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When the Going Gets Tough, We Must Get Tougher

Financial Journey (featured column)
by Karen Kuebler

The past several months have created some very tough times economically for most of us. The stock market has been extremely volatile and has negatively impacted the retirement portfolios of many, including ‘yours truly.’

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Rates on CD’s are puny, to say the least, but at least offer safety of the principle. It has been very discouraging, and actually has been worse than my ‘worst case scenario’ planning when we were preparing for retirement.

I decided at the beginning of this year that we needed to do some things with our own budget to feel more in control of our lives and economic situation. So what have I been doing in my efforts to gain control? Actually, nothing really new. But I have developed greater resolve and recommitment to the frugal ways I’ve needed to exercise in leaner times.

A first step involved reducing the amount of money we have been drawing on a monthly basis from our retirement accounts. This accomplishes a few things – we’re forced to live on less each month, we’re not depleting our retirement accounts at an accelerated rate, and it reduces our tax liability for this year.

The second step was increasing the amount we have deducted from our checking into our money market savings account each month. Even during retirement, I’ve always continued the habit of ‘saving’ a certain amount each month into a liquid money market account. This might seem absurd to divert money from one investment account into another, but I strongly believe the ‘habit’ of saving should be a lifelong practice.

Since I was so discouraged at the lack of growth of our other investments, I decided to increase the savings we can control. Again, this forces us to live on even less each month but I get the pleasure and security of watching the savings account increase. Next steps involved drastic cuts in spending to our ‘bare bones’ level, now that we’ve reduced our income significantly.

My husband and I have each taken a monthly allowance so that we can enjoy certain splurges. This greatly reduces the anxiety of deciding what should come out of the household budget when it might be judged as an extravagance by the other person. If couples have a tendency to argue over these type of expenditures (not that we do), I strongly recommend allowances. It will actually save the household budget in the long run. Our first sacrifice in the spending plan was to reduce our allowances significantly. We now take a third of what we were taking. This forces us both to carefully consider our personal splurges.

We’ve cut way back on our recreation costs. We’ve been checking out all kinds of wonderful videos and DVD’s from our library, which has access to 20 branches out of the immediate vicinity! We’ve also traded videos and DVD’s with friends. We haven’t had to rent a movie in months.

We take advantage of recording movies from our Cable channels -- giving up Cable isn’t something we’re willing to do since movies are our greatest source of entertainment. We are limiting our visits to the movie theater to once a month at matinee prices, pack our own snacks, and are extremely selective about what we’ll see.

We’re having friends over for dinner and going to their homes rather than frequenting restaurants. If we do go out, we use a 2 for 1 coupon and go earlier in the day when prices are lower. Because portions are so large these days, we pack half the meal to bring home for another time. When we don’t have a coupon, we split a meal which provides an ample amount of food for us both.

We’ve also had friends over to watch a favorite movie or play a game. Sometimes we’ll just have friends over for dessert and coffee. I’m working on simplifying my life, which includes the preparation that goes into creating a fun and active social life.

We haven’t bought books for quite a long time – reading is another favorite source of entertainment for us. When I find a book I am interested in reading, I check our library catalog online, and most of the time I can locate the book through our great inter-branch system. We live in a fairly rural area, so I imagine there is even better access for those living in or close to a large city.

When my magazine subscriptions run out, I am not renewing them. It’s amazing how much money per year is saved, one subscription at a time. We go to the library once a week and catch up on magazines and USA Today and take advantage of the free air- conditioning.

We love to go to Barnes & Nobles during the week and sit in their comfy chairs while reading the latest books. I can get through an entire book in a couple of visits. If I find a ‘must have’ book, I’ll check Ebay, Half.com, or Amazon used books. I usually find what I’m looking for a fraction of the original price.

Phone bills offer another area for us to save, since all of our children, friends, and family live in other states. We dropped our long distance carrier which has saved hundreds of dollars a year. I purchase long distance minutes from an internet site. Calls are 2.9 cents per minute any time of day. Calling cards are also readily available at 3.5 cents per minute in large discount stores.

We have a cell phone with 2000 weekend minutes and 350 any-time minutes -- we take advantage of this to make most of our long distance calls. We pay for one additional service through the internet at $3.95 per month. The service provides an online answering machine which enables us to receive messages while we are online. Since I do spend a fair amount of time online, it is much more cost effective than paying for a second line. This service provides caller ID and downloads the message within seconds of the call. If it is important, I can return the call immediately.

Groceries offer a great opportunity for cutting expenses. I actually budget $125 a month in our spending plan but have been able to get by on $60 per month the last few months. I have carefully inventoried our pantry and freezer and developed menus that will cover us for at least four months, if not more. We purchase milk, bread, and produce and I still buy loss leader items on sale each week. I could probably cut the $60 per month down further, but for now I’m content with that amount. I continue to stock our pantry and freezer with items on sale that fit with our likes and needs. We don’t purchase junk food or sodas – this helps streamline our waists and pocketbook!

We have continued to take vacations to visit children and share new adventures. Afterall, that is what retirement is all about. But, we have become even more creative in saving money while traveling.

Since we are retired and have the time, we are using our SUV to discover America. We carry our food in a cooler. The savings in food costs while traveling is phenomenal. When we arrive at our destination, we visit local grocery stores, Depending on where we are staying, we can either keep food in a refrigerator or continue to use our cooler by filling with fresh ice each day. This does require more planning before traveling, but the savings are well worth it. An added bonus – when we returned from our vacation last week, neither one of us had gained any weight! I think that was a first.

When visiting children, I have offered to cook meals and/or purchase food at a local grocer rather than ordering take-out or going out to dinner which was our prior pattern. It’s actually fun to bring along favorite family recipes and share them with our children and grandchildren. They get to ‘experience’ Grandma’s cooking – like it, or not!

Another source of savings while vacationing has been the Entertainment Coupon Book. It offers a myriad of discounts to attractions, restaurants, and hotels nationwide.

We save on our lodging by using the Entertainment Card, AARP, or discount coupons available at Denny’s Restaurants nationwide. We always make our pit stops at Denny’s – we never eat there, but they have wonderful discount guides by the entrance!

I have been planning ahead for Christmas, purchasing gifts throughout the year. I am able to find special items of interest for each individual and often buy them on sale. I’ve been making some gifts, as I enjoy a variety of hobbies including beading and cross-stitching. I’ve just about completed my Christmas shopping. I usually try to get all of the gifts wrapped around September or October – it really reduces the stress around the holidays.

These are a few of the strategies we have been using to tighten our belts during these tough times. I know it is not an easy time for any of us. It brings to mind what our grandparents and parents must have gone through during the Depression years. I like to treat it as a challenge. By thinking and acting resourcefully, it is amazing what we are capable of doing!

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Copyright © 2002 by Karen Kuebler. All rights reserved.

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