Economize Through Tough Times

The global economy has been in severe distress for the past year or more. And, if you are one of the many unemployed or under-employed you know all too well the financial strains on you and your family. Here’s a guide to economizing and easing the pain.

The first and best place to start is where most of us are severely exposed: credit debt. If you have too many credit cards with too high balances, mothball a number of them (or cut them up). Commit yourself to a reduced credit diet. Wherever possible, pay off outstanding balances, or at least make required minimum payments to avoid unnecessary fees. And don’t be afraid to contact credit companies to negotiate your way out of tough situations; most credit companies are used to working out mutually acceptable resolution of large balances or delinquent accounts.

Next, know the terms (and potential fees) all of your financial accounts: Savings, checking, ATM use, loans, etc. Then, shop around. Do the homework necessary to compare and contrast your current financial arrangements with those available through other local providers. You might be able to make some changes that save you money in the long run.

Know when all of your regular bills (mortgage or rent, utilities, phone, cable, property tax, insurance, auto, medical coverage, tuition, credit cards, etc.) come due, and understand how to plan and budget for them, so that you can make timely payments and avoid delinquencies. If you know a delinquency may be likely in the future, contact the creditor in advance to work out some type of arrangement. You’ll fare far better than waiting until after a delinquency results.

Renegotiate those financial arrangements that you can (like mortgage, rent, or auto lease), and reevaluate or shop around for alternatives for others (like insurance, phone, cable, or medical coverage). Find out if any of the providers offer discounts or credits to those who have lost their job, been cut back on hours, or can document financial hardship. You might be surprised what some providers will do to keep a customer. Also, investigate financial hardship provisions for such things as utilities subsidies, home energy assistance, reduced tuition, free transportation or free school lunches.

Do away with non-essentials. Lose the landscaper and cleaning person, or scale them back to lower frequency (or undertake those tasks yourself). Indulge in a car wash far less often. Skip the local multiplex or video store this weekend, and borrow some DVDs from the library instead. Replace the daily $3.95 frappuccino with a $1.29 half-caf. Eliminate those every-other-day stops for munchies at the fast-food place or C-store.

Move down the food chain. Forego red meat for a bit more poultry. Try a few less brand names at the grocery store, and a few more generics. Buy in bulk when you can, to obtain the best pricing. Patronize the trendy white-tablecloth restaurant with the padded menus a bit less often, and the local quick-serve restaurant a bit more. Or, better yet, make an effort to cook at home a lot more often (or even all the time). And, if you are cooking at home, ease up on the price prepared food dishes at your local store, in favor of recipes from scratch, which can not only be much cheaper, but also more nutritional and healthier, in the long run.

Coupon, coupon, coupon. By what’s on sale ONLY if you need it, and ONLY when its on sale. Do without nonessential items, and question exactly what IS essential before you buy. And don’t be afraid to ask if you are seeing the best price the retailer or shopkeeper or grocer is willing to offer. You never know if you don’t ask.

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Minimize trips, and drive down the miles you drive. Try to accomplish all those miscellaneous household errands as you are heading to and from work, or coupled with some other necessary trip. Seek out those pastimes and pursuits — family dinner together, card or board games, DVD night at home, bike-riding or walking, backyard barbecue, visits to zoo or aquarium or museum or park — that don’t automatically entail a hefty admission price or cost of attendance. You’ll enjoy your life better, and your finances will improve, too.