Saving money

Benjamin Franklin said:  “A penny saved is a penny earned.”

How many concentrate solely on what they earn and ignore what they can save?

As we know, gross earnings are not what we keep.  After tax deductions it becomes net earnings and you can’t count on that since there are income taxes at the end of the year leaving one with a net-net.

Where can one save? 
The cost of energy takes much of our money for electricity, gas and oil.  Saving on energy alone can make a big difference.

Savings on Gas: 
*Walking or riding a bicycle instead of driving.
Savings on Electricity: 
*Turning lights out when not in use or needed.  Opening the blinds/shades and allowing the sunlight to light the room.
*Hanging clothes out to dry instead of using the dryer.  Did you know that clothes dryers are a leading cause of house fires?  Turning on the dryer and then leaving the house is a high risk.
*Turning on the dishwasher only when it is full.
*Minimal use of kitchen appliances. The microwave takes much electricity.
*Turning off the PC and TV when not in use.
*In winter and summer, covering the windows with shades or heavy curtains to keep out the cold or heat. 
 *Wearing heavier clothing in the house instead of turning up the heat.
*Using the AC only when absolutely necessary. One has only to go to a Mall to notice the difference from outside temperature and the over-cooling of the inside.  When workers have to wear sweaters to keep from getting a chill, it is a good sign that the thermostat is set too low.  The car takes more gas when the AC is running. 

Having a financial kitty for emergencies and/or pleasure.  Sometimes one needs to pig out or get out of the house and splurge.  There are always unexpected expenses.  It could be that the car breaks down or an appliance needs repair.  Being prepared can reduce anxiety.

Savings on Food:
Avoid convenience stores where the costs are higher.  Buy staples in bulk. 
Avoid Fast Foods.  Take time to enjoy a meal and not rush the intake.  It is healthier and saves money.
*Avoid Soft Drinks.  They are not only unhealthy, but costly.  Buy carbonated water and mix your own drinks.  In Germany, a Shorle is a popular concoction.  That can be alcoholic or non-alcoholic.  Apply Juice mixed with carbonated water is refreshing and healthy.  White wine with carbonated water is also good.  When drinking pure wine, drink red wine, however read the label to ascertain if there are additives.  Avoid any drink that contains additives.
*Grow a garden.  Instead of spending time and money on maintaining a lawn, convert the lawn into a vegetable garden.  Instead of many potted flowers, use those pots for plants, i.e., herbs.

Saving on Water:
Collect rain water for watering plants and the garden.  A simple barrel under the rain spout will provide soft water for the plants.  Where I live, there is a fee for water and for the canal for waste water.  The fee for the canal is based on the water usage.  By using rain water, there is a savings.  Using drinkable water to water plants is an unnecessary cost to the water department.
*Place a brick (or two) in the toilet water tank.  Less water will be used when you flush.
Being frugal is a way of life.  When I worked for IBM many years ago, every employee had a “THINK” sign on his/her desk.  Many innovations were instituted with employee suggestions. When “Thinking” about how one can save becomes routine, it can lead to a worry-free lifestyle. 

*Saving on interest
Pay off the balance of Credit Cards when they come due.  Making the minimum payment is costly with a high rate of interest.  If you can’t afford to pay off the balance, perhaps you should not have made the purchase using a Credit Card.

Some view being frugal as deprivation.  That is nonsense.  We not only help ourselves, but help our environment.  When we save money, it is not a one-to-one savings.  To have $10 of net savings to spend means you would have had to earn approx. double that amount.

Please add to this list other ways of saving on energy, water or other. 

Whew! Don't know where to add!

My friend years ago taught me to grocery shop based on the cost of a meal, not the cost of the individual items.  She set a budget amount for each meal as a max and then tried to beat it, like a little game.  She had five in her family and found food her greatest expense next to the mortgage.  She shopped bakeries with day old bread (she said it's a week old by the time a loaf is finished anyway; she finished hers a day sooner).  She only bought things in season and did have one of those tomb freezers  in her garage.  Her family only bought cars with mileage on them, never a new car.  She never bought food in packages if at all avoided.  She composted and had a little garden with a few things and herbs and fruit trees.  Her yard just did its own thing - really sort of an unwatered mess of attempts at landscaping without grass. She bought all her furniture second hand and many clothes as well, especially children's dressy clothes that she boiled to be certain they were clean.  She made her own drapes, simple squares with hems on simple bamboo rods with sashes and quite pretty.  She kept a journal of every penny spent and put aside money for the children's education and emergencies.  They went to high school productions for live entertainment and neighborhood bands and church music - many of our churches had great choirs and invited virtuosos in all instruments.  She did hang out some of her wash, but not all of it.  Of course she cut and styled her own hair and cut the hair of her spouse and children.

None of us used the air conditioner for some reason, preferring to sweat I guess (California) and no heat in winter.  The weather as I remember was pretty temperate and windows were always open.  I remember my showers insisted on mildewing...and that was a constant chore.

Oh, for "cleaners" she only used baking soda, vinegar, ammonia and bleach in combinations and concentrations according to the job at hand.  She used baking soda for deodorant (also corn starch) and corn starch on her baby.  We all breast fed at the time, much savings on baby formula, food and babysitters (seldom went out or took our baby with) - healthy babies too!  When it was time for food (around six months to a year) we made it ourselves in the blender.

For parties, we all brought something so it was not a burden on any one person.  We didn't have a "yard man" or hire anything done; our husbands spent their off time attempting to fix things with our help and trying not to break them or get hurt.  My friend, however, could fix anything.  When we got to the last resort, we'd call her.  She was very clever.

Pay your house off if possible.

I was raised frugal, and it really was a gift. I do just about everything in that list. We paid off our house a couple of years ago, and yes, that's a fabulous boost. Stretching it out for 30 years means you pay 3x the purchase price. How is that an "investment?"

LC, I too was raised frugal.  I think we were fortunate in that regard.  By today's standards, we were poor, however we never felt poor.  We always had enough to eat and a roof over our heads.  My mother patched our clothes when needed. Today that is a fashion.
As children, and there were five of us, we had chores to do and in the summer, we worked at odd jobs for spending money.  We learned the value of money.  A portion of what we earned was given to our parents and that was used to purchase our school clothes for the next school year.  When we got home from school, we took off our school clothes and put on our work (or play) clothes.  We were reprimanded if we got out good clothes dirty.  Washing was once per week and my mother used a wringer-washer, and hung out the clothes to dry, even in winter. 
Since we had no indoor toilet or hot running water, we used the galvanized wash tub that Mom used for the rinse water when she washed clothes.  I never felt under-privileged.  We dug the garden and hoed the weeds.  When we lived on the farm, we fed the animals and did the milking.  We also churned the cream into butter.  Harvest time was a busy time of the year preparing for winter.  Cutting and stacking wood saved money on coal.  We always had time for play as it was possible once the chores were done.  During the school year, we played after the chores and the homework was done. 
It was a simple life and as I look back, it was a great life.

Ok, that wasn't my lifestyle, and I'm not pining for it. LOL. I was raised in the suburbs. While I think that learning frugality is a gift, I will say I'm glad I'm able to buy and do more for my family than my parents did. I don't think that there's any virtue in being poor, whether one thinks they're poor or not.

My frugality is largely centered around being able to do great things, but seeking bargains for those things. I look for good-condition used, and the sale rack for just about everything.

Paying off your house is a bad investment if the interest rate is lower than the return you can get by investing the equity in other assets. Nowadays, interest rates are low (but going up), but investments are riskier, so the payoff can be a better idea.

They're pushing reverse mortgages now. Depending on your equity, the value of your house, and the housing market's potential, that might be a viable way to augment your retirement.

Abe, you and I must be brothers. You just told the story of my upbringing. Five kids, an outhouse, and bath water heated on the stove and poured into a washtub. We didn't know we were poor though.

Interest rates have been in the basement for what, 10 years now? Yet, I still see financial "advice" columns discussing retirement account projections using 5% interest from CDs. 

It's not either/or. I have a paid-off house AND brokerage accounts where I chase hot stocks, LOL, and prudent ones as well.

I've never read anything good about reverse mortgages, and always thought they were for poor elderly people.

To clarify -about the interest rate on a mortgage being lower than what you can get on stocks. This is great in theory, but in reality, I don't know what I'll get from stocks. They're so unpredictable, and I worry about an upcoming crash. I took a bath back in 2000 -lost a LOT of money. I've since recovered, but I'm also 13 yrs older. Don't want to do that again. So far I've done alright, but I don't take that for granted.

Home loans are about 4%, right? I'd just as soon save that 4%, know the house is mine (well, unless I don't pay my taxes), and try to get a better rate with other accounts.

If you have money, now is a great time to spend it.  You will help the economy.

Remember, you can't take it with you.   

I think you made a great point Alice.  At the times on which we are reflecting (as opposed to now) the country was coming out of a depression and frugality was the result of fear about the next dollar being secure.

We went through a prosperous phase of high salaries and the growth of a middle class. The spending contributed to economic prosperity though people turned their ability to spend into a waste and greed mentality instead of balancing prosperity with value for the earth.

Businesses grow because people spend.  The thing is, spending can be done with an eye for value.  For instance, if we targeted made in America things, we would pay more (money into the economy) but they might last longer.  A local merchant sells vacuums only made in the U.S.  They are pricier than the ones from Wal Mart and he provides lots of service.  I wonder how many he sells?

I buy entirely too much water in plastic.  Florida water is horrid tasting because of the chemicals to purify it and it's warm from the cold faucet.  There's no such thing as a "cold" shower.  I should put a thing on my faucet (paying money into the economy) and filter it (not putting plastic into the environment.

We just have so many choices today, and some of them are wiser and more eco-friendly than others.  Many eco-friendly choices may also represent a monetary savings (like my water, or re-purposing furniture and clothing and not buying pre-packaged foods).

Al,
thanks for your post.  It's nice to know that there were others who were poor but didn't know it or feel it. 
I had a very rich aunt and uncle.  I knew what wealth was like, but that's another story.

As for reverse mortgages, my son-in-law's mother used that and it turned sour.  When she wanted to sell the house, she had a big problem with the mortgage holder. Best to get all the facts before entering into any such transaction.

There are benefits to owning a home and having a mortgage.  It is the best credit rating one can have so long as the payments are on time.  The interest is also tax deductible, however paying off the mortage is best if one can afford to do it.

I don't know enough about reverse mortgages to comment. I did some research, and the numbers don't add up for me. But if you can't trust Fred Dalton Thomas and the Fonz, who can you trust?

Al and Abe, your stories sound like that of my mom and her brothers.  I had the privilege of experiencing that lifestyle from a safe distance, whenever we visited my grandparents.  Those were some of the most joyous days of my childhood.  I would spend my days doing things like feeding chickens, gathering their eggs, going with my grandad to the fields and gathering corn, tomatoes, etc.  There is nothing more glorious than eating a tomato just picked of the vine, especially when your grandfather carries a small salt shaker in his pocket, just for you.

My mom and her brothers, though, knew they were poor.  They had not always been so.  Before the Depression forced them back to my grandmother's family homestead, ny grandfather had been a successful small town merchant.  And what little extra money he could earn by leaving my grandmother in charge of the family and farm to find seasonal work went toward paying tuition for Mom and her brothers to go to the nearest accredited schools, where they got a far better education, but were constantly aware of the difference between themselves and their classmates.  Moving back to the famr was a cultural shock that they never quite got over.

Frugality is a good thing for those of the middle and upper-middles classes.  For those living in real poverty, it isn't always a possibility.  It seems to be more of a development from growing out of poverty rather than from actually having to live in the condition.  

The memory of living in poverty can lead to a fear of scarcity - one of the unconscious contributors to the practice of hoarding that has led to the current reduction of the size and power of the middle class.

Always good to keep everything in balance.

I once traveled in very wealthy circles and have three of those friends still.  They look for bargains, but their bargains are in a realm I don't get near enough to even consider.  Sometimes it seems strage frugality.  I remember living in Korea and traveling round trip to Hong Kong (expensive) to save money on cameras, tennis rackets and jewelry.  I guess the savings paid for the round trip.

Another friend ate at every Hard Rock Cafe in the world to get free round the world airline tickets.  Look at what they cost...

Another buys all her clothes from Nordstroms and takes advantage of their sales - what she spends on her wardrobe is my year's income in spite of the sales discounts she receives. 

So, each person, as Ann mentioned, has a different perspective on frugality from where they look...

My one friend has horses and has changed vets and boarding to be more economical - the costs for her horses equals my mortgage.

9/12/2013

                 I find it hard to save no matter how hard I try ! I did cut out one thing
                 " NO SMOKING !," that saves $275.00 per month , I've been checking out
                 washers portable, I've seen one Haier, I'm tired of lugging laundry to the
                 laundry room especially in dead of winter....I try to save at the Supermarket
                 these days you have to run from store to store, it's exhausting and a waste
                 of gas !

                                                               Cheers....Joe...

Mr. Joe - you deserve that washer!!  That's only probably a little over one month's savings from smoking.  You'll need the washer for your longer life :-)

Get a washer, Joe.

Quote :

I try to save at the Supermarket these days you have to run from store to store, it's exhausting and a waste of gas !

Yes it is, esp. since there are limits on BOGOF and coupons. I just shop at Walmart's grocery and Sam's. I break up large items into small portions, put them in Ziploc bags and freeze them. Milk, cheese, bread, meat, it all can be frozen.