It’s hard to pick up the paper or browse a news site without seeing talk about the economy.  Times are tough, or are they?

Personally, I’m not as affected as much as others. I don’t own a home, so no sub-prime mortgage to worry about not being able to pay back. I’m not trying to get a car, so no car loans to deal with. I’m employed and it’s pretty secure. But I am taking hits here and there.

My utilities rates have gone up. The cost of produce, meat, dairy, and dog food have also seen increases. Slight, but these are pretty frequent purchases, so it does add up.

The holiday season is just around the corner. Will we see record low spending this year? Money’s tight for a lot of people. Though I’ve been doing okay, I really need to get some savings and pay off my credit card debt.

I don’t have that much credit card debt. Actually, it’s nothing compared to most people: just $1,244. I should have paid it off by now, but I’ve been only paying the minimum, which has been about $30 - $40 a month.  If I continue just paying the minimum, it will take me 14 years to pay it off, and an extra $1,407 in finance charges.  This calculator at Bankrate.com is great for putting things in perspective.  If I up my monthly payment to $150, it would take me only 9 months to pay off and just an extra $88 in finance charges.  What a difference!

So can I do $150 a month?  Of course I can, but only if I change my habits.  I eat and drink out A LOT, too much actually, and I always use my bankcard which makes it so much easier to lose track of how much money you’re spending. Last month alone, I spent about $600 on restaurant and bars. If I had put that towards my credit card instead, I’d be halfway towards paying it off! But alas, I’m a big spender, not a saver, and I need to change that. So after doing a bunch of reading online, here’s some tips, tricks, and common sense to start saving money and paying off debt.

• Stop using the credit card - easy for me, I hardly use my one and only credit card; the debt I have accumulated on it is from a large purchase made a while ago
• Carry cash - it feels more “real” when you actually have to pull out currency. It’s been so easy for me to just hand merchants my debit card to pay for things. At the end of the day, there’s no tangible evidence of how much I’ve spent. However, if I leave the house with say only $50 in cash, I can come back knowing I won’t spend more than that.
• Stay home - yes, I go out for food and drinks a lot. That’s my biggest vice. I could be saving a lot of money if I only stayed home and made my own food. This doesn’t mean I have to sacrifice fun. I can invite friends over, play video games, read, watch a movie, etc.  There’s no excuse for me spending $600+ a month on “going out.”
• Make my own coffee - though I’m not a big coffee drinker, several times a month I do spend $3-$4 per drink at Starbucks. Quite unnecessary and very easily remedied.
• Go through my existing wardrobe - I don’t need to buy new shoes or clothing; I have a lot already. They have just been forgotten, pushed into the back of my closet somewhere. I don’t have much storage space at my apartment and a lot of my clothes are just stuffed into a pile in the back and forgotten. I know that if I simply go through what I currently have, I’ll find rarely worn items and satisfy my urge to buy something new.
• Unload and sell - in line with all that above, there’s a lot of “Why did I buy that items?” that I wouldn’t wear. Instead of taking space in my closet, I can try to sell them on Craigslist or eBay.
• Cut back on fixed monthly expenses - I don’t have many “unnecessary” expenses. I do consider DSL to be a necessity! I guess my only luxury expenses are my cellphone, my monthly Rhapsody music subscription, and my gym membership. Technically, those are things I can eliminate, but I’m not gonna.
• Read grocery store circulars - I’ve only just started doing this and it has saved me a lot of money. Instead of going to the grocery store and buying impulsively, I read through the circular to see what’s on sale and plan my shopping trip and meals accordingly. Whenever there’s a big sale, I make sure to stock up. I’m also paying more attention to the unit price in order to better compare labels. For example, if I’m buying tuna, the prices vary depending on the brand and the size of the can. However, the unit price for all of them are the same, you’re paying such-and-such cents per ounce (or whatever). It makes it easier to compare prices if you see that Brand A costs 45 cents per ounce and Brand B only costs 36 cents per ounce, even though Brand A may seem cheaper just because it’s in a slightly smaller can.Besides dog food, I really don’t care about brand names and have always bought whatever was on sale, but now I need to make sure I compare unit prices to get more bang for my buck.
• Budget - this sounds easy, but a budget is really hard to stick to. I need to set aside X amount of money per month for Y expense. If X runs out, then no more of Y and no cheating! So if I allot myself $100/month for going out and only halfway through the month I’ve spent it all, I need to not go out until next month and learn to deal with it. This is easier said than done, but I think maybe I’ll use the envelope method to help.
• Ask myself “Do you really need this right now?” - I’m an impulse buyer, I’ll readily admit it.  I buy something because it’s on sale or it’s pretty or it’s new.  Rarely is it something I need, and more often than not, once I have it home, my interest has waned.  So I am conditioning myself to pause (very important!) and ask “Do you really need to buy this right now?” or “I know you WANT this, but do you need this.  You don’t currently have this and you’ve gotten along fine without it, why do you need it now?”  This has helped tremendously and stopped me from buying “cute” and “convenient” items.  Sometimes when it’s something I still really want even after asking myself if I need it, I force myself to leave the store without it by saying “If you still want it in the morning, you can have it” and more often than not by that time my desire for it is gone and/or I’m too lazy to go back to the store.

A lot of the things above are common sense.  Live within your means. Don’t spend unnecessarily and reevaluate what you have and what you actually need. I think if more people did this, they wouldn’t be in the financial trouble many are.  I came across a political cartoon today that I think sums it up perfectly:

The Grapes of Wrath, 2008

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