Thriving in Time of Crisis

Families all across America are feeling the pinch of the worst bear market since the Great Depression. Families in record numbers are unable to pay their home mortgages and are finding credit of any kind difficult to obtain. Basic instincts have kicked in and as a result people are looking for ways to cut expenses and save money. Here are my top 8 choices:

  1. Have a garage sale. People are bargain hunting more than ever so now is an ideal time for a garage sale. Consider going in with a group of friends and make a weekend event of it. When deciding what to sell, this should be your rule, “If I haven’t used it or worn in the past two years, sell it!”
  2. Use discount shopping. Retailers are also feeling the pinch as consumers cut back so they are offering big discounts on many items. Whether you use discount coupons or shop at discount retailers make sure your ‘deals’ are on items you normally buy anyway. 
  3. Cut subscriptions. Over the years, we tend to accumulate subscriptions for many goods and services that are no longer important to us or necessary. Review everything and decide if you can live without it…at least for a period of time. For example, could you live without the premium package for cable TV or would the basic package do just fine? 
  4. Conservation energy. You can easily cut utility costs by twenty percent or more just by becoming a conservationist. Wear warmer clothes around the house and cut back the thermostat a few degrees; change out the air filters; run dishwashers and clothes washers on full load only; re-seal doors and windows and check to see if added attic insulation is needed.
  5. Review discretionary spending. In over thirty years as a financial advisor, I have never found a case where an individual, couple or family weren’t wasting ten percent of their income. Upon examination their finances resemble a boat with a hundred ‘pin holes’ and the ship is taking on seeping water. Take your lunch to work; drink office coffee; quit smoking. It’s often not the ‘big holes’ that are causing the ship to sink. 
  6. Establish a holiday gift plan. With the holiday season just around the corner, it’s important to plan ahead so that you don’t find yourself further in debt to begin the New Year. Begin now developing a budget for your gift giving based on money you have versus money you don’t have in the form of credit card spending.
  7. Lower your insurance costs. Have your agent review ways to reduce premiums on car and homeowners insurance. Raising your deductibles to as little as $500 can reduce premiums 20% or more. Many cash value life insurance policies allow you to skip premium payments for awhile. 
  8. Get everyone in on the act. If you have children no one needs to tell you what a large expense they are. This is a good opportunity to teach them about money responsibility. If you ask for their suggestions on ways to reduce expenses, you just may be surprised at how resourceful they are. Not just surviving but thriving our way through this crisis must be a family affair.