Part II
Continued from yesterday…
In yesterday’s post, I started with some basic ideas for how to survive a depression. The signs aren’t looking good yet (despite what some tee vee shows want you to believe.) Think we’re headed for a depression? Having trouble keeping your head above financial water? To survive a depression, you’ll need as many resources as you can muster – money saved, skills learned, low expenses. We’re just starting here with some options for you to start putting even a little bit of cash away, and build a financial base on which to stand…Here are some ideas to deal with basic financial issues facing many people today.
Tough Decisions For Many Families
As a result of the financial turmoil, there are plenty of families which will be torn between putting aside money for retirement, and saving for college for their children’s college education. Many parents now paying for private school in grades K-12 are now rethinking that decision. As for college costs, they keep rising, and enrollment in local community colleges is skyrocketing. Yet do parents always have to pay for college? If high school age children are encouraged to do everything they can to apply for all available grants, treating it almost like a part time job, they may find that there is cash available. In addition, holding down a part time job or two in the summer can give teens a way to afford school. When parents give up financial security in their old age in favor of paying tuition today, that is probably a far bigger danger than the impact on their children of having to attend a community college instead of a major private university.
There are plenty of state colleges that are priced under $20,000 per year for state residents, including tuition, fees, books, and room and board. A part time job that pays $10-15 an hour can cover a large portion of that amount. Community colleges are far less, especially if the student lives at home for a year or two.
The biggest takeaway however is that students should treat any kind of college loan as an absolute last resort. The last thing a student needs, or a parent, is another pile of debt in an economy like this, which could be sluggish for a decade or more. Getting real about your finances is the only way to protect yourself in a depression – and that means that the American “but I want it NOW” attitude has got to change in favor of a prudent, smart, long-term wealth-protection strategy.
Saving as much as possible, getting a job, and spending time researching grant money, as well as attending an affordable school, is a good, Depression-defense strategy. Parents should just keep socking away as much as possible for retirement.
How About Vacations?
As of this writing, airlines are lowering costs as gas prices have come down and people are staying home in droves to save money. Vacations while of course wonderful, are a casualty of reductions in credit spending. How many vacations have you taken that were paid for in full with cash? Avoiding credit card debt can mean avoiding expensive vacations.
Yet there are plenty of options. Home swaps are one; there are agencies online that help you find a family interested in a trade. There are campgrounds with modern cabins, and hotel discount websites. Cheap travel websites about, including last minute travel deals, discount airfares, discount cruises and cheap hotels. Cutting the length of your stay is an option too. Visiting relatives or renting a vacation home together with friends is another way to keep costs down.
Why not explore locations closer to home too? Big cities like New York and San Francisco can be expensive, but history and sightseeing abound in out of the way locations like
Easton, Pennsylvania (a couple hours from New York City), or off the beaten track locations like St. Augustine, Florida, or Bethlehem, Pennsylvania, or medium-sized cities like Memphis, Austin, or Minneapolis-St. Paul. Get out into nature by exploring one of our greatest national treasures: the
National Park Service system.
If you’re taking a driving holiday, you might consider going a shorter distance. Anyone with an RV is still taking a hit on fuel costs, but consider staying longer at one location instead of more mileage.
Spend Less for Entertainment
Do you really have to cut back on entertainment jut because your budget is cut back? Not really. There are really hundreds of things you can do, for less. One website, GoCityKids, offers lists of things to do, free and paid, for dozens of locations around the country. Public libraries are now swamped with requests for movie rentals, music rentals, and the old-fashioned book. Many municipal and college libraries show films to the public. Schools, colleges and local orchestras offer free concerts. Some communities sell discount tickets to events like theater and concerts, along with movie and museum tickets.
Start a game night, movie night, potluck night with friends, or a neighborhood wine tasting. There are more ways to connect with your community than you probably knew – and it can enrich your experience of where you live.
Are We Addicted to Debt?
There’s a lot of finger-pointing out there about who caused the current economic crisis. It’s likely that we all had a part. Clearly, the warning flags have been up for some time, as Americans’ saving rate went negative (we borrow more than we earn in income) and we just kept spending money we didn’t have.
With life spans increasing, you’ll need more money to retire in any type of comfort level. If you start getting on track now, you can protect your retirement, rebuild what you might have lost, and avoid getting sucked in to the casino we call Wall Street. One important way is to break your debt addiction by getting rid of credit cards. Pay them off; cut them up. Will it hurt your FICO score? Who cares? You want to move away from a debt-oriented way of thinking, which FICO encourages. And if you bank cuts your credit line, that will hurt your FICO too, without your agreement! Having money in the bank and learning to live within your means is a better strategy than building up a credit-borrowing score to borrow more in the future. It’s time to break your addiction now!
Do you want to be 75 years old and having to work to pay off your credit card debt and rent? I didn’t think so.
When Will It Get Better?
Everything in our world is cyclical. It might take ten years to start to see improvements, or a return to personal wealth that we saw a mere one or two years ago. but in the mean time, you will be able to build a much stronger foundation than you had before, and learn more about being a good neighbor, and how to build real wealth and not just borrow money to have the image of wealth.
To survive a depression, you’ll need to seriously cut costs, and increase the money you do have, as well as skills that make you marketable or which you can barter or use to maintain your home, vehicle, lifestyle. But belt tightening doesn’t have to be painful, if you find creative ways to enjoy life instead of just buying more and bigger stuff. You can instead save money, build real wealth and pay down debt. That way, when “good times” return, you’ll already be there.
Want to start piling up cash? For anything you need in the next 5 years, some are advocating that you start saving you cash. Maybe for beyond 5 years!
Here are some ways to slash your budget and start putting aside cash out of your next paycheck.
Cut these from your budget NOW!:
- Entertainment expenses: movies out, dining out, fast food, expensive vacations in favor of closer/shorter/less costly. Use the library for movies, video, music, and much more than just books.
- Lunch at the office: take your lunch and save $200+ a month. Try a potluck once a week with several co-workers for something different.
- Fuel costs: start carpooling, cut the number of trips you take each week, put the kids on a bus or bike instead of chauffering. Driving 55 saves 25-30% of fuel burned by your engine as driving 70 MPH or more.
- Your electric bill: Shut off lights. Switch to CFLs, which save over the long run. Use cold water for laundry, take shorter showers. Turn down thermostat in winter, turn up AC in summer.
- Cable - save $100s a month! Watch on the Internet!
- Try the thrift store. Yes really. We have been buying new and like-new brand-name designer women’s clothing for under $5 per item. Not to mention other household items – a boy’s bike, brand new, for less than half price.
- Buy food in bulk, buy it now for the year. Seen the way prices have jumped 10%, 15%, even 25% on items over the past six months? Clear away some room in the basement or a closet and stock up.
Post a comment with your best ideas for saving IMMEDIATELY!
Here’s a quick list of five tips to save gas. By using these gas saving tips you can save as much as 20-30%!! With the cost of filling a tank between $50-80, that’s a nice piece of change.
1. NUMBER ONE is DRIVE LESS! This is a no-brainer. Start carpooling to work. Combine trips. Don’t drive around just because you don’t have anything else to do. Get out of the car and onto a bike, or walk. Find fun things to do that are less that 10 minutes from home. Don’t be one of those people that drives 20 miles extra to a “sale”, not realizing that you just spent 2 gallons of gas getting there and back. Less driving = more money!
2. Next, DRIVE SLOWER! It’s true – anything over 65 MPH, ideally 60, burns 20-30% more fuel. Your engine is not meant to function efficiently at 70,75, 80 MPH. So SLOW DOWN. Do a test: See how many days a full tank lasts when you’re slowing down compare to usual fast driving habits.
3. Inflate your tires. Don’t laugh. This can cost you another $1-5 per tank. That’s $20 a month.
4. Find the lowest priced gas station at Gas Buddy – drivers input the lowest prices they find in their area. Join and post your own local prices.
5. Pay Cash. Some gas station owners are still gouging for credit card use. This BS is likely to increase in a credit-damaged economy. Use cash to save a few dollars.
Just a word of advice: It’s a good idea to start doing some or all of these, since over the next ten years we’re really going to see fuel costs rise as supplies dwindle. Day to day, prices might be a little higher or a little lower, but into the future, there is nowhere for prices to go but up. Hear T Boone: $150 a year from now…
Boone Pickens: $150 A Barrel Next Year
More tips for saving gas coming soon so subscribe to Saving Cash Tips today!
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