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Frugality Tips In A Budget Squeeze

Old 03-20-2008, 09:52 AM
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The mainstream media is replete with stories of rising gas prices, food prices, and even airfare. Coupled with the housing mess and near worthless (at least as compared to the Euro and Yen) dollar, families everywhere are feeling the pinch. I was wondering what you are doing to offset these costs?

The vagabond household is not hurting, but we enjoy a challenge now and then. This is what we are doing.

Drive the small car instead of the SUV and F-250.
Gas up at Costco only in the early mornings.
Take public transportation whenever possible.
Bake our own bread.
Forsake pricey restaurants in favor of home cooking.
Turn down the thermostat.
Start a backyard vegetable plot.
Cut my husband's hair myself.
Bathe the dog at home with the garden hose instead of going to a groomer.
Pay for things in cash.
Reduce, recycle, reuse.

Hey, sounds like things we should be doing all the time anyway!
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Old 03-20-2008, 10:22 AM
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Drive a smaller car.
Live within a few miles of my workplace.
Bake my own bread.
Turn down the thermostat.
Cut my own hair every other time.
Pay for things in cash or use debit card.
Reduce needless trips, reuse cardboard boxes.

This is not much, but it's all I can do without spending a ton of money on "green alternatives". If I had the money for that I might go in on a VW turbodiesel that burns used cooking oil, put in point-of-delivery water heaters, and maybe get a geothermal heat pump.

Last edited by Cubdriver; 03-20-2008 at 12:39 PM.
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Old 03-20-2008, 11:41 AM
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Shop once a week for groceries and limit our meals out to no more than twice a week for dinner.

Whenever possible, "schedule" errands around town for one day a week. This way if I have to drive across town for something, I'm not making multiple trips back and forth on different days.

Lock up the credit cards in the safe at home and only use them when absolutely necessary.

Utilize online banking to "prepay" bills when payday arrives. The money remains in my account until the due date, but is "withdrawn" from the available balance (and my checkbook).

Opened an online savings account (HSBC Direct). I automatically have a percentage of my paycheck direct deposited to this account (which pays better interest than accounts and CDs at my regular bank). Out of sight and out of mind, but still liquid assets in an emergency. Our goal is to build/keep this account to about 3 months of our living expenses.

Use tax refunds/stimulus packages to pay off debt! (Whatever you might have). It really is amazing how much you can save when you no longer have credit card and car payments to make each month. Take that money instead and save it or accumulate to for other debt payments.

Always pay a bit more than your minimum payment on debt, at least on your highest interest loan. Pay the min on lower interest loans, and take the excess and put it all into your most expensive account.

I don't carry cash, but use a debit card instead. This way it's easier for me to track my expenses (rather than whipping out a $20 for something like a latte and then wondering later, hey- where'd my cash go?!?)

Limit myself to 1 "frivolous" purchase each paycheck (video game, music, dvd, etc).
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Old 03-20-2008, 01:40 PM
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why do you guys say no credit cards? whats the problem if you're responsible and can pay them off every month in full? the way i see it, you get the grace period to gain interest on "their" money and you get the points/cash back. so its a double win situation.
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Old 03-20-2008, 02:18 PM
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The problem with credit cards arises when you start getting irrisponsible with them. Paying off the balance every month works great for a while, then it becomes "oh, I don't need it but I'll just put it on my card" and before you know it that intrest starts piling up.

They're evil.
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Old 03-20-2008, 02:31 PM
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Frontline (PBS) ran a story about credit card companies recently; they make billions off dollars per year by extending credit to people who think they will pay no interest because they will simply pay off the balance by the end of the month. I actually have no credit cards and never subscribed to the argument that you need them for hotels and rental cars.
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Old 03-24-2008, 03:24 PM
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I'm not sure I understand. I've had a credit card for 5 years and never, to my knowledge, paid interest. I get at least 1% cash back and can pay it off with the click of a mouse.
 
Old 03-24-2008, 04:52 PM
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Just venturing a guess, but easy cash is so tempting that a lot of people who would otherwise not buy something will go ahead and take the plunge because they would rather have the item than the 18% interest. They let a passion convince them the debt is worth it. Some of them may experience genuine emergencies or a few perhaps do not know what the interest actually comes to. All I know is that I want nor need credit cards, and I only get what my household budget allows and keep a spending plan to tell me when I get a new toy or luxury. Easy money is tempting.

Last edited by Cubdriver; 03-25-2008 at 02:44 AM.
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Old 03-24-2008, 05:06 PM
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If you pay your card off each month, cool. In my household, we have 4 credit cards for various reasons. However, both my wife and I only keep one on our person when we're out and about. There's absolutely no reason to carry more than one.

If you are going to use credit cards, make sure that you do the following:

1) Find a card that has no annual fee. While you might not pay finance charges if you pay your ENTIRE balance month to month, annual fees can add up if you don't pay attention. A $75 annual fee may very well be worth more than the 1 free hotel stay you earn a year or 1 free airline ticket you get every third year through credit card points (unless of course you charge an obscene amount of money):

Example:
Average family may charge $1000 a month. $1000 = 2000 points. A hotel stay = 25,000 points. That equals just over 12 months of credit card charges to get a free hotel. With airline tickets costing 60,000-75,000 points, you can see how things don't look so good in the long run.

2) Call the company periodically and renegotiate your interest rate. Most companies are willing to lower your rate by a bit, particularly if you have a long history with them, and you have a lower balances that can be easily transferred. They don't want to lose your business.

3) Don't purchase "loss of income" insurance (or whatever you card company calls it). You shouldn't be carrying a balance any way, so the need to have them pay the minimum payment doesn't apply, right? Besides, if you read the fine print, there are often waiting periods or other conditions/terms that make the programs a lot less "valuable" than they might seem.
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Old 03-31-2008, 01:01 PM
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Nothing is wrong with credit cards. I have had 2 credit cards since I started college in 2002 and have yet to pay 1 cent in interest. All it takes is a little discipline.....paying interest on credit cards is the most rediculous thing I have ever heard.
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