Living in a Recession

We are living in a recession. People everywhere are losing their jobs, their homes, and sometimes even their sanity. How are we supposed to make ends meet when there is very little income coming in? It is possible! You just have to learn to budget, save, and smart wisely.

What you need to understand is that in the spoiled-rotten society we live in, we often view luxury items as necessities. The first step is to take inventory and realize what is needed and what is wanted. For example, when I lost my job and my husbands hours were cut, we went from an annual income of $38,000 to a mere $15,000. We instantly went into panic mode! But soon, we realized how many little luxuries we could eliminate or cut down on. Here are some tips to get you started:

1. Cell Phones - Unless your job requires a cell phone or you make a lot of long distance calls, disconnect it or downgrade your plan. With the cell phone explosion, landlines are much less expensive then they were 5 years ago. Get one with no extras (just the single line, no call waiting, no voicemail, no caller id). We only pay $13 per month. If you make a lot of long distance calls, consider switching to another plan or try a flat-rate carrier. Cricket and Pocket are two companies that provide great service and coverage for a monthly flat fee. The minutes are unlimited and their plans are month-to-month, so you don't have to sign a contract. Pocket says they are able to flash any phone, so you won't need to buy a new one.

2. Eating Out - Eating out is more expensive than you realize. Buy and cook your own food. If you don't know how to cook, get a cookbook from the library (library books are free!) or ask your mom how.

3. Cable/Satellite - This is one of those things that as a society we thing is a necessity, but it is really a luxury! In our area, we only get 3 channels without cable, however, over the years we have collected quite a few movies. We find DVD's on sale at Hasting's for as little as $1.99.

4. Houses - Live in a huge house by yourself? Sell and buy a smaller one. Live in luxury apartment with all the amenities? Most apartment complexes will allow you to transfer to another community that has lower rent as long as they manage that property. We still live in a good neighborhood in a quiet complex, we just don't have much closet space or a garbage disposal.

5. Transportation - Take transit, if you can, but in our small city of 20,000 we don't have a transit system and currently only have 1 taxi that not only charges outrageous rates, but is only available a few hours a day. So a car in our city is necessary. However, we don't lease and we do not owe the bank for any car payments. We used our tax refund last year to buy a 1998 sedan from a private owner. So we don't have to worry about repossession or a car payment. Since we own the car outright, we are not required to have full coverage on our insurance. It's an older car and our city streets don't have a lot of accidents, so we settle for liability only.

6. Clothes - Don't go to the mall. Their prices are expensive because their rent is higher. Go to a thrift or discount store. Just check for stains. Missing buttons or broken zippers? No problem, just get a travel sewing kit from a dollar store and it's like brand new! You can also find appliances and jewelry at thrift stores. A good rule of thumb is don't buy it if they don't let you try it. Make sure it works and check for frayed wires. If necessary, bring someone who is good at fixing things. They can usually tell right away if that television or dishwasher is going to last or not.

7. Laundry - If you have a washer and dryer in your home, cut down on your dryer use. The dryer uses a lot of electricity. Hang dry your clothes outside. If you live in an apartment that does not have washer/dryer connections, wash your clothes in the bathtub, sink, or large bucket. You will probably have to hang dry them indoors since a lot of property managers do not allow you to hang your clothes outside. I hang mine in the living room and let the ceiling fan dry them. Hang dry them in an airy space, don't leave them hanging in the bathroom or it will start to smell! Note: Many people who have tried hand washing complain about the "crunchiness" of air-dried clothes. A simple solution is to rub the fabric between your hands briskly for a few seconds and your clothes are soft again!

8. Shop Smart - Meat is expensive. We have cut down to only eating meat a few times a week. If I happen to make Hamburger Helper, instead of using 1 lb. of beef, I only use 1/2 lb. and then add in a can of corn. Pay attention to how much an item costs per ounce, not the price they list. Sometimes you think you're getting a good deal, but you're really paying more. Also, watch the cashier as they scan the items. Sometimes the prices don't scan properly. Another great tip is combine your coupons with sale items, but don't just get something just because you have a coupon. Most of the time generic tastes just as good. In my house we are big fans of Digiorno Pizza. I will not get a generic because we get heartburn from other brands. However, I only buy it when I have a coupon and they are on sale. Digiorno is great pizza, but $6 a box is quite expensive. If I get ahold of a coupon and wait for a sale, I can get them for $3 a box.

9. Barter - Trade babysitting for a home-cooked meal or trade clothes or appliances with friends. I once traded a purse for a 24-pack of toilet paper. Another friend is a manager at a convenience store and she hates mopping. I told her I would mop for her once a week in exchange for free oil changes.

10. Entertain Indoors - Going out for a movie or concert is fun, but it can be costly. Entertain yourselves at home instead. My family has become good board-game players! If you must go see a movie in a theatre, eat dinner beforehand. The costs of the snack bar can be twice as much as the movie tickets!

11. Walk - If you need to go somewhere, walk if you can. If it is a bit far or if you have health problems, drive in a straight line - don't drive north to the store, then south to the bank, then north again to go home. You're just wasting gas.

12. Gifts - In our family, we rarely buy gifts for one another. For our anniversary, my husband cleaned the entire apartment for me! For his birthday, I made him his favorite dinner and took over his chore of taking out the trash for the week.

13. Loans & Credit Cards - Call your lenders and explain your situation. Most of ours have worked with us because we contacted them before there was an issue. I have a credit card, however, I rarely use it and make sure that whatever I charge I can pay off at the end of the month. We wouldn't have a credit card except for the sole purpose of improving our credit score so we can get a good rate on a home loan.

14. Books, Movies, & Music - Go to the library. All libraries have books and most have movies and music you can check out for free.

15. Internet - Either downgrade, shop around for a better deal, or go to the internet at the library. You might consider bundling if you have a landline and/or cable.

16. Garden - Grow your own fruits, vegetables, and herbs. I have heard there are "boxes" that you can buy that measures the water for you, you just plant and wait for them to produce. I plan on trying the boxes this spring.

16. Assistance - If you have cut down costs all you can and still have trouble making ends meet, you can get food, clothes, and prescription assistance from St. Vincent de Paul or the Salvation Army. There is also SNAP (Supplemental Nutrition Assistance Program, still known to many as "food stamps") and WIC (Women, Infants, and Children) for pregnant women or parents of children aged 5 and under. I recently discovered that there is a program in Texas to get a discount on our home phone bill and in the summer months we can get a percentage off of our electric bill. (Wish I had known about those discounts last summer!)

A few people have made the remark that we must be very bored without the latest electronics and the trendiest clothes, but really we're not! It took a few months of adjusting to our new lifestyle, but I have to say that now we are under much less stress, and are much happier.

Sources:

Cricket Wireless: Home, http://www.mycricket.com/
St. Vincent de Paul: FAQs, http://www.svdpusa.org/AboutUs/FAQs/tabid/67/ItemId/3/language/en-US/Default.aspx

Salvation Army: Home, http://www.salvationarmyusa.org/usn/www_usn_2.nsf

FNS Supplemental Nutrition Assistance Program (SNAP): Home, http://www.fns.usda.gov/fsp/

WIC: Home, http://www.fns.usda.gov/wic/

Pocket: Plans, www.pocket.com/index.php/plans