The worst economic headwinds to roar across the United States and the world have blown since late September, knocking people who never thought they would be out of work or out of good paying job. Indeed, among the Big 3 automakers, at least one will almost inevitably go under. Last weekend, my local Sunday paper, which usually carries over 200 jobs, was down to about 100. The stock market has risen and fallen, risen and fallen unlike anything I have ever seen before. And the projections for 2009 indicate that the fierce north winds blowing through our economy are not about to shift to more southerly breezes.
The skies that were once so full of people scurrying here and there to celebrate Thanksgiving and Christmas are not quite as full. More and more people are staying at home this year. As of this writing it is Wednesday, November 26, so while I don’t have hard numbers, I expect the tourism industry to post lower than normal numbers. And Christmas shopping? My Man of God, who has two kidlets still at home, has decided that there is only going to be one gift for each of them.
People are cutting back, and that is smart. In fact, the purpose of this paper is to underscore the importance of cutting back, of creating a budget and sticking to it.It is not very hard to do. In fact, it is the most responsible thing to do. You know, the Scriptures preach and teach good stewardship of resources. Often as Christians we continue to ask God to bail us out of this, bail us out of that. We constantly ask His forgiveness for wasting the resources He so kindly blesses us with. We “repent,” and then we do the same retarded mess again. Well, I have realised one thing over the last year: One day, He is going to grow tired of constantly bailing His children out, and He will say, ” I am sorry, but I am throwing you at the mercy of your creditors.” Even this is an act of love, for God is the Master of using tough love when we don’t quite get it.
Mrs. K and I will be the first to admit that we are sometimes guilty, so I am preaching to the choir–to myself, and to my household. We have run up credit by way of using our bank’s courtesy pay policy, we have used the automatic debit thing that is so popular now, that many creditors or vendors almost require now–and we have racked up a series of overdrafts. Our bank is gracious, however; they allow us to take advantage of a thing called a repayment account, where we can transfer our overdrawn amount to a separate account, and make payment arrangements on it. For instance let’s just say that we are $400 in the red. Instead of taking the money to bring the account current, as many banks will do, or charge us a significant fee every day the bank is overdrawn–they allow us to pay it back, with smaller payments until it is current. While it takes a tremendous load off of us–it can be financially exhausting. It can keep one from really moving forward all the time if they are constantly in the position of having to pay that danggoned bank!
So how can situations such as these be avoided? This may seem like an obvious one, but it bears being said: Please, please, please, don’t spend more money than you have. If you are going to use a credit card, don’t place on it more stuff than you can pay off in a month, paying it well before the due date. It is wasteful, especially now. These are days when you don’t know from one day to the next whether or not you will even have a job. Learn to distinguish between wants and needs. Groceries are a NEED. Cell phone minutes, or that new treadmill you saw at a Macy’s showcase window recently are a want. Save up the money if you want these items, and please pay cash for them. If you can’t adhere to such policy, then by all means cut those suckers up and toss them away! Otherwise, what will happen is you will find yourself in a tidal wave of debt, a tsumnami of heartache. I am not talking to you about anything that I have not lived. At one point in my life I had credit card debt as huge as Mount Everest. At first I was able to keep up with the payments, they were so small. But as work continued to elude me, I found myself in the position of not even making the minimums. I drifted further and further behind, to the point that I simply couldn’t keep up. Then came the collection calls. I made promises to pay by such and such a date. That would stave them off for awhile, but the wolves came back, fiercer than ever. Until the point that they were threatening to garnishee what little wages I had. And I went through a period of being garnisheed. For those of you don’t know, it’s when the County Sherriff steps to your place of work and demands that a debt repayment be enforced by taking up to 1/4 of your income every week. Up to two of these and you can be terminated. A typical boss does not want someone so irresponsible working for them, period.
To make a long story short, I filed Chapter 7 bankruptcy. I won my case, but it taught me something: No more credit cards. Oh yeah, I have had offers since my bankruptcy case went through, but they all have wound up in the same place: the trash.
Second, if you have food at the crib, don’t go out to eat so much! For even if you go to places like McDonalds, Burger King, or Checkers, and order from the Dollar Menu, that stuff adds up after awhile. Eat at home. Eating out is habit forming, and I do not deny that the food–the Whoppers, the fries, the cookies and creme cake, all taste good. Now mind you, I didn’t say such foods were good for you, I just mean that they TASTE good. My wife and I usually celebrate significant achievements, milestones, etc, by eating out. That is okay maybe once a month to break up the old grind. But every night? No way.
Why is Koolbreeze saying all of this? Well, while it doesn’t seem like much, especially when you order off the dollar menu–understand this: It adds up very fast. For example, on a typical trip to Burger King, I will buy two Junior Whoppers with cheese (about $1.39 a whop), a fry ($1.00) and a drink (also about a dollar). You are looking at just over $5.00, which doesn’t seem like much. But let’s say you do this twice a week. You are looking at about $40.00 a month, or $480 a year, just on junk food. That is what many pay for rent per MONTH!
Third, if you know you cannot afford a standard mortgage, don’t buy a house. What is a standard mortgage payment? Maybe about 600-900 smackers a month. Even if you have that principal job at Suburbia South Middle School, or that $15-plus-per hour job at Green Bay Packaging–with the way things are going now, it is feasible that the district could close that school to save money, and as a result you may not be back teaching next year. Or Green Bay, having been hit with a reduced demand for boxes, may begin laying off people. You, who have very little or no seniority, may end up being the first to go. To make things even worse, let’s say you do not get a job right away–or are forced to settle for a lower paying one. You won’t be able to handle that mortgage, and sooner or later your lovely home will go into foreclosure. If you even think you won’t be able to afford a house, it is better to rent.
Fourthly–during these rough times, it is best to go out to plays, the movies, etc., as little as possible. Watch TV, or rent your own movies to view at home. Make pizza and ice cream part of your monthly grocery budget, and enjoy snuggling and cuddling to that. The standard price of a movie is about maybe $7.00. And that is for only one person. You want to bring a date? You may find yourself paying $15.00.
Fifthly, while I do realise that as of this writing, gas prices are kind of low at this point…go green when you can. Ride a bus, or a bike. Instead of having to pay bus fare every day you have to go to work, buy a monthly pass, if your city has one. If you decide to pay out of pocket, you are setting yourself up to waste some big money. Let’s say the average bus ride to and from work is about $3.00. Assuming you work five days a week, man–you are looking at about $15.00 come the end of the week. Multiply this by 4 weeks of the month? That is $60.00 towards transportation. Multiply this by 12, and you are going to wind up with $720 a year just on transportation. In my town, bus passes go for just $45, and they are good for unlimited rides all month long. In so doing I have saved $15.00 a month, because passes are $45 a month.
This list of cutbacks in the budget are by no means exhaustive. What I have attempted to do is share with you some things I have learned about money and how fast it can get away from you. These are things that keep you from saving money from week to week. In times such as these, having a good savings account–monies you don’t touch unless there’s an emergency–becomes paramount.