Ziactrice (ziactrice) wrote in personal_roi,

Pre-Weekend Thought Provokers

I've decided to leap in with both feet and talk about wrestling with debt. I read a figure recently that 55% of the bankruptcies in America currently are caused by medical debts. Meanwhile, as much as one dollar in three paid to Health Care Insurers goes to pure profit, with only two dollars to doctors, nurses, medicine - you know, the stuff that hopefully makes you well again.

Most of the debt problems I have had relate to 1) the avid consumerism pushed down American throats every day, 2) becoming unemployed for an uncomfortably long period, or 3) buying frivolous things while not watching (or deliberately ignoring) the credit card money owed piling up like a volcano. At more than 5,000 advertisements a day (what most Americans are exposed to), it is extremely hard not to want things. Sometimes even things that after two seconds of reflection, I wonder why I ever wanted it in the first place.

Here are my Things that Helped me Spend Less Money:

1. Getting a DVR on the cable TV service has been immensely helpful. If I don't see the commercials, the movie trailers, and the sale-sale-SALE advertisements, I cannot desire going out to purchase these things or see those movies.

2. Eating out is the most incredible, fastest, and least-permanent way to burn through immense amounts of money I think exists. In fact, I'd go so far as to say the average American middle-class person (or lower-mid class, like me) wastes more money on eating out than she would ever spend on, say, a professional wardrobe of suits (not one suit, but a enough to wear for years). I'm personally offended if my grocery bill surmounts $100 a week to feed two people, but I can go out and spend $30 on ONE meal, for just myself in a sushi restaurant. Moreover, people usually eat out four or more times a week - which means they're spending more on those four meals than they spend on the next two WEEKS of groceries. I'm trying to eat a lot better at home - spending a shade more to do so - because it keeps me out of the restaurant. It's like using a list in a grocery store so you don't bring home WAY more than you really needed.

3. New clothes are particularly wasteful, especially the stylish crap they push onto women these days. After my divorce five years ago, I spent $1200 on a professional wardrobe of suits, shirts, skirts, and pants. It sounds like an immense amount, doesn't it? Well, I had nothing actually suitable to wear. So, those five suits and six shirts, two pants and two skirts are still in my closet, still in good to fair condition (one pair of polyester pants is starting to pill a little, because I have dared to wash it in the machine rather than always dry clean) now. It has been six years since I purchased them. All my regular clothing - cotton T-shirts, denim jeans, tennis shoes - have ALL worn out and been replaced TWICE in that time. So perhaps those AWFULLY expensive dress shirts at $65 per weren't so expensive... considering that my mid-range blouses, not as nice... wear out and lose buttons in a year.. and they cost a minium of $12 each. I like to supplement with thrift store clothing. Yes, I know there is awful-looking, worn out, why did someone EVER donate this articles of clothing there. I also know there are silk and angora sweaters for $2, a Banana Republic dark grey woolen sweater (original price $200) I bought for $4 - in my exact size. It requires immense amounts of time and patience and a little humility to shop thrift, but it can save and pay off very well once you get the hang of it.

4. Big-ticket items - these are REALLY hard to reduce. Cutting down on eating out is so much easier. All the car insurers seem to have fixed their prices so there is very little difference. Housing costs are usually geographically set; if you want to live somewhere halfway safe, you have to pay through the nose at an uncomfortable level just to have a place to hang your hat. If you have an apartment, there are maintenance troubles, noisy neighbors, tons of dog poop, parking nightmares, increased crime of burglary or worse. Plus, you sink all that money into rent every month for nothing but 30 days of a place to live. If you try to buy a home, there is a huge chunk of down-payment money out, insurance, mortgage, maintenance, and something always breaking, property taxes, neighbor issues, HOAs, etc. Riding my bicycle instead of taking a car involves the risk of getting injured in traffic, which would make it not a saving very quickly. I have managed to find a roommate situation that works very well for this stage of my life, given I'm middle-aged and divorced. Sharing expenses with a good friend is a win-win for us both. I can see why people in other countries have flatmates so often.

5. Most important to saving - get the money out of sight. I have my DRIP purchases of stock, my Fidelty funds, and my insurance all automatically deducted from my checking account. Every month, I do NOT see that money in there, so I cannot think to spend it on anything else. Getting expenses down enough to have the income to skim off the top is hard, but it is the only way that ever worked for me.

Who has other ways of raising the bridges or lowering the rivers?
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