I consider frugality an art form and a religious conviction. My upbringing included the adage, "Anything worth doing is worth doing well." Recycling and reusing just about everything was learned at my mother's knee and she is still a master of the art!
My faith instructs me that all things are gifted by God and so I am compelled to be a good steward of my gifts. [The highest heavens belong to the LORD, but the earth he has given to man. Psalm 115:16]
My limited income implores me to be judicial in my spending decisions. Even when my income was more than adequate to allow to me to live quite comfortably, I found great satisfaction in coupon saving totals and resisted paying full price for anything, just on general principle!
You may think that saving a few dollars a week won't make any difference in your life over the long run. Before you decide against hopping on board this program, let's do a little math. If you manage to save $100 a month the first month and every month for 12 months, then the second month save an additional $100 every month for the rest of the year, and so on: you will have saved $7,800 at the end of 12 months.
Just to drive my point home, I've included a fairly realistic example of how small changes can equal substantial savings, and the prices I used are probably low. Start out slowly! You don't have to make all these changes at once. In fact, you'll be more like to make the changes if you introduce additional changes gradually.
Example - Skip fast food 1x a week for your family of four (2 adults and 2 children)
Medium Value Meal avg. cost: $6.50 x 2 = $13; Kid's meal avg. cost: $3.50 x 2 = $7 = Total saved per trip: $20
The average American family eats fast food, delivery meals or takeout meals several times a week. If you eliminate 1 fast food meal a week you'll save $80.00 a month using the example above. Over the course of a year, you will have saved $960!
Read the rest of this article posted on Associated Content. Please click through and read the full text of How To Live Within Your Means and Thrive. Thanks!
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• Garage sales
• consignments
• eBay
• selling collectibles
• rent extra rooms
• working part time (deliver pizzas, newspaper, home-based business, etc.) or overtime
• reduce payroll tax (if you get big tax refund – increase withholding allowance on your W-4)
• sell off EE savings bonds
• sell a car with huge loan balance and replace it with a cheap, reliable, economy car using cash
• start a money making hobby or a shade tree job
• invest in really cheap stocks at spectacularly bargain basement prices
• cut out unneeded items – dining out, vacation, Starbucks coffee, cable TV, trips to the mall, vending machine purchases, etc.
Any more creative ideas? I have more money saving ideas at my posts. Search them by using key phrases for information at gather.com (include the quotes):
"I found some money in my wallet"
"Personal finance Topic"
"Insane financial practices"
Let's say that you like to buy Starbucks coffee at $4.50 five times a week. Assume the price increases at 3% annually due to inflation. If you stop buying this coffee, and instead invested the money used to buy Starbucks monthly in a mutual fund increasing at 10% per annum inside a Roth IRA from age 26 until age 65, what is the balance at age 65 (after taxes)?
$1,317,604 <==on the 1st day of age 65
$1,473,467 <==a day before the 1st day of age 66
If you start investing from age 19 until 65, the balance at age 65 is $3,083,004
Invest in 401(k)
Save as much as you can into 401(k) at work. Most employers throw in free money, with no tax. Plus you get tax rebate on every dollar you contribute. If you're in the 25% bracket, IRS actually gives you $250 free money for every $1,000 you save. And right now, the mutual funds are on huge sale!
Pay down mortgage
Another good way to save BIG money is to pay down on your mortgage fast by adding additional payments to the principle reduction. Say you have 6.5% 30 year mortgage with your $150,000 mortgage loan, and you pay additional $100 each month toward your principle. You can save $52K and 7 years off of your original term.
Almost a free car
This is tongue in cheek, do you ever consider investing $30,000 into a very desirable investment that will guarantee to be worth $9,000 in 5 years, and there is a cost of ownership of $4,000 in insurance, and another $5,000 in energy cost to run the thing over 5 years. Would you put your money into such an investment? This is a new car that you are investing in.
Instead, buy a 4 year old reliable used economy car at $12,000, pay less to insure, and less to run it, and you can actually sell it at $4,000 after 5 years.
The trick is to invest the difference between the new car and the used car ($18,000 over 5 years at 12% investment rate in a Roth IRA) and with compounding interest, and the balance after 5 years is an amazing $25,000 tax free money.
You don't have to be a rocket scientist to figure these numbers out!
I have lots of other money saving ideas and tricks. I have posted my personal finance advices elsewhere on gather.com.
I suggest searching for key phrases at gather.com (include the quotes):
"Personal finance Topic"
"Interesting Statistics on Personal Finance"
"I found some money in my wallet"
"Insane financial practices"
Money Problems Among the Elderly
According to the Boston-based NationalConsumer Law Center
(articles on"The Life and Debt Cycle", July, 2006)
•· 93% of retirees carry some debt
•· 30% of retirees describe their debts as a problem
•· 27% of homeowner retirees haven't paid off their mortgages
•· 24% of Medicare beneficiaries report financial problems from medical bills
•· 14% of 64-year-olds face retirement with a negative net worth
•· Average credit card debt for 65 to 69 year olds grew 217 percent over the last ten years to $5,844
•· Medicare leaves seniors paying much of their medical bills. Seniors average paying $3,500 of their own medical costs each year. That's a 45 percent increase in 10 years.