Christmas teaches important lessons about living within your means and ways to reduce debt.
From the motley look of you, it’s obvious that you lost the Christmas spending battle and are now licking your financial wounds!
The Christmas campaign is over you odious overdrafters!
How many of you credit cretins and debit dummies could keep your cards in your wallet??
All right people, this is Major Frugal and I am back to make financial warriors out of you!
Did you stick to your budget? Did you have excessive spending? Now is the time for the post-op review. We will look at ways to reduce debt and cut costs so we can deal with those credit card bills.
Doing it Differently Next Time
Now that you have been through your first phase of training on Cash Flow, I expect you to go through a “Lessons Learned” exercise to evaluate your effectiveness in financial combat. While it is true that no plan survives its first contact with the enemy it is important to find out what you did right and what you did wrong!
From our first lesson, you know that the only ways to reduce debt and save money involve reducing expenditures below income. You violated this rule if you spent more than you had budgeted for Christmas.
YOU NEVER WANT TO CARRY DEBT ON A CREDIT CARD OR OVERDRAFT YOUR BANK ACCOUNT AS THIS IS VERY EXPENSIVE DEBT!!
This means you need to reduce your debt by having positive cash flow to pay down your debts. The easiest way is to reduce your expenditures.
It Starts With Food
We will start in the kitchen. Within the realm of feeding yourself there are many opportunities to save money. You can start with the weekly food flyers. Make a selection of your choices for the week to come. For many people it helps to lay out a menu of the week’s meals. If you have children who have multiple activities through the week and you have two parents working, then this becomes even more critical.
Notice that I haven’t mentioned eating out; because the quickest way to save money for any household is to cook for yourself. Don’t know how to cook? Those skills are easily learned via the Internet, library cookbooks or your own cookbooks, or guidance from someone who does know how to cook. Laying out a menu on the weekend will help you get yourself organized and also prioritize what you need to buy in order to fulfill the menu. Cooking as many meals as possible and freezing them and/or refrigerating them to have them ready to go when needed reduces the stress at meal times, reduces the likelihood of expensive impulse take-out spending, and can also improve the quality of the food for you and your family.
From the flyers it’s usually possible to select two or three stores that are offering specials that fit in with your menu or your diet or around which you can build a meal plan. Make a list of what you need to buy and refrain from impulse buying in the store.
Coupons can save a lot of money and there are many websites that offer coupons and manufacturing rebates. Many stores now will offer price matching if you bring in the competition’s flyers. This can save you quite a bit of money without having to drive from store to store for the flyer specials.
In Canada, the Loblaw’s group of stores offers points called PC Plus points through the President’s Choice banking system. In a nut shell, you can get a PC Plus card for points but you can get even more points by using a President’s Choice banking credit card or debit card. We’ll cover banking at another time but suffice to say that their system offers you points for shopping at the stores that offer PC points. Conveniently, once on the system, they offer you additional points that will match up with what you have been buying in prior weeks. The points accumulate and can be used to pay for future purchases at the same stores.
If you’re a member of a bulk store, like COSTCO, then you have to be wary about controlling your spending. The amount of food that you buy in bulk may be fine for some items but most of the time you end up with vast quantities of food that doesn’t get used, will collect dust on your shelves or is given away. The prices are not necessarily lower on an individual basis.
If you are a student you may want to consider being part of a buyers group with a group of friends. By buying in bulk as a group there may be attractive discounts for large numbers of items. Family packs, or even bulk store purchases, may offer cost efficiencies to save money when split amongst a group of people.
One of the things to be aware of when you’re shopping in a grocery store is that a larger package size may not offer the best deal. It’s always good to have a calculator with you to check prices on a per unit level. Read the labels on the shelves and look at the unit per price label to see which product size offers the best price.
One of the really great deals offered in most stores are foodstuffs that have reached their best before date and have been marked down. Many items of food are marked down because they lose their physical attractiveness or have reached their peak flavor by the best before date. Marked down meats can be taken home and cooked right away or can be frozen. Vegetables that are going into a soup or casserole do not have to look perfect. If the food is not in too bad a shape it may offer the best deal and can save a tremendous amount of money. Do you get the idea?
Buying food on the internet may or may not be a great deal. Websites such as WAGJAG sound like they may be offering a fantastic deal on some items but careful perusal of the unit price usually reveals that a better deal can be purchased at a local store for a similar item on sale. Check your local prices before you commit to driving across the country to pick up a “great deal.”
One last thing – buying and cooking your own food means having control. It takes time to cook your own meals and organization is key. By cooking your own meals you can control portion size, fat content and salt content.
By being organized and by seeking out the values that are offered to you by the various stores you can save a tremendous amount of money within the confines of feeding yourself.