Can I Have This?

We have asked two questions:
“How thrifty have you become?”
“What is your plan to pay off your debt?”
We ended the last blog with, “We are going to look for some ‘thrift’ to trim the fat from the budget so we can ‘afford’ to pay off debt.”

Examine the first question. This plan (budget) reflects the priority of paying off debt.
1. Giving
2. Pay Off Debt
3. Mandatory Expenses
4. Expendable Expenses
5. Slave Expenses
6. Exigent Circumstances Expenses

Let see if we can find some ways to be thriftier and ‘find’ the money to pay off debt.
Mandatory Expenses include rent, car insurance, utilities, water and phone. There does not seem to be any money to trim out of this, or is there?

One can ‘shop’ for car insurance. There are competing companies out there that ‘promise’ to save money on car insurance. Shopping among ‘reputable’ companies may find a less expensive insurance policy. One expense to eliminate is the finance charge on insurance. If one pays monthly premiums, one pays finance charges. If one plans (budgets) to put aside the money to pay for car insurance in a lump sum, one can save on finance charges. One paying for insurance in 6 month increments can save money by just paying the last two installments at one time.

If utilities and water are not included in the rent, look to them as a source of savings. There are plenty of ‘savings’ tips available, utility companies usually include them in their monthly bills. Tips like turn the water heater down, turn off lights, and use appliances at off-peak hours all save costs. (One ‘favorite’ is the ‘frig. It costs more to cool an empty refrigerator than a full ’frig. If the frig is partially empty, keep a couple of gallons of water in it.) Most utilities have ‘annual average’ programs, where one’s utility costs are averaged over the year, and payments are made on the ‘average’ not on the actual usage. This program is usually free, and coupled with conserving, can help one budget more effectively. [My utility bills ranged $50 high to low, before joining the program. Using the program, and conserving, the first year ended with a $2 utility bill. The money budgeted was obviously higher, it went to pay off debt.] Water is the same. Use conservation recommendations. They really do work. Money saved is money that pays down debts.

Home Phone is a mandatory expense (for most). If one has a cell phone, make a decision. If the cell phone is an absolute necessity, paid for by the individual, and has a service contract, consider discontinuing home phone service. If one has a home phone, discontinue long-distance service. Buy a long distance rechargeable ‘phone card’. One has to dial ‘additional’ numbers to use a phone card, but with today’s ‘speed-dial’ features, one can program a phone with the numbers. Decide how much one can ‘afford’ to spend on long distance every month, and charge the phone card with that amount (phone card recharge rates vary from 3 to 7 cents a minute). Use of a phone card budgets the long distance expense into a ‘known’ quantity. There are no ‘surprises’ when the phone bill arrives. It is amazing how much one can save using a phone card.

Expendable Expenses include food, clothing, and comfort items. There is money one can save, especially in the food budget. ALWAYS eat a meal or have a snack before grocery shopping. Make a grocery list before shopping. Look through the cupboards and ‘frig, to make the list. Once shopping, do not buy anything not on the list. Do not buy anything ’on sale' that one would not ordinarily buy. Warehouse Clubs (clubs like Costco® or Sam’s Club®) are a way to save, but only if one uses common sense. Never buy in bulk what one cannot consume. A 25 lb jar of pickles may be a bargain, but who is going to eat 25 lbs of pickles? Bulk items that make sense are dry goods, canned goods, and paper items (toilet paper, napkins). Buy by the price per lb/oz, not the price tag. Many grocery stores provide the price per lb/oz on the shelf tag, but not all. (The formula is price÷lb = price per lb. Most have a pocket calculator, if not a ‘cheap’, no-frills calculator can be found almost anywhere.) There are some items where bulk is more expensive. (Sugar is a ‘usual suspect’. A 10 lb bag of sugar often costs more than two 5 lb bags). It may take longer to shop until one gets the hang of it, but the savings are worth it.

A special note about children and grocery shopping: If one has a child, if possible do not take them. If one must take the child, feed them first (just like you) and take a bag of ‘treats’ and a disposable ‘fascinating’ toy for them. How many times have we seen a child ‘melt-down’ at the check out stand? All the ‘pretty colored’ candies are within their reach, and the rising crescendo of “Can I have this?” embarrasses the parent into acquiescence. News flash, having worked retail, this is PLANNED! Stores expect it and they want it. They call it ‘impulse buying’, and companies PAY to place products there.

®Costco & Sam’s Club are registered trademarks belonging to their respective owners.