MONEY
It is one of the things that makes the world go round. For many people it is all that makes their world go round. Earlier in my life with idea of how to handle money there was little doubt or concern about how much spending built up on my credit cards. At one point in college I was forced to rely on my credit cards to pay for groceries as my income as a student barely covered my rent let alone extended to food.
My early thirties brought with it the recognition that my credit was shot and the realization something had to be done - and fast. Out I went to purchase every book on money saving that could be found. (Anyone else see the irony in this?) Books like: Die Broke by Steven Pollan, Live Well on Less Than You Think by Fred Brock, The Best of the Cheapskate Monthly by Mary Hunt, Your Money or Your Life by Joe Dominguez and Vicki Robin and The Tightwad Gazette by Amy Dacyczn. Everybook was read and in some cases re-read. They are still on the bookshelf in the back room and get referred to fairly often.
The spending came to a grinding halt. Payment plans were set up for all debt and a rapid repayment schedule was implemented. In the beginning the process was agonizingly painful. No Starbucks Lattes, no expensive treats at Whole Foods, no trendy new clothing, no hour long calls to friends out of state, no extras period.
Sure, I slipped. Then the guilt would set in and I would refocus and move ahead with renewed vigor. Cable TV did not exist in my apartment, no cell phone (they were just getting trendy), no haircuts (I actually cut my own for a while- that is not recommended), the library was my friend and my only splurge was a gym membership. It was the one time in my life I religiously used the gym. The "no cable" might have had something to do with it. I was broke but my body was smokin' hot.
Having tried a variety of things to save money, cooking from scratch, using coupons, making my own laundry soap, freezing my credit cards in ice (that will slow you down!) as well as building up to a full pantry, I can say it all helps. Every penny saved helps to move away from debilitating debt.
Living within your income can be challenging but it is much easier than sleepless nights over the amount of debt that as been accumulated. It involves sacrifice and a great deal of perseverance.
After the holidays is a great time to sit down and reassess where we stand financially. This weekend will bring a review of credit cards, a reorganization and inventory of the pantry as well as an assessment of financial goals for the upcoming year.
How do you live within your means?
Yeah, DH was in a mess like that when I married him. Boy was I mad. He hadn't disclosed that beforehand. So we struggled for years to get out from under. But I learned a lot. It was quite a job, though, to get him to learn. We had a really rocky marriage because of money problems and his lack of responsibility. I'm familair with most of those books and publications you mentioned. My bible was "Champagne Living On A Beer Budget".
ReplyDeleteStaying out of debt really pays off once you have grown old. I paid ahead on our home until we had the mortgage paid off early. Saved $17,000 in interest. If you start early, you can pay a year's worth of the principle for less than $100. Do that every month for a year, and you've saved thousands. Then when we moved, we had enough saved that all we had to do to scratch up enough money to pay cash for our house in the country was to take out a home-equity loan on our un-mortgaged house. When it sold, that loan was paid off. We saved about $5,000 in loan acquisition fees, not to mention all the interest we're not paying on a mortgage. If you do the math, there's very little benefit derived from being able to itemize your home mortgage interest on your taxes, as opposed to not paying that interest at all.
Yes, we live frugally, but we know other people who need to but cannot retire because they have to pay rent and cannot afford to live on Social Security. We know people who own their home but got in the trap of taking out a second mortgage. Now they can barely keep their bills paid.
We don't know what's coming now that our country is in so much financial trouble, but we will be in a better position than many will be. I worry about how senior citizens will live. I worry about what people who are now in their 30's and 40's will do in their old age. They're not thinking about the future -- spending wildly -- running up bills -- not saving for the future -- and Social Security will probably not even be there for them. *Sigh*. It's scarey. --Ilene
Luckily, my Hubby is frugal as well. At times he laughs at some of the things I am willing to try to save money. Most of the time, however, he smiles and lets me have my way.
ReplyDeleteIt is scary Ilene. You are prepared and you and Hubs have skills to see you through almost anything. You also have a crazy, awesome way of seeing the potential in things other people are selling at garage sales. I really wished you lived closer- there is so much I can learn from you!!!!
I am choosing to remain positive (forcing myself)while trying to stay busy and productive.
Hope you have a great New Year!!!
Jo
If there is one universal law of personal finances it would be that you need to live below your means. It doesn’t matter how much you earn, save or invest, if you can’t live below your means you can’t achieve financial independence.
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