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Wednesday, February 4, 2009

How to survive a recession

I know some of you will argue that we're in a depression, but all the more reason to really look hard at how you are living and figure out how to comfortably ride out the bumps in the road.

You don't have to look too far for help in finding some great ideas on how to save money and stay on a budget. There are numerous websites with all sorts of help on living frugally and getting closer to financial freedom. On top of that, you can look to our grandparents and others who lived through the depression to see what they did.

So, let's address some of the necessities and see where you can get some savings.

Food - This is one area where you can take advantage and save a lot of money. Growing your own fruits and vegetables, eating less (or no) meat, choosing inexpensive, but nutritious, ingredients and making/baking your foods from scratch can help cut your costs considerably.

When you go food shopping, plan out your meals for the week (or more) and stick to your list! If there's an item on sale that you tend to eat a lot of, then it's a good time to stock up, but don't get sucked into buying things you don't use or need, just because it's on sale or you have a coupon.

And, since we are doing the Food Waste Reduction Challenge this month, making sure that no food goes to waste will help out your pocketbook. Cutting back on eating out and eliminating those trips to Starbucks will also save you a bunch of money. It may not seem like much at the time, but those $3 splurges add up.

Do It Yourself - Instead of forking over money to someone else to do big or small jobs around the house, do it yourself. Unless you have health issues that prevent you from physical labor or fine motor skills work, paying someone else to mow your lawn, weed your yard and scrub your toilets doesn't make a whole lot of sense if you can do it yourself.

Don't know how to do a household job? Decide whether or not you can learn to fix that leaky toilet or install new downspouts. Borrow some fix-it-yourself books from the library and teach yourself a few new handy skills to have around the house. If something still seems too complicated, you might be able to exchange services with that handy neighbor of yours: maybe he/she is willing to do a little electrical work in exchange for setting up their computer.

Cut Back on Optional Expenses - Do you really need all those cable channels, newspaper and magazine subscriptions, cell phone services, and the like? Try to cut out what you don't need or can replace online. You can read most newspapers in full online as well as many magazine articles. Same goes for many TV shows. So, perhaps your Internet connection can provide you with your all your media. If you must have a cell phone, think about getting rid of your house line and using your cell phone as your main phone number.

Heating, Cooling and Electrical - I don't need to tell you that Freezing Yer Buns off during the winter and Keeping Yer Cool during the summer can save you a lot of money, particularly when energy costs are rising. Think about investing in or making your own solar cooker to reduce gas and electrical costs associated with cooking. Turn off and unplug things when not in use and line dry your clothes whenever possible.

Buy Nothing - That's right. Limit your spending to only food and absolute necessities. If you do need some new clothes for yourself or for the kids, shop at second-hand or consignment shops. You'll generally find high quality clothing and some housewares for a fraction of the original price. Switch to cloth TP, napkins and the like to cut out paying for paper products. Invest in a DivaCup and/or cloth pads to save hundreds of dollars on your menstrual supplies.

Reconsider your Transportation - Having your own private transportation is costly. Between car payments, insurance, maintenance, parking fees and tolls, getting to and fro can really cost and arm and a leg. While you may not be able to get rid of your vehicle(s) altogether, consider reducing the number you have or using it less often.

Combining trips, carpooling and public transportation are alternatives that many people can live with. If you have the gumption to go for bicycling, walking or pogo-sticking, then by all means, trade out a few trips and save some gas, parking and wear and tear.

Refinance - With mortgage rates at a record low, take advantage and refinance your home loan! (I'll be posting more on this soon.)

Make a Little Extra - Now's a great time to go through your storage and sell those items you never use anymore. Craigslist is a great (and free!) way to sell that gently used sports equipment, old crib and other things collecting dust in your house or garage. It may not make you enough to pay the mortgage, but a little extra money to pay for groceries or invest in a money saving item (like a DivaCup or bus pass) is well worth your time.

Go through all your bills and try to figure out where you can cut back, reduce expenses and save money. Use your savings to pay down consumer debt or reduce the principal on your mortgage. Finally, make a budget and stick to it!

What of the above areas can you work on to save money?


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