Monday, September 14, 2009

Staying Afloat in the Midst of Financial Turmoil

Frugality has become a way of life in our home. It wasn’t always that way. We learned through our experiences throughout many years. Some people make remarks about our going to garage sales or about the middle class neighborhood where we live or that we match ads for groceries. It used to bother me, but as I see those same people struggling to pay their bills and coming close to losing their homes in the next few months, it doesn’t bother me so much any more. I would rather be frugal and live with the peace of knowing that we will make it through hard times because of the following choices we have made:

  1. Maintain the same standard of living regardless of whether you get more money or not. We also don’t plan on changing our spending habits even though the economy is improving.
  2. Pay off your home as soon as possible. We make additional payments each month on the principal of our loan. By doing this, our home will be paid of in less than half of the time it would normally take.
  3. Save money each month. We save 25 dollars a month per child in a savings account as well as 100 extra dollars per month to have on hand. This is in addition to our emergency fund of 1000 dollars which we have in the bank in case we need it. The emergency fund money is replaced as soon as possible if it is ever used.
  4. Buy used or deeply discounted clothing. Most of our clothing is purchased in the summer at garage sales. We get quality name brand clothing for 25 cents to one dollar in most cases. We also buy winter coats at garage sales, and buy two per person. If the kids lose their coat at school, we have a back up. We do the same for gloves and hats. Any name brand, winter or sports clothing gets taken to a second hand store on consignment if the kids don’t like it, it doesn’t fit or is outgrown. We end up making money off the clothing we buy used. If we do buy new clothing, we buy off season when it is deeply discounted.
  5. Eating out is something our family enjoys, but when we go out to eat we use coupons or go when they have specials to reduce the cost. For example, one of our favorite restaurants has unlimited soup, salad and bread for 5.99. They also have frequent lunch cards. On Tuesdays, they give you double punches. So, that is the day we will go to that restaurant. It doesn’t take long before you get a free meal. We always drink water instead of buying drinks. Sometimes we will split meals or just take the leftovers home for another meal.
  6. Groceries cost us less than half of what most people pay because we faithfully study the grocery ads each week. We buy and eat what is on sale. We stock up enough of the sale items to have for a 3-6 month period. It takes a few months to stock up a well balanced pantry, but it is worth it. I write a fairly accurate grocery list of the item, store and cost so I will know how much I expect the total to be. I do all of this before entering the store. I cut back the lowest priority items on my list to stay within my budget. Since I know how much the total should be, I will be able to catch any mistakes made from ringing up my groceries right away. If there is self check available, I usually go there so I can go slowly and make sure I am being charged the correct prices. I set a limit each week on what I spend, use cash, and don’t go over my limit.
  7. We have 3-6 months of canned goods and staples like flour and sugar, for example. If something were to happen, we would have plenty of food for a while.
  8. We have savings in the bank equivalent to 6 months of our salary. If there was a job loss or salary change, we could pay our mortgage, our bills and all our other monthly expenses for 6 months.
  9. I cook from scratch. I make our meals, bread, cookies, tortillas, cakes, and most things from scratch. We do this to save money, have better quality food, and avoid preservatives and colorings from packaged foods. One of the simple pleasures in life is to smell and eat homemade bread.
  10. We try to buy used if possible. We buy serving dishes, decorations, wool blankets, Tupperware, books, etc. at garage sales. You can save tons of money this way.

Developing frugal habits has blessed our lives by providing peace through financially troubled times. We are able to pay for our needs and have money to spare. I am grateful for the experiences we have had which helped us to be wiser with our money.

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