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It’s a Rollercoaster Economy, but Hang On and Survive the Ride

06 Jan

The world economic recession is lasting a lot longer than we would all have liked and for sure we are all feeling the pinch. For some, it’s probably seemed more like a stranglehold or a headlock because unfortunately, Jamaica had been experiencing its own challenges, which included a steady trend of job losses, long before the world market officially took a nose dive in 2008. It’s indeed looking dread out there. Continuously escalating prices of goods and services, notably gas, food and electricity, are pressuring diminishing incomes – or in some cases like mine, disappearing ones – and many incomes have been yielding to the pressure. Job security is a thing of the past. Maybe for you it’s been a tailspin but don’t despair, there are practical steps that you can take to alleviate the pressure and keep your sanity.

Now let’s examine the situation further. When prices increase and their purchasing power is limited, the first thing people think of doing is cutting spending. Right? This is not necessarily a bad thing, as according to the experts: a general rule of thumb if you want to improve your personal financial situation is to spend less or save more or both. If you are interested in saving money on your bills, it requires thought and planning. Soooo… prepared to tighten that old proverbial belt and live a leaner life – probably literally as a few pounds are sure to go? Then go further with me as we get into some of the ways the experts recommend (and many I’ve done) to keep grey hair at bay.

Start by knowing how much you spend.

The first step to saving money on bills is understanding how much you are spending. Look at your past spending, so that you know exactly where your money is going. Itemize your income and expenditure. This is important. Before you can reduce your grocery bill, insurance bill, utility bill or any other bill, you have to know where you are starting. Figure out how much you are paying on each bill.

Evaluate you needs.

After you figure out how much you pay for each bill, you need to evaluate your needs. Does the service or the products fit your needs? Are you watching all those channels you are paying for on cable? Are you really eating all that food you buy or does a lot of it end up in the garbage? Is your car old enough to consider making a switch from general coverage to third party for your motor car insurance? Carefully consider what you need. In some cases, you will be able to save money by cutting back on something you don’t actually need.

Shop Around.

Your next step is to shop around for a better price. If you want a better price, and to accurately compare different options, you should know what you need. Especially consider products that you buy regularly at the store. Do you buy several of those items per month and can get wholesale prices on them? It’s a great way to save on grocery bills. Find out which stores offer the best prices on books, clothing, food, etc, while meeting your needs.

Create a plan.

In some cases, saving money on your bills is more about creating a plan to reduce consumption than it is about shopping around. Utility bills are a perfect example. Look for ways to save energy so that your electricity bill isn’t so high. If you use air conditioning, plug cold leaks in your home to increase the efficiency of your cooling system. Also, turn off the unit when you no one will be occupying the room. Why cool an empty room? Do the same with your fan. Turn off the computer and TV when no one is actively using or watching them. Consider purchasing a newer fridge as these are more significantly energy efficient than those made 10 to 15 years ago. Cut back on water consumption.

Creating a meal plan, and a shopping list from that plan, can help you stick with what you need at the grocery store, and reduce your impulse spending. Taking children shopping with you could add to your bill as well, as they tend to convince you to buy items that are not on the list. Isn’t it difficult to say no to that sweet-faced child? Mine has a little facial expression that he gives me that just plays on my guilt. Though I try hard to hang tough, I usually give in on some item. Therefore, unless it absolutely cannot be helped, shop minus the little darlings, and once you make the purchases and get them home, it’s a done deal, no matter the complaints. In addition, cut back on or eliminate dining out or take out. Prepare most or all your meals yourself. Can’t cook? Pull out the apron because now’s the time to learn.

Limit impulse buying and take a look at your indulgences (high end coffee, alcohol, luxury items, clubbing or partying, the piece of pastry you ‘must have’ each day), household durables (electronics) and services (salon treatments, house cleaning). If you purchase less expensive items, consume less or swear off alcohol, party less frequently or less expensively, have the pastry say twice per week or not at all, and put off purchasing luxury items until the world economy is relatively stable, you will save a bundle each month. Just think if you spend $5,000 per week on such items, and were to even reduce this by $2,000, you would have saved $8,000 per month! Now who couldn’t use that extra money? And do you really need to purchase that electronic item now or can you make do with the one you have already? Instead of the weekly trips to the salon, you could try at-home do-it-yourself salon treatments even twice per month and reduce the number of house cleaning days, thereby spending less on products.

Cut back on the gas bill by reducing unnecessary car trips. Do you really need to go to the supermarket at 9 pm just to buy ice-cream because your stomach is suddenly growling for it? Why not wait until you’re doing your general grocery shopping and pick it up then? Another way to save on gas is via carpooling. So get together with family and friends and work out a travel schedule for trips to and from work, church, and picking up the kids from school.

Service and other fees and interest charged by banks and other financial institutions is another way that you could be spending more than you realize. Maybe it’s time to get rid of that credit card or reduce your usage of it so that you’ll be able to pay each bill in full and on-time. This goes for all payments to financial institutions. As much as possible, make your payments in full and on time. No more late fees, over-the-limit fees or additional interest charges. Debit cards usage also incurs a cost if the machine on which it is swiped is not your bank’s. Ask to have your card swiped on a machine that your bank supplies. And as much as possible make purchases with cash. When carrying out transactions at the bank, use the least expensive method. If it’s less expensive to carry out your transaction using the ATM versus over-the-counter, use the ATM.

Ok, so now that we get the big picture and have committed ourselves to diligence and planning re our finances. In the future periodically revisit the services that you have, and evaluate your buying habits. This can help you make adjustments to your spending so that you keep saving money on your bills, and continue heading down the path to financial stability. Good luck!

 

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