Cheap Living Tips

I recently came across this anonymous article and was impressed enough to want to include it here.  Although I know there are many circumstances that our beyond our control and that many people have been doing everything right and are still facing financial challenges, there is also much truth in the statement below and often our crisis is a direct result of our own actions.  Whatever the cause, the remedy or solution has to start with us.  We can not continue to go in the same direction and expect to end up with a different destination.  We must make changes in our lifestyle if we expect things to change.  A popular prayer ask:

Lord give me the serenity to accept the things I can not change

The courage to change the things I can, and

The wisdom to know the difference.

Accepting Responsibility

I make myself responsible for this mess, anybody care to join me. the bail out is not coming from government but the smart consumer, if we saved money and invested not on hype but on proven industry we would weather the storm, is not only the rich that weather it, the ones who shopped smartly lived frugal and saved money even when it wasn’t chic to do so are the ones that can live good. Right now the only people dividing this country is ourselves. If we didn’t live a high lifestyle and spend more than we have, we wouldn’t have started this chain reaction. Its not the bank’s fault only, its not government’s fault or one party they both supported the bail out. Its our own fault for not planning for our future well and not being the change we want to see. If you want a better country, spend wisely, dig out of the hole and stop waiting for someone else to help you. The first step is self accountability which is lacking in this society. Once we make ourself accountable and work together with out neighbor we can change the tide of thinking of this nation and pull ourselves out of this recession  just as our grand parents did the Great Depression.

Anybody care to join me is admitting fault in this mess?

That said, now is the time to take a serious look at ourselves and decide what WE can do to make things change.

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I am a non-polical person.  I do my best to avoid the debates between parties and I don’t believe someone like myself who is not actively partiscipating in the struggle to change the system has a right to bad mouth the efforts of those who are devoting their lives to working for change.  So up til now I have kept quiet about the health care bill.  However this week the health care issue has struck close to home.  My husband and I received news that our current health insurance program is looking at a rate increase of 37%.  This jump will take our monthly insurance premium from $843 to over $1000.  As a result our reps are looking for alternative coverages and we are looking to obtaining medical care in Mexico instead of the States.

How else can retired people afford these can of increases?  Our retirement income has a cost of living increase built in… I think it is 2%.  That certainly isn’t going to cover even the raising cost of food, nevermind this insurance jump.

What I don’t understand is where this money goes to.  I look at the statements I get showing how much my doctor receives and the amount the insurance pays her isn’t going up, sometimes it  is going down.  So where is the increase going?

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  » The reason why you can not afford not to have medical insurance:

As a new grandparent (for the 2nd time), I was thinking this morning about how things have changed since I raised my daughter.  When my daughter was young the new innovations available were microwave ovens and VHS players.  My grandson turned eighteen on his last birthday.  I remember watching in wonderment as he whizzed around my Window 3.2 and found his kids programs at the age of four.

Now days we can do more on our phones than was possible on the mammoth main frames I started my computer career on.  So the question is, how does this change the challenges faced by new parents?

Some things change very little, unlike a newborn’s diapers, which seem to need changing several times an hour.  Many new parents still face the same questions we did.  Is it better to breast-feed or bottle feed?  Are cloth diapers better than disposable?  What kind of food should I start my child on and when should they start solids?

Admittedly, having only raised one child, I am no expert on the subject but I will gladly share what I learned or believe to be true.

Breast or Bottle?

I am big fan of breast-feeding children for as long as possible (within reason).  I know this is a tough one as most mothers these days have to go back to work and pumping and storing breast milk it a real pain.  Yet, I think it is worth the hassle to keep the child on breast milk for at least the first 6 months.  My opinion, take or leave it.  Not only does it provide the best nutrition possible for the baby but it is also a budget bonus as breast milk does not cost you a cent!

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Cloth or Disposable?

Disposable versus cloth diapers… is this question even raised these days?  Maybe not.  I found a somewhat recent study that proposes that there is no significant difference in the environmental impact when you take into consideration the cost of laundering and water usage etc.

A new study released in England by a quasi-government environmental organization may dampen the debate even further. After a three-year, 200,000-pound (about $360,000) study, the London-based Environmental Agency concluded that disposable diapers have the same environmental impact as reusable diapers when the effect of laundering cloth diapers is taken into account.  ABC News May 2005

Other writers however point out that over a ton of soiled disposal diapers will go into the land fill over the course of one child’s life.  Cloth diapers have come a long way since my day too.   They now come in colorful designs and adjustable sizes that grow with your child.  One source (see video below) says that these grow-with diapers could bring the cost of your child’s diapers down to about $500, where as the buying different size diapers could cost over $1000.  Yet when you compare that to $3500 for the disposable kind, it is still a significant savings.

Baby Food or Not?

Another area where new parents can save money is by making their own baby food instead of buying pre-made bottled foods.  This practice has become even easier with the advent of convenient mini-blenders like the Magic Bullet.  I guess this is an area where mom and dad’s schedules have to be taken into consideration.  It is one thing to prepare fresh meals when you are at home but the jars are convenient when you have to pack the baby’s food to go to the sitter.    Then again, they also make convenient plastic storage containers that you can puree up last night’s veggies (before seasoning) to send off with baby the next day.  I haven’t shopped for baby food recently but I’m betting the cost has skyrocketed like every thing else.

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This is one lesson that I did not put into practice and lived to regret.  When I was young, I lived my life as if there would be no tomorrow.  I certainly did not give any thought to what I would live on when I retired.  I must admit, I couldn’t imagine living long enough to retire when I was in my teens and twenties.

My thirties were VERY lean years and our idea of saving money was tossing our pennies into a jar.  In spite of this, or perhaps because of this, I tried desperately to teach my daughter and grandson the practice of “paying themselves first” by putting a small percentage of their earnings into a savings account before they spent money on anything else.  I wasn’t a very successful teacher either.  At least not with this concept.

So here I am again, trying to share this you my readers.  Run the figures for yourselves.  If you put $275 a month away for 10 years you will have “saved” $33,000.  If you did not deposit another dime and just let that money sit for 20 years and collect interest.  At 8% interest, you would more than triple your money, and end up with a little over $112,000 .  If you waited ten years to start saving, the same amount ($275/month) you would have $50,000 less 20 years later (assuming you earned the 8%  interest).

If you have never saved money, start small and increase the amount you are saving each time you get a raise.  Although I didn’t start until my 40s, I did eventually learned to put the biggest part of each pay increase I received into savings or an IRA.

Another tactic is to save part of those birthday checks from grandma or your tax refunds and don’t forget the pocket change… it adds up.  We picked up a change sorter and put our “savings” into a special vacation fund but it would have been even better if we had put half of those “bonus pots” into a savings for 20 years.  Now that would have made for really nice vacation fund for our golden years.

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