January 3, 2013 Money Saving Challenge

One of my readers actually chose my topic today without even realizing it. Thanks goes to Frugalista Mama and her mom. 

Her mom mentioned that the increase in social security being taken out of her daughter's paycheck this month was only 2%. As Frugalista Mama noted, it is a significant amount when you add it to the increase in medical health insurance that they got hit with.

This kind of thinking of it's only 2% sinks ships. I have been trying to get that point across for years. There are only so many big things that you can save money on or cut corners on. You can cancel the cable, the cellphones, shop around for better insurance rates, haggle to buy a car, haggle for a better percentage when a realtor sells your home, refinance for a better mortgage rate, etc. Then you reach a point where you are at the bottom and there is nowhere else to cut on those items.  

I have heard so many people over my years says well it's only a few dollars or I deserve it. Perhaps you do deserve it if you have the cash to pay for it. If you have to put it on a credit card that you can't pay off in full when the bill comes, then you definitely don't deserve it and shouldn't buy it. Don't get me wrong, I am not trying to take all your little pleasures and luxuries away. Everyone has to treat themselves once in a while. So if you have the cash, enjoy them. 

But don't spend 2% here and 1% there over and over again and then wonder why at the end of the  year, you are in the hole. These little things do add up and a lot faster than you realize. That is why I feel it is so important to keep a little notebook for 2-3 months where you enter every penny you spend and on what. I know the first time I did that years ago I was shocked at where the money went those months. Unless you see it, you have no idea where the waste is and where to cut. 

I think you are all smart enough to realize that if you are buying lunch at work every day, or latte at the coffee shop, or eating out ( even at cheap restaurants) two to three times a week that this adds up to a significant amount of money every year. If you don't, then don't just look at it as a few dollars here and a few dollars there, really think about what you are spending. 

If I save 1-2 % in a month by not eating meals out or junky fast food, 5% on my heat bill, 10% on my grocery bill ( not 10% with coupons but actually cut the amount of money OOP that I spend), 10% on gasoline costs by cutting the amount of driving I do, it all adds up to a significant amount of money  every month. Probably as much or more than the monthly amount that you cut your big bills. Plus there is always room to cut the little things. Sure eventually you will get to the point where there is no more to cut but it takes a very long time and after 45 years of marriage we haven't reached that point yet.  

You all know that DH and I have been retired now for over 11 years. If we had the mindset of well it's only a few dollars here and a few dollars there or 2% here or there, we would be broke. I have seen so many of my friends retire, spend like drunken sailors with no thought to their futures, and wonder why their retirement money is gone.  Yes, you are supposed to enjoy your retirement which DH and  I do every day but not to the point of going broke. We have no idea when we will die any more than anyone else does. I don't ever want to be in the position of having only social security to live on. People, most social security checks won't pay your household bills and buy food. It was never meant to make you a living. Besides, it could go away at any time especially with the system as broken as it  is. Worse yet would be to have to go on welfare or some other form of public assistance to survive.  I was raised to believe that you take care of yourself. That is how I want to live and I believe that is how most of you want to live.

I know you have heard me say so many times that no one will take care of you but you. Eventually, and sooner rather than later, with this country trillions of dollars in debt, there will be no public assistance, there will only be yourselves. Are you preparing yourselves for that? Or do you live in the dream world that someone will always take care of you? Look at Greece where the people rioted in the streets when their public assistance was cut. Do you want that to be you?

I don't want it to be you. I want each one of you to be able to take care of yourselves and not have the government tell you how to live. I want each one of you to think about how you spend those pennies and how you too can retire some day and take care of yourself.

If DH and I had not saved a significant amount of money, we would not be living in a brand new paid for house, paying huge property and school tax bills, eating as well as we do, being able to afford our healthcare,  dental, and drugs, and paying the everyday expenses that we have to live and live well and have no debt.

So please, like Frugalista Mama, realize that those little things do add up and start cutting those as best you can everyday. It will pay off in the long run. As I have told you before, we nor our children ever went without anything and we always were able to save at least 10% and in later years much more of the income that we brought in. Most of it we did by cutting the little expenses. 

We will be cutting right along side of you again this year because inflation is again rearing it's ugly head. I saw on the news last night that dairy, meat, poultry, bread and cereal prices will be rising again. I also expect that dear old Ben will eventually being printing money again so our money will be worth even less than it is today.

I will be back with my post on what I do and spend today but I felt this was an important topic that needed to be covered. Please feel free to leave a message and share how you feel about the little expenses.