Dating Tips From The Income Master

A price chart will allow you to open up the Sunday grocery store ad and see if that special on a brick of cream cheese for $2 is really a bargain. When you check your price chart, you will find that you’ve been able to find the same size and brand of cheese for $1.79 before, so it might be worth waiting to buy. Of course, if you are completely out of the cheese and need it that week, sure go ahead and buy them, but if you were just purchasing them to stock up on sale items (the topic of another article) then it is worth waiting.

The first step in creating a price chart is to go through your refrigerator and pantry and catalog the “must haves” – the items you use at least once a month. Some staples in my pantry and refrigerator include onions, garlic, bananas, tomatoes, milk, cheese, orange juice, coffee beans, bread, olive oil, boneless, skinless chicken breasts and breakfast cereal.

After I compile a list of food items, I start recording the best prices I’ve found on the items, being sure to determine costs by size and packaging, as well. For instance, I know that I can find 6 oz cans of tomato paste, a staple in my Italian cooking, for $.25 apiece if I wait for a sale. That is about $.07 less than buying the cans in bulk at my local warehouse store. Because I almost always have the paste on hand so there is never an “emergency” situation, it is a better bargain for me to wait for a sale at my local market and bulk up then. However, nine times out of 10, it is a better deal to stock up on toilet paper at the warehouse store, where I can find a sturdy, good quality roll of 425 sheets for $.41 apiece. Keeping a price chart also allows you to quickly distinguish when a sale is really a sale.

I’ve found the simplest way to create a chart is on the computer and print it out. That way, my price chart ends up being a typed piece of paper that easily folds up and remains in my wallet where I can reference it at any time. In addition, having it on the computer means updates are simple. So the next time, you see a “big” sale on your favorite ice cream, you can quickly reference your price chart and determine that yes, it is worth hopping in the car and stockpiling a pint or two.

One old-fashioned solution to avoid spending your hard-earned dollar on accumulating excess stuff you only use once a year is to learn to borrow and loan items. Its something we don’t really do anymore in this fast-paced, keep-to-yourself society. It harkens back to the old cliché about borrowing a cup of sugar from the neighbor. There is nothing wrong with asking to borrow a ladder once a year from your brother so you can pluck all those pesky leaves out of your gutters in the fall. Is it really worth the cost of buying and storing the ladder when it gets maybe five hours of use each year? I say no.

There is a psychological cost to owning too much stuff, as well. The more stuff you have the harder you have to work to keep it. The extreme of this is buying a giant house and expensive boat and then working 75 to 80 hours a week to pay for the slip in the harbor, the property taxes, the maid, the furniture to fill the massive space, and so on. When you are over-extended in this way, you have no time (or energy) to enjoy the house or boat.

On the whole, having less stuff is also conducive to clearer thinking. Have you ever noticed how simply cleaning your desk or office or living room promotes a feeling of calm and sense of clarity? Too much stuff is like static on the TV — you can’t really see the true picture in life. In the past two years, I have both borrowed and loaned maternity clothes. During my first pregnancy, during the summer in California, I only had to buy a handful of maternity clothes because most were loaned to me by a friend. After my second pregnancy, in Minnesota during the winter, I bought many winter and warmer items and have now passed them on to a sister-in-law who is pregnant.

Like the example above, sometimes it isn’t a clear-cut exchange. Maybe we won’t ever need something from that person who borrowed our cordless drill, but possibly they will loan someone else something someday. And sometimes the favor is returned in a different form. For instance, we’ve borrowed a ladder from a neighbor, and every time it snows, my husband takes his garage-sale bought snowblower and plows that neighbor’s sidewalk and driveway. Although I’m sure my husband would have done it anyway, it’s still an example how we each create a community when we reach out to others.

And by taking that step and knocking on a neighbor’s door, we also have a very good chance of striking up a new friendship, which is worth more than anything you can buy.

The average American household carries a credit card balance of between $7,500 and $8,000, according to a Frontline report called “Secret History of the Credit Card.” The PBS report also states that bout 35 million Americans pay only the required minimum of their balance each month, which means it will take years to pay off their debt and that “they’ll end up paying far more than the cost of the items or services they bought.” The show goes on to report that many of these people could possibly even pay off their balance in full each month, but they don’t for inexplicable reasons.

And according to a 2001 report on the NewsHour Extra by Jim Lehrer, by the end of 2000, Americans owed 7.2 trillion dollars in household debt. “American families owed 100 percent of the money they earned from work.”

Getting out from under that debt may seem insurmountable, but it is crucial to achieving financial freedom. The way to do this is to first take a month and log all your expenditures – from that morning coffee to that monthly mortgage. Organize your expenditures in categories such as eating out, groceries, gas for car, entertainment, and so on.

After doing this, most people are astonished by how much of their income they are just piddling away with nothing to show for it. Then, carefully look at where you can cut. Depending on your motivation, you could shave tens or hundreds of dollars off that monthly amount. Whatever that savings amounts to, you need to allocate it to pay off your credit card with the highest interest rate. Keep making chunks of payments until it is paid off and then move onto your next debt until all you have left are low-interest rate student loans, a car loan and/or your mortgage.

Once you pay off all your other debt, then take that amount you spent on debt reduction each month and stick it in a money market account that will be readily accessible in case of emergency. When you have enough money in that account to pay for, say, six months of your living expenses, then it is time to start thinking about whether you’d like to start paying off your other debts: student and car loans and finally, a mortgage.

Some people are satisfied to stop right there, maybe keeping a mortgage for the tax write off and using the money they previously spent on debt for vacations or other treats. But there are some people who keep right on going until they are completely debt free and then invest their money and live on the returns. This is true financial freedom. It is tough, but it has been done. Those people who have accomplished this ultimate financial freedom, such as Vicki Robin and Joe Dominguez, the authors of “Your Money or Your Life,” claim to have found a richness to life that no money can buy.