- Personal Finance
Penny Pinching during the Time of Recession
A Penny Saved is a Penny Earned
What is Recession?
The official definition of recession is when there is no growth in the Gross Domestic Product (GDP) for two consecutive quarters or more. However, you can feel like you are in a recession before it has officially started because businesses stop expanding, employment falls, unemployment rises, and housing prices decline. For those reasons, many experts say the U.S. is heading towards a recession.
Top ten signs a recession is coming
1. Everyone is worried about his job security and when he will get laid-off.
2. Gasoline price is over $3.00 a gallon and still going up and up.
3. Jobs are lost and it does not look like they are coming back soon.
4. Small businesses prefer that you pay them cash rather than checks.
5. Feds keep lowering interest rates but credit card rates stay the same.
6. The White House says the economy is just fine and nothing to worry about.
7. The price of homes are falling and yet people cannot afford to buy them.
8. The number one issue that politicians talk about is the economy
9. The monthly Social Security checks cannot keep up with the inflation rate.
10. You don't have to wait for a table at once popular restaurants..
What is Penny Pinching and how to do it?
Penny Pinching means extreme care in spending money and reluctance to spend money unnecessarily. You do not have to start penny pinching only when there is a recession. Actually, penny pinching is a sensible and practical way of living, and it should be practiced by all families at all times, and they should make it a lifestyle.
Penny pinching is not about how much or how little you have. You can have all the stuff you want and still pinch pennies. The key to successful penny pinching is to only buy stuff that you really need at the lowest cost while getting rid of stuff you do not need by selling them at the highest price. The key to saving money is to have, useful things as much as possible, but only what you need, and not what you don't.
Higher Food Prices are changing Eating Habits of Families
Steadily rising food costs are changing the very ways we feed our families. The worst case of food inflation in nearly 20 years has more Americans giving up restaurant meals to eat at home. We're buying fewer luxury food items, eating more leftovers and buying more store brands instead of name-brand items. When you are feeding a large family it means scouring grocer ads for the best prices, taking fewer trips as a way to save gas and simply buying less food, period.
Penny Pinching is Smart Grocery Shopping
Penny Pinching by Comparison Shopping for Groceries
Groceries are one of the biggest expenses each month for many families, so it definitely helps to make every effort to visit different grocery stores and compare their prices.
First of all, there are regular grocery stores that have free membership programs. By signing up to receive a card, you receive special savings. This is often used in place of sale pricing, and the benefit to the store is that they know what you buy and how often you buy it. If you don't mind giving out this kind of information, the savings can be significant.
The second type of store is the "warehouse" style. Nationwide chains such as Sam's Club and Costco offer memberships for an annual fee. Members can then enter these huge stores--they are literally in warehouses--and shop for everything from rice to refrigerators while they drop off their film for processing and get new tires on their car. While the savings on many items are tremendous, you may pay higher prices for others. The trick is knowing what is a good deal. Also, you will usually have to buy large quantities of whatever you want--soda comes in cases of 24 cans (or more), ground beef in 10-pound (4.55 kg) packages, and rice in 50-pound (22.73 kg) bags. As with grocery store membership programs, these kinds of stores offer significant savings, but you may have to buy far more than you may want.
Smart Shopping with three lists
There are three lists that you should always use in order to make your shopping experience successful.
- Meal list: Decide what you will be eating for the entire week ahead before you shop.
- Grocery list: Turn your meal list into your grocery list by breaking down each meal into the single ingredients you will need to purchase to make the meal. Add any extras you can think of, such as toiletries. Stick to this list.
- Price list: Compare prices at different stores and of different brands to see where you can get the best deals. Products on sale are not always a bargain, and you'll know better if you have your price list handy.
Ten simple rules for Penny Pinching Shopping for Groceries
1. Plan your shopping trip to include several activities along the same route and within the same area, so that you can save on gasoline and time.
2. Do not be loyal to any single store. Every store has special items on sale that are advertised on their flyers. You can look out for other items that have lower prices than in other stores. You can shop in different stores that have the lowest prices on special items.
3. Buy produce when they are freshly placed on the shelves and at the lowest price. Buy perishable items that are marked with the latest date of expiration. Stock up on non-perishable items when they are on sale.
4. Try to shop only when you feel rested and alert. You'll be better equipped to calculate bargains and watch for errors at the checkout counter.
5. Bring a pocket calculator. Use it to keep a running total of what you are spending. That way you will not get a nasty surprise at checkout time.
6. Look for specials, but be careful. Search high and low for bargains, literally. Most times, best buys are placed inconveniently on high or low shelves. Eye level space is reserved for premium-priced goods.
7. Compare UNIT price, not price. The unit price is the price divided by weight or volume. For example, two items cost the same, say $3.99, but one is a 12 ounce package and the other is a 16 ounce package. The unit price will be lower on the 16 ounce item (25¢ per oz), as compared to the 12 ounce item (33¢ per oz).
8. Be willing to try house and generic brands and sizes. It may be worth the difference in price if the item tastes exactly the same or very close to it.
9. Pick up quantities of staples when the price is low. For quantity buying, you need storage space and you must be able to use the items within a reasonable time. Get the large economy size when the unit price indicates that it is really economical.
10. Coupons, Coupons, Coupons. Or a preferred customer card. You can easily save 10% or more by using your coupons or customer card.
Alan Greenspan was the chairman of the US Federal Reserve Board and he was known to be an economy and financial expert who had the power to determine official interest rates in America. Greenspan's general comments can be so strong that they can send financial markets sharply in either direction. Although he had retired on January 31, 2006 yet he is still such a powerful speaker in demand that he has been known to receive $100,000 just for one speech.
On February 25, 2008 during a conference in Abu Dhabi, United Arab Emirates, former Federal Reserve Chairman Alan Greenspan said: "The existing financial problems are deeper than we've had for a while, so I wouldn't be surprised if this recession is deeper than the last two shallow recessions,'' Well, you can be sure that many people in America will think seriously on what he said and do something about it.