you can't pay for it, you cannot afford it.
Merchants love cash. They have to pay percentages to the credit card companies in fees in order to accept credit cards. Start to ask for cash discounts or negotiate prices when using cash. Most companies and individuals have wiggle room and that is especially noticeable when a car salesman has to talk to his manager to give you a discount on a car. Come on. Want to see a discount? Offer to pay cash for the car and not pay the financing games with the dealer and their financing department. Sure you can get a 1% finance rate on a loan … IF you have stellar credit. How many of us qualify for that?
Don't be afraid to shop around for the products and services you need and don't be afraid to put off buying the "wants" that you have until you can afford them. Consider buying gently used items (some exceptions apply… don't buy used mattresses or underwear no matter how gently used) and don't be afraid to barter or trade items with families and friends. It's okay to use coupons but only for items you would buy without the coupons. Compare store brand green beans to name brand green beans. May the best man (or woman) win.
There are a lot of money saving websites out there to help you with better planning and spending that I won't go into each of them but a google search can direct you to some new (and profitable) resources that can help you.
In short I encourage each of you to compare sellers using some of the tools that I have discussed in this discussion and in past "money matters" discussions. I'm an avid reader of money tips and the first to boast the benefits of the four C's: Costs, Comparing, Couponing and Codes.
Remember: A hundred pennies saved is a dollar earned.
Next Discussion: Bayer Contour.USB »