Tuesday, April 1, 2008

The frugal life, is it just for hard times?

I was reading Carlie's post on how more and more people are jumping on the frugal bandwagon. While that is exciting to me, being the frugal woman I am, I think that some people are doing it because of the recent hype. I hope with all that is happening in our economy maybe a few people will make some changes.

At the end of the post, though, she asked how others are preparing ahead for any bad times ahead. Well, I thought that I would address what we are doing here since my comment was already way too long over there.

This is the comment I left at her blog.

I am not one to listen to all the media hype. Before you boo me, i'm not saying that people aren't feeling a pinch from the jump in the cost of living. We all are! Just remember, the economy has its ups and downs all the time. It's an election year so everything that could be a possible platform for the candidates to discuss is hyped up. It's what draws the ratings up. I am glad that people are starting to take a look at spending habits though. Now, I will step down off of my soapbox.

We have been living frugally for quite awhile. I chose this out of necessity at first, but I live it now because it is a fulfilling way to live. Some of our frugal goals this year are to pay off all debt except for the house, cut back on grocery spending--->done, reduce energy costs, and cut down on our monthly gas spending--->we have cut down on the amount we use, but we are still paying the same amount as before since the prices have shot up. It's always great to be prepared, but don't panic. Use this time to reduce spending and pay off that debt! :-)

As I mentioned earlier in my comment, yes we are coming into some lean times, but don't panic. It is always a wise thing to be prepared for anything that may come our way.

Before I talk about what we're doing as a family, i'd like to share a few traps that people fall into.

The first trap I see is that we, as a society, have become used to a high standard of living. Instead of working and saving for something, we all want to get it now. Why not, when you can make a small payment every month? "Oh, don't worry," some say, "We'll have this paid off in no time. We're due for a raise, or we'll pay it off with our taxes or our bonus." How many of us have said some of these things, but when it came down to it we didn't pay it off? This has increased the panic in many people because they can barely make ends meet now due to the heavy debt burden they carry.

Another trap I see is people spending way too much money in general. I know that for the longest time Scott and I thought we were entitled to spend our extra money. We worked long and hard for that money, so why not! Does that sound familiar? Yes, it's true that we do work for what we have and we do need a little recreational time every now and then. Does this entitle us to spend so much? No.

I know this is not a popular answer, but if you are in debt and living paycheck to paycheck, then instead of spending your extra money, you need to be saving it and paying off that debt. Then you can budget in a little more for recreational spending down the road.

Lastly, people just haven't been taught how to manage a household budget. When I was first married I had no concept of budgeting. At the end of the month I couldn't figure out where all my money went. Frequently we couldn't finish paying the bills eventhough we brought in more than we had to pay out. Many times we were either late on the bills or we used our credit card to pay a bill or buy food. We are still paying for those times 15 years later. Ouch!

So, what can you do to make it through the tough times, or to at least prepare yourself? I'll share with you some of the things we have done and are doing.

1. Put some money into savings, and do it now!
One of the best things we have done is to start a savings account. I don't know many times we would get ahead only to have something else happen that would set us back. How frustrating is that! Now that we have some in savings, if the car breaks down, or the a/c goes out in the house we can pay for it without having to use a credit card! We just start putting back into savings again the next month.

2. Pay off those credit cards
Like I mentioned earlier, we are still paying for mistakes made almost 15 years ago because of credit cards.
Debt is a huge ball and chain. It kept me working when I wanted to come home for many years. We just didn't feel like we could make it on just Scott's income. Between a huge mortgage, two car notes, student loans, credit card debt, most people are drowning just like we were.
Scott and I have a goal to owe on only our house by the end of the year. He is working alot right now so that we can do this. I do everything I can at home to help stretch that money. After we have that paid off we will start putting aside money for a bigger house. I have no desire to have a bigger mortgage, so it means we will be saving for awhile. I'd love to buy a house debt free, but we'll see.

3. Start a budget
This is important. You've got to know where your money is going. It is so easy to spend a little here and there and then before you know it, it's all gone.
While i'm talking about it. Start paying cash for things that you can. I get $150.00 every two weeks for groceries in cash. When it's gone, it's gone. You will spend less if you have just cash, so leave all those cards, including your debit card, at home.

4. Cut back
Where can I save money? Can I cut back on food? What will I need to do to cut back in this area? Maybe you need to learn to cook from scratch more, or how to use coupons, or even start a vegetable garden in the backyard.

To cut back on gas, maybe you need to stay home more or get rid of one of the vehicles.

There are many places in our budgets that can be cut back without making us feel like we are deprived.

If you have to cut back on cable, what can you do that's fun to replace it? Rent movies from the library or redbox. Read a book together as a family. Go outside more. It's not about what you don't have. You might actually be surprised that some of these changes can make your life better.

5. Cut back on energy costs
Change your lightbulbs to CFL's. Turn your thermostat up. Wash clothes in cold water as much as possible. Make sure you have adequate insulation. Put weather stripping around doors, caulk leaky windows. Hang up curtains that are darker so they keep the heat out in the summer and the cold out in the winter. There are many ways you can cut costs here, these were just a few off the top of my head that we have done.

This is just some of the things we have done or are currently doing. while it will still be awhile before we reach our goal, were something to happen we would be able to weather it.

To live a truly frugal lifestyle requires a different way of looking at things than you have in the past. Frugalness is not just for hard times. It is a very fulfilling way to live. One last thing i'd like to leave with you. Eventhough a storm comes our way, just remember that God provides for us. this has proved to be true over and over for us. I just recently wrote on God's provision. Prepare, cut back, pray....but don't fret.


Carlie Faulk said...

Great expansion on my topic. Thanks for "delving" into it deeper! that's why your my partner in crime - lol!

Teresa @ A Life At Home said...

That's me, Mrs. Expounds alot! Umm....maybe too much at times.

D&Xmommy said...

You are right on with everything you said.

Nicole Street said...

Wonderful blog. It really hits home with me. I grew up in a frugal home and although I'm frugal about somethings, I'm not about others. You have got me thinking about other things that could definitely change.

Tara said...

I'm new to your blog and really like what you are saying. Someone asked me recently if I would live a different lifestyle if I won the lottery. I told them we don't play the lottery, but if we came into some money not too much would change.

We love our average-size home and LOVE the smaller than average mortgage. Our car is perfect for our needs with our family and dog and is gas effecient. I clip coupons, shop for bargains, buy in bulk when cheaper, and hit CVS and Walgreens when I can get there.

I said the only things that would change would be our saving plans. I wish everyone would realize that spending more money when you don't need to is not wise. Whether we are in a "crisis" or not, it just doesn't make sense. Thanks for educating everyone, myself included. I can always find new ways to save and look forward to trying some of your ideas.

Kate said...

Bravo Teresa! Such warm and wise words. I just love this post and I will be printing it out for my binder.