This new economy requires some new approaches for managing our money and our lives. Here are my favorite money-saving strategies from my 2009 playbook…
1. Join the “$4-a-Gallon Savings Club.” When gas hit $4 a gallon, we all complained about it, but for the most part, we adjusted our household budgets to accommodate it and — most important — we actually started to drive less for the first time in decades. As a result, demand decreased and Mother Earth breathed a little easier.
Now that gas prices are back down, let’s not go back to our old driving habits. Instead, join the $4-a-Gallon Savings Club. Every time you fill up, calculate the difference between what you pay at the pump and what it would have cost if you had paid $4 a gallon. Then “deposit” that amount in your savings club envelope. It will encourage you to continue to go light on the gas pedal, help keep down demand for gasoline and (maybe) prices and allow you to save some money. Ever since gas prices fell below $4 a gallon, I have squirreled away more than $700 in my savings club envelope.
2. Conduct a financial fire drill. Don’t wait to be blindsided by unpleasant financial news. Spend a Sunday afternoon conducting a financial fire drill. Brainstorm various worst-case scenarios — job loss, continued declines in the stock market, loss of health-care insurance — and how you would handle each of them. For scenarios that seem the most thorny, you can decide to research solutions either online, at the library or by talking with a financial professional.
Be sure to involve your family in your discussions. I have always found that when you get things out in the open, they usually are not as scary as they seemed before — and you tend to sleep a lot better because of it.
3. Barter. Bartering is the ancient practice of swapping goods and services rather than paying for them. Check out the swapping going on at Web sites, such as Craigslist.org, or join one of the growing number of online bartering clubs. Recent online swaps include a used laptop computer traded for a cache of home-brewing supplies… a Web site designer trading her services for a week’s stay at a vacation cottage on the Gulf Coast… and two radial tires for a pair of concert tickets.
Many online bartering clubs allow you to trade goods and services for club “credits.” Then you can trade the credits — instead of specific goods or services — with club members who are offering something you want. Caution: Consult IRS Publication 525, Taxable and Nontaxable Income, to determine the tax consequences of your bartering. (Go to www.irs.gov to download the publication for free or call 800-TAX-FORM.)
4. Always put off until tomorrow what you could buy today. Here’s where procrastination pays off. Studies have shown that most of us eventually regret more than half of all the discretionary purchases we make. Wait at least one week between the time you are first tempted to buy an item and when you go back to buy it. Odds are good that you’ll never go back to buy it.
Also, make a list of things that you bought recently that you could have done without. Take a look at the list before you go shopping — it might curb your impulse buying.
5. Grow your own. It’s time to bring back victory gardens, those small vegetable gardens that helped families through the two World Wars. Even a 4’x4′ raised-bed garden in the backyard can produce lots of fresh produce in a season. A few dollars’ worth of seeds easily can quadruple your investment. If you don’t have space for a garden, consider growing a pot or two of herbs on the kitchen windowsill and patio-variety tomatoes and cucumbers in containers out on the deck.
More and more cities and towns have community gardens, where you get your own little plot for the season for a nominal fee. To find a garden near you — or to learn how to start one — go to www.communitygarden.org.
Community Supported Agriculture (CSA) programs allow you to buy shares of the harvest from local farms. CSA shares sometimes can be pricey — and veggie quantities overwhelming — so research the options and consider splitting a share with your neighbors. Many CSA farms also offer volunteer opportunities to help with the gardening. For farms near you, go to www.localharvest.org.
6. Ask and you might receive. In tough times such as these, customers gain bargaining muscle when it comes to negotiating better prices on goods and services. A study by the Consumer Reports National Research Center found that more than 90% of those who got up the nerve to ask for a discount on purchases (such as electronics, appliances, furniture and even medical expenses) reported receiving a price concession at least once — and the average saving was $50 or more.
The key is always to be friendly and polite when asking for a better price or other concession. Even if you’re unhappy with the service that you have received or the condition of the merchandise, ask nicely.
Also, go into the store knowing the price that you are willing to pay. Don’t be afraid to say “No, thanks” and look elsewhere if need be.