- Pay yourself first--start an emergency fund. If you can, start a retirement account and a college savings account for your kids.
- If you’re fortunate enough to have a retirement account, leave it alone.
- Pay down debt, especially credit cards.
- Stop buying things you don‘t need. You don’t have to have designer clothes, a European car, or the most expensive house, and you don’t have to drink or smoke.
- Take care of the things you have. If the things you have work, don’t go into debt or spend money now to replace them. Take a few cues from Katherine Reynolds Lewis who offers some sound advice on how to cut your cost of living.
- Again, put something away for a rainy day, i.e. start an emergency fund. Try to build up three to six months of living expenses which will give you a comfortable cushion in case you lose your job or see overtime hours cut. You will also be able to cover the unexpected medical bills, car repair, or help for a relative or friend.
- Know the difference between needs and wants and ONLY BUY THE THINGS YOU NEED. You need a roof over your head, food and water, clean clothing, a dependable vehicle, and to maintain your basic hygiene--you don’t have to eat seafood, go to the hairdresser each week, or get your nails done, and you don’t have to have the sexist cell phone. By the way, does everyone in your family NEED a cell phone?
- Shop for the best deals. Clip out store coupons and use Internet coupons. Buy generic foods and medicines. Take advantage of sales, but again, buy only what you NEED. Shop at dollar stores, they have lots of stuff, especially the basics. Take advantage of flea markets, swap meets, and garage sales--lots of good deals here. Buy in bulk (Sam’s Club, etc.). Compare prices, most stores have the unit price printed on a label on the shelf--this is the true cost of the item. Recycle gifts. How? Have an old gift that just isn't you? Don't just let it sit on a shelf or throw it away, give it to someone! Review your insurance policies, compare them with others and choose the one with the best value.
- Learn new skills. For instance, learn how to do small repairs around the house yourself. Patching a wall, fixing a faucet, painting--there all easy things to learn and Lowes and Home Depot offer classes. Increase your skills base on the job--if you're a carpenter, learn how to do small electrical and plumbing repair. If you're a contracts manager, learn how to both administer and let contracts. You should also balance your skills base. If you're a white collar person, pick up a trade such as carpentry, and if you're a blue collar person, learn a clerical skill such as using a computer or bookkeeping.
- Use bartering instead of cash. This is the way our forefathers did things. For instance, you need your car repaired and someone else you know needs a room painted. Why not paint their room and in turn let them repair your car?
- Reduce utility usage. Go easy on the lights and gas by keeping your thermostat set at the minimum level comfortable. Turn off lights and other electric appliances in rooms not in use--and unplug that phone charger! Don't you know its still using electricity even though the phone isn't on it?
- Use public transportation, especially if your job helps pay for it.
Saturday, November 1, 2008
Here are a few simple tips that work!