I had plastic surgery last week. l cut up my credit cards. - Henny Youngman
I’ve decided to give up using credits cards this winter. I froze my credit. I placed my cards in a plastic storage bag and put them in the freezer away from my hot hands.
I’ve decided to nip and tuck my expenses and rethink what “living within my means” actually means. Doing this is no mean feat. I think living in New York has given me a warped sense of what “my means” and “my needs” actually are.
Many of us start feeling a financial pinch when the post holiday bills arrive. It turns into a hard tug around tax season after you pay your accountant to file and if you find you owe the government. With increases in health care, insurance premiums, heating oil, property taxes and even postage, it feels like everything is going up except your income.
I used to think being thrifty was what happens when you are elderly and living on a fixed income, or when you are a college student living in a dorm, or an entry level professional starting out with a low paying job. But many of us left high paying, highly charged careers either by default or by choice, and we have had to rethink living within our means.
We learn than saving money and finding money can substitute for earning an income in a pinch. You can teach yourself to be a smarter saver, shopper and spender to get by on less.
Here are a few tips:
1. Cut expenses. Negotiate with every vendor to reduce costs. Contact your cell phone, cable, fuel and energy providers to discuss optional plans. Take a hard look at your insurance policies and ask your agent to come up with options that provide reasonable coverage with lower costs and minimal risk.
2. Reduce spending. Make a list before you head to the grocery store and resist buying anything not on that list. Redeem frequent flyer miles and hotel points for traveling or purchasing goods from an airline’s retail affiliates. Repurpose clothes and equipment rather than purchase new items. Cook and entertain at home rather than dine out. Watch movies at home rather than in theaters.
3. Consider joining AARP.org , AAA.com, shopping clubs and professional organizations that offer discounts and incentives to members.
4. Sell what you no longer need or want. I have a few friends who I refer to as “EBaybes” who have supplemented their income selling items on ebay.com. Last summer, our neighborhood held a multi-family yard sale that netted us a decent haul and helped us get rid of things stored in our shed. There are also virtual garage sale sites such as GarageSaleHomePage.com, privategaragesale.com and theonlineyardsale.com
5. Barter goods and services. Aside from Craiglist.org there are several online barter sites such as U-Exchange.com , CaretoTrade.com and Trashbank.com . Everyone has something of value that someone else may want. Trading services is one way to reduce costs.
6. “Pawn” is no longer a four letter word. Upscale “collateral lenders” are advertising for your business and setting up posh looking showrooms. People who may not be willing or able to borrow from banks turn to pawn stores for short term loans. Just make sure you understand the interest rates charged and terms if you cannot repay the loan. For tips visit the National Pawnbrokers Association website which also provides a website to locate affiliates in your area PawnFyNdR.com. Suggested reading: ”High-Class Pawnshops Fill a Lending Void” online.wsj.com/news/articles/SB10001424052702304384104579141864036455006
7. Pool resources, Find budget minded friends or family members who live nearby and share the costs for bulk goods or major home or lawn equipment. Carpool to work or school. Share subscriptions to clubs, services, or magazines. Consider forming a group to negotiate better membership rates for clubs and organizations.
There are numerous money management apps on the marketplace. I confess to not using any of them. I’m just freezing my credit cards, carrying less cash, putting my debit card in a drawer, taking public transportation or walking to appointments and avoiding stores and other temptations. But, if you are inclined toward using an app, this article from BusinessInsider.com provides a vetted list businessinsider.com/best-apps-to-manage-money-2013-7
I view cutting expenses like going on a financial diet. I’m trimming my waste-line in favor of being lean and fiscally fit. Like any diet, it is not going to happen overnight. There will be temptations and slip ups, and that’s fine as long as you can get back on track. Once you hit your goal you need to work hard to maintain it. But the reward of being in a healthy financial state, much achieving financial freedom, is priceless.