According to myriad economic experts, our economy is slipping into a recession, or may already be in one. The news is daunting, especially in tandem with tumbling stock markets, mortgage disasters and painfully expensive gasoline. Most of us are feeling the pinch. Having to cut back on spending is never a fun endeavor, but it doesn’t have to be as painful as you think. Here is some of the best advice I’ve found from fellow bloggers on cutting back during hard times.
1. Clean up your credit score; the higher it is, the more you save on loans. In a blog post, Mr. Credit Card discusses the price people pay when they have bad credit, such as getting stuck with unfavorable mortgage rates. While many people end up with bad credit due to excessive debt or late payments, Mr. Credit Card mentions a scenario in which a friend realized that several errors on his credit report were contributing to a low score. Cleaning up your credit report can save you vast amounts of money on interest payments.
2. In Well-heeled, With a Mission, my new friend Wanda blogs about her goal of cutting back on shopping (something I’m also trying to do). She’s developed the mantra “C.A.S.H. saves me cash.” That stands for “clothing, accessories and shoes hiatus.” Wanda has learned to rediscover forgotten items in her closet and to feel more content with what she has. The best part? She’s noticed more flexibility in her budget and feels less tempted to shop. “I still browse online occasionally, but I don’t feel the urge to jump on ‘deals.’ I’ve passed on $30 Banana Republic pants because I have enough black pants. It’s not a deal if it’s something I don’t need,” she says. Amen. My additional advice: If you do have to shop for something, don’t take your credit cards with you. Bring only the amount of cash you think you will need for the purchase. That will eliminate the urge to impulse shop and splurge on “deals” you don’t need.
3. If you can’t give up shopping, the Internet may be your best venue. Jim from the Blueprint for Financial Prosperity blog lists eight reasons why you should shop online. Some of the reasons include no sales tax, no gasoline used, records of orders, special offers and coupons, price-matching, more sales and longer sales. Not to mention no lines! Make sure you check out return policies, though, the cost of returning and “restocking fees” can easily wipe out savings.
4. Financial expert Sanyika Calloway Boyce in her Smart Money blog recommends to eliminate one money-waster every three months — especially if it’s something that is automatically billed to your credit card. This is a great goal for people who aren’t good at dropping things cold turkey. Whether it’s canceling a Netflix membership you never use or making trips to the library instead of one-click buying at Amazon.com, slowly weed out things that drain your wallet. I’m never one to discourage exercise, but if you have a gym membership and never go, that may be a cost worth cutting. There will always be public parks and neighborhoods to walk or run in.
5. The Good Human suggests buying energy-saving compact fluorescent light bulbs. By changing all his old bulbs to this kind, he’s watched his electric bill slowly drop month by month. I’ve heard the same story from several other people who have switched. Why not do something good for the environment and save money at the same time?
Do you have any other tips on saving money during tough times?