A recession can certainly create a shift in perception. But when the walls of comfort begin to crumble, the way a person looks at their situation is a personal choice. Initially my reaction was fear. It wasn't until I bushwacked through the panic did my perspective change from fear to appreciation. I worked hard to remove the negativity.
After many months of worrying myself ragged about our financial situation, I began to study, soul-search and write myself out of a worried state of mind into a strong and determined one. Then I began to realize it was me, empowering the dark shadow that was hanging over my life. When I made the decision to redirect my focus on my family, in return I received a gift. An insight on what my life really could be like, just as it was, right where we were. I felt a shift take place inside of myself, an openness. It was like finding the key to open my own heart. Each day I moved closer, like on a road trip, to the destination of recognizing how fleeting life was. I grew to understand how important it was to take the time to celebrate the life I had and to give thanks for all of the good fortune that was presently in my life, not dwell in what I may or may not have tomorrow. I learned to live in the present.
Like hiking in a forest, with each step, deeper into nature, an authentic connection grows. I followed a trail that lead me to a deeper understanding and connection to gratitude. To truly be thankful is to appreciate what you have. If you appreciate what you have, you care about it, and you don't waste or take things, or people, for granted. As I formed now habits of gratitude, with it came a desire to be smarter about money. I began to look at frugality as a stepping stone toward a life of managing money without stress. This meant changing some old ways of thinking and replacing them with new ones. This is a continuous work in progress as I regularly gather new information about managing money.
Living Within Your Means: How do you spend less than you earn? There really is only one way, and that is by following a budget. A month can fly by quickly, and when you live a busy life it is so easy to lose track of what you're spending. I began my new budget with a standard three-ring notebook. On the left side I write down any earnings that come into our household, and on the right side I write down what must get paid out. Don't panic if you're bills are more than your earnings when you first begin, it's temporary. An important reminder is that your current situation is not a permanent one, and the time you are putting into organizing a budget is what will help change your circumstance.
Credit Cards and Debt:No matter where you stand in your current financial situation, believe that baby steps will make a difference. I spoke to many families like mine who faced terrible financial hardship since the recession hit American in 2008, everyone's circumstance varies, but going back to basics was the only way to start over for us.
Turning to credit cards was a regretful but necessary decision when our family began to struggle financially. Forgive yourself for errors in judgment you may have made along the way and just keep moving forward from where you are today. When our family got back to receiving a regular pay check again, the climb out of the hole was such a slow process because we had to deal with debt and still pay our regular living bills. The new credit card laws that passed in congress under the Barack Obama administration were very helpful when we began our baby steps. The new credit card billing statements now clearly show how long it would take to pay off a card if we only made the minimum payment and how long it would take if we paid a little extra. That little extra makes the difference between three years and eight years! (including the interest) No matter how much debt you have, and how bleak your situation may seem, if you stop using your credit cards and continue to make payments above your minimum payment, you will see change! Eliminating debt is an essential step to stop the wheels from spinning. The only credit card we use now is American Express, a credit card that must be paid in full every month. We use it for gas, groceries and emergencies. They have a very good reward system. It also makes it easy to see how much we spend on gas and food every month.
This website gives clear and easy explanations of laws that credit card companies must follow. For instance, credit card companies can no longer allow you to go over your limit on personal accounts (not business), and then charge you an outrageous over the limit fee, unless you "opt in" for it. If you have credit cards, this is a site worth visiting.
Saving Money When There Is No Money: Opening a savings account and having a direct deposit from your checking to your savings as an automatic deposit system is really the way to go. Even if you only begin with a very small amount, like twenty dollars per pay check, and then raise the mount when you can. If even this is too big a step, then begin by saving your change. I have a basket in our living room that sits in a corner near our computer desk. If we come home with change in our pockets or if I feel my own wallet getting heavy, I empty the change into it. Grocery stores now have those convenient machines that you can dump all of your change into, a cash voucher pops out with the amount, and the grocery cashier will give you the amount in dollars. There is a small fee to use the machine, but it is worth it for the time that you save from rolling all those coins yourself! You could always put that money in a savings account. When my husband was only working part time and money was super-tight, I liked seeing change in that basket knowing that if we needed milk or bread before the next grocery run, that I could always grab a few dollars in coins from the basket. The purpose to saving money is to have some when you need it, or to save for a specific item that you would like to purchase, pay cash and own it, instead of it owning you.
The Envelope Method: When I was nineteen years old, four girl friends and I planned a summer vacation to the province of New Brunswick, a twelve hour road trip from where we lived. We all had a week off, a free rental car that one friend's father got for us, and a very limited budget to make the trip happen. I was the trip planner. I found an affordable, rustic cottage by the ocean and calculated how much it would cost for each of us to go on this vacation together. That was when I pulled out the envelopes. I remember sitting at the dining room table at my parent's house with white envelopes and wrote on each one: gas, cottage, food, misc. Once I figured out the amounts, each girl put their shared amount of cash in each envelope, and when it was time to leave, we put the envelopes in the glove compartment and used the money as it was needed. This organized method kept us on track, and made sure we had enough to pay for all of the expenses of the trip. I think the envelope method could be used for any set goal, like saving for a specific item, or even to budget your monthly bills. Organization and knowing how much you have, and how much you must spend every month is a huge part of getting any kind of grip on personal finances. It's a job. One that pays in the long run.
By Patricia from Maple Falls, WA
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I really enjoy reading your difference ideas of how to save money. In these days of not having much money, we need all kind of ideas. I really like the envelope method. I will give it a try. I save all our change and a month before Christmas I turn it into paper money and that is my Christmas money. It is the only way I can do Christmas and not worry about going into dept.
It's definitely all about attitude and not taking life and it's comforts for granted! So many people nowadays only think about living in the moment and don't think about the 'what if's' of the future whether that be tomorrow, next week or next year! Although things are so tough for so many right now I think (and pray) that lessons are being learned about going back to a simpler and more appreciative life that we used to have.
Your essay has a lot of good ideas for saving money. Thank you for the links you provided. I printed out the budget worksheet and subscribed to simpledollar. I'm retired and it is difficult trying to get by on Social Security, a small pension, and savings.
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