Innovative ways to save money!

By Mike DuBose

Consumers are plagued by soaring prices, empty shelves, and hard-to-find items since the Covid Pandemic interrupted supply chains. Families, with limited income, experienced the fiercest struggles, often depleting savings, borrowing money, or tapping retirement funds. Many are penny-pinching, even dangerously reducing vital medicines and food to survive. Others cannot afford high-interest, hard-to-find homes and cars! The Pew Foundation recently reported 72% of  respondents were stressed about food and consumer prices. Yet, according to several studies, USA Today reports an average American adult spends $18,000 annually on “non-essential” items. Does Starbucks ring a bell?

March 2024 Consumer-Price-Index-Inflation-Rate is 3%. Surprisingly, inflation formulas exclude volatile items that impact consumers the most—fuel and food. Companies are skillfully raising prices while providing customers with less. Potato chip bags filled with air to appear loaded are only half-full when opened. Our cat litter’s price nearly doubled and weights were cleverly reduced from 10-to-7 pounds. Yet, identical-looking packaging fooled me! Walmart, Home Depot, and Coca-Cola CEOs report that while prices were falling towards the Federal Reserve’s inflation 2% target, “many high-costs remain stuck.” Let’s begin with broad saving suggestions:

Play “saving” like fun games: While it’s unrealistic to employ in all circumstances, strive to “reasonably” avoid  paying retail prices. However, you don’t want saving money to become an unhappy obsession. It’s thrilling to find good deals but remember “you get what you pay for!” There are three distinct categories of savers: (1) savvy, (2) frugal, and (3) cheap (which robs you of having fun and can result in inferior purchases).

Be patient: Successful financial stewards avoid falling into impulsive high-price-spending but seek sales and discounts. Webster defines “Patience is the ability to wait for something without frustration. It’s a useful skill and a virtue of one’s personality.”

Develop budgets: These roadmaps will productively keep you financially on track and reveal dangers. Gallup Polls determined66% of families don’t have budgets to guide them and 47% of businesses operate in the dark without financial plans. As Yogi Berra counsels, “If you don’t know where you are going, you might not get there!”

Many families and companies base their expenses and revenue with “unrealistic hopes and dreams!” Households don’t include “unexpected” job losses, disabilities, accidents, deaths, and major expenses. Businesses without cash reserves often are unprepared for disasters like pandemics, competitors attracting lucrative customers, and key employees exiting, which devastate cash flow and earnings. Many fail to “Hope for the best and plan for the worst!”

It’s important to create accurate pictures of your current finances in planning future needs. Carefully examine checkbooks, bank/credit statements, and debit/cash receipts for three months to create your budget. You will be surprised to find that 25-35% of expenses could be miscellaneous! It’s those small expenditures that add to the bigger picture. Some outlays vary with utilities higher in the summer/winter. Adopt the budget philosophy of calculating conservative income combined with liberal, miscellaneous, and unexpected expenses.

Once budgets are developed, crosscheck upcoming “actual” monthly expenses against your “projections” to factually track spending and pinpoint hemorrhaging areas. If developed properly, your strengths and opportunities for improved savings will emerge. In future articles, we will include Microsoft Excel Spreadsheet links to help develop your family or business budget. I’ll add broad categories, like utilities, and formulas so if you make changes, it automatically adds or subtracts.

Live within your means: If you don’t have the funds in your budget, delay or avoid buying items. The Bible and Aristotle warn about worshipping money and undisciplined overspending. I travelled down these harmful paths, but fortunately realized the dangers after years of running on senseless money-making-treadmills. Haven’t we all fallen prey lusting for something we can do without and impatiently wanting it…NOW? Luring, easy-to-obtain credit cards with sky-high interest rates, 10-year car loans, and second-third home mortgages make it possible to buy about anything we desire, especially if trying to keep up with others’ lifestyles. Financial advisor Dave Ramsey noted, “Many families recklessly spend money they don’t have, on things they don’t need, to impress people they don’t like!”

Strive to be debt-free: This takes carefully-designed plans and often third-party professional help to rid yourself of expensive, monthly payments with high-interest rates! Secure 15-year versus 30-year home mortgages to save bundles on interest or frequently pay extra towards your existing loan’s principal. If credit cards hold balances, pay promptly or initially eliminate smaller debts to experience success versus attacking “big ones.” Shop interest rates and “carefully” transfer debt balances to other credit cards with enticing offers. Stockbrokers may counsel against being debt-free and  suggest placing all your assets in the market. What a relief to know you aren’t obligated to anyone, can live comfortably, and withstand most financial storms!

Delay social security: Economists warn that in nine years, the system will take in less contributions than it sends to retirees. People are living longer and more are drawing benefits. Fewer employees are paying into the system which is rapidly draining reserves. Politicians, who focus solely on their re-election careers, refuse to support creating a stable, secure system for fear of political backlash. Studies verify monthly benefits will be reduced by 23% beginning in 2034. Significant measures being suggested by the Social Security Trustees exclude existing retirees and those 50+ years old.

Your monthly check increases 8% every year you wait to draw your retirement—almost doubling at age 70. If you haven’t applied and have adequate savings or plan to work longer, strive for the highest check you can secure!

The Bottom Line: Saving money is a valuable habit that reaps significant rewards. Our next articles will share practical saving strategies, while enjoying life to the fullest.

Visit Mike’s nonprofit website www.mikedubose.com to register for his monthly publications and free access to his books, including “The Art of Building Great Businesses.” The website contains 100+ published articles he has written on business, travel, and personal topics, in addition to health research with Surb Guram, MD and David Hurst, DVM.