Money Saving Advice from a Compulsive Spender, Part 2

This is a continuation of my three-part series, “Money Saving Advice from a Compulsive Spender.”  Check out Part 1 if you missed it!

Part Two:  Shopping Skills for the Financial Idiot

In the first part of this little educational series, I talked about credit (or the lack thereof.)  Now I’m going to share some shopping skills I’ve picked up and that I’ve been refining the past couple of months.  My own personal goal has been to try to save money, which was only going to happen if I cut out some frivolous spending and shopped a little more wisely.  So that’s what I’ve been trying to do.

Ask Yourself: Do I REALLY need this?

  • If you ask yourself this question and answer honestly, I think you’ll be surprised how often the answer is “no.” A couple of months ago, I started to buy myself and iPod Touch.  I had a little extra money, and I thought, “Why not?”  Well, the better question was, “Why?”  I have an iPod Classic which I have had for several years, but here’s the thing: it works fine, it holds more data than the Touch, and in all honesty, I don’t use it all that much.  So why did I need it?  I didn’t.  Believe it or not, I didn’t buy it.  Yay me!
  • On a purchase like that, don’t buy it impulsively.  Wait a day or two.  I mean, it’s not like they’re going to quit making iPods or anything.  Think about why you want it.  Will you use it?  Try to be honest with yourself.  Lots of times you’ll talk yourself out of the purchase, and into a big savings.
  • Everyone likes nice things, but what are you willing to sacrifice to have them?  New shoes and fancy cars and all the latest techno gadgets are great, but are they worth damaging your credit, or taking away from a college savings?  Every time I look at something I’d like to have, I just tell myself, “I can have this neat little thing at The Grandparent’s house, or I can not have it in my own home in a couple of years.”  Let’s just say I don’t have to put a whole lot of thought into that choice.
  • In other words, give yourself a very specific goal.  Maybe you don’t want your kids to have to borrow money to go to college–that’s a great one.  Maybe you want to be able to retire sometime before your 147th birthday.  Maybe you want to buy (or build!) your forever home.  Whatever it is, decide on it and keep it in your mind.  For example, I have a stack of brochures from Lowe’s that have things like kitchen cabinets and bathtubs in them.  I keep them on the book-case beside my bed, along with the sketches of the house we’d like to build.  When I start getting bummed because we didn’t go to on a lake vacation this year, I just get those out and look through them and imagine my house.  It may sound silly, but it helps.

Shop Smart: Yes, I use coupons!

Even if you do cut out compulsive spending, there are still a LOT of things that you have to buy.  You may not be able to avoid buying them, but at least you can try to save as much as you can.

  • SHOP ALONE! This may sound funny, but I’m dead serious.  You might have heard people say not to take your kids along to the grocery store, but I’ll take it one step further: leave the spouse at home, too.  My husband is terrible about picking up random things in the grocery store and dropping them in the buggy.  He can turn even the most carefully planned shopping trip into so much smoking rubble.  Try to shop alone at all costs.  Make a list and stick to it.  Go through your cabinets and pantry thoroughly to avoid missing something that you’ll have to make another stop for later in the week.  Even worse–you’ll have to let your spouse run in after work to grab the forgotten item…..along with fifty bucks worth of “other stuff.”  I’m not great at planning meals, but try to keep staples on hand so you can come up with something on the fly.  You know what everyone likes.  Look at your calendar to see if there’s a day you know you’ll be gone all day and won’t feel like cooking, and plan accordingly.  It takes some getting used to, but if I can do it, so can you.
  • Well, here it goes—-coupons, coupons, coupons!  I don’t do the extreme couponing thing, because it doesn’t seem practical to me, but I do use coupons every single week.  If in doubt, clip it out!  To step it up a notch, look through the sale papers every Sunday, and match coupons to sales.  Hold on to the coupons for a while before you use them (unless there’s a great deal!) because sometimes an item will go on sale a couple of weeks after the coupon came out.  You can check out The Coupon Mom, a great site that lists sales by store and state, and tells you if there are coupons to go along with it.  Still, check out the sale papers yourself, and keep your coupons organized, because I have found some that she missed.
  • Like I said, I don’t do extreme couponing.  I’ve never bought 100 of anything.  Still, if I get a really good coupon, sometimes I will stock up.  You can actually buy pre-clipped coupons from sites like The Coupon Clippers, which is the one I use, for a few cents.  This may sound strange, but some people buy four or five Sunday papers, which is much more costly than just ordering the coupons.  I never spend more than three or four dollars a week, or around 15 dollars a month.  I got five Wisk coupons that were $2.00 off.  I love Wisk, and we use a ton of laundry detergent around here.  Wisk went on sale at Dollar General for $4.00.  (It’s $4.97 at Wal-Mart.)  So I bought five.  I saved a lot more than I spend on the coupons, and that’s just on the Wisk. 
  • Having said that, be wise with your coupon shopping.  Sometimes, even on-sale items are still cheaper at Wal-Mart.  Some people don’t like Wal-Mart, but my purse dictates my shopping.  Know the prices of the things you buy most often.  You may be able to use your coupons at Wal-Mart and get it cheaper, even if it is on sale somewhere else.  The only exception is Kroger, which doubles coupons that are 50 cents or less. 
  • That’s another point–know your store’s coupon policy.  For example, Kroger does that doubling thing, but only paper coupons.  They do NOT double the electronic coupons you can load to your Kroger shopping card at kroger.com.  The electronic coupon comes off first, so then you can’t use your paper coupon, and therefore can’t double it. 
  • Don’t buy a bunch of stuff you aren’t going to use.  Health and beauty stuff usually has the best deals, but still, if you don’t use it, you wasted the money, even if it was a big sale.  That’s where I don’t really get the extreme couponing thing.  One woman bought all of these cat treats because she got them for like fifty cents or something, but guess what?  She didn’t have a cat.  Enough said.
  • Put off back-to-school shopping until after school starts.  Your kids should have some warm-weather clothes from the end of school the previous year, and it will still be warm when school starts.  Let them start in those.  Then in a few weeks, there will be more selection and sometimes much better prices on jeans and tennis shoes and the like.  You don’t have to buy your kids a whole new wardrobe every year at school time!
  • Though this doesn’t have anything to do with coupons or shopping, it is a pet peeve of mine.  Have clothes and shoes that are designated for school or going out, and clothes and shoes that are play clothes. Why oh why would you pay thirty or forty dollars (or more!) for a pair of tennis shoes, and then let your kids go outside and wade in the creek and tramp through the mud in them?  DUH! At least they can maybe get a little more wear out of them.

If you’ve managed to stick with me this far, then stay tuned for the final installment, Save it, then keep your filthy paws out of it!

(I promise once I’ve finished this, I’ll go back to my usual standard of pointless ranting and smart-assery.)

 

 

 

 

 

 

 

Money Saving Advice from a Compulsive Spender, Part 1

I couldn’t really call myself a compulsive shopper–that phrase just doesn’t quite seem to fit me.  I don’t have a hundred pairs of shoes or thirty pairs of jeans (in fact, I have three.)  Clothes in general don’t interest me, and I don’t really spend all of my money on one particular item.

And yet…..

I (and certain other members of my household) have spent far too long carelessly throwing money around on stupid crap.  I have always had a sort of “I don’t care” attitude.  If one of us wanted something, and we had the money, we bought it.  We used credit cards recklessly, and jumped into vehicle payments that could have been avoided. 

Now, however, times are a-changin’.  I never really had financial goals, and to me financial planning consisted of deciding which type of laptop computer I wanted to buy when we got our income tax refund.  Now I have a goal, and it’s a serious one.  I want to build a house. 

For those who don’t know, we live in the house that belongs to The Grandparents.  We came here because I had to start taking care of my sister full-time, and the house we owned was a teeny little thing which was completely inappropriate for a wheelchair.  So we came here nine years ago.  In that nine years, I have changed the way I think about a lot of things.  It’s no fun living in someone else’s house, no matter how self-sufficient you are.  You can pay the utilities, care for the home, and care for the people in it, but ultimately, it will never, ever be your house. Anyway, owing to a set of various circumstances, we are about to close on a piece of property in a neighboring county closer to hubby’s job.  That piece of land has become an obsession, and friends and neighbors, believe me when I say it:  I am a woman on a mission.

Here’s the bad news–my previously loosey-goosey attitude toward finances has left us with virtually no savings and only fair credit.  In short, we can get most loans, but we don’t get very favorable rates, and over the course of a thirty year mortgage, that can mean literally tens of thousands of dollars.  So it’s time to turn over a new leaf, and for the past couple of months, I’ve been doing just that.  It’s been hard, but it’s happening slowly.  I’ve given myself a two-and-a-half to three-year time line.  In the mean time, I’ve decided to share some basic pointers that I’ve put into practice.  Now, normally this type of post would be for someone else’s blog, but I’m taking this seriously, and I’ve had a fair amount of success.  Also, I figure if a financial nitwit like me can save money, anyone can.  So follow along–there will be a test (not really.)

Point One: Know Your Credit

  • Don’t think about your credit much? Start now.  That magic number, aka your credit score, makes or breaks you.  It’s as simple as that.  Everyone is entitled to one free credit report from all three credit bureaus once a year.  Check out www.annualcreditreport.com and look at yours from Transunion, Experian, and Equifax.  There is an option for disputing errors on each report, and you should check all of the information carefully and correct any mistakes, even small ones.  You’d be surprised how many errors there can be on your report.
  • Although this sort of qualifies as a “duh” statement, try to pay your bills on time, every time.  Medical bills that get turned over to collection agencies pop on your credit report and hurt your score.  Note: If you accept a lower “settlement” agreement on a medical bill, that is listed on your report as derogatory account, because you settled for a lesser amount than you actually owed. It’s better to make payment arrangements with the hospital or doctor’s office than to just let it go.
  • Do not let people check your credit over and over.  Every time someone makes an inquiry, it damages your score.  If you are shopping for a mortgage or car loan, you can make as many checks as you need in a thirty-day period and it will only count as one; however, if you apply for that Kohl’s card to receive a discount at the register, that is an inquiry and it hits your score. Don’t do it.
  • Pay your student loans!  This is voice of experience speaking here!  It’s tempting to defer them or get a forbearance, but once again, that hurts your score.  Now that everyone is getting a little wiser, most people are advising against even getting government loans for college at all.  Good advice for our kids, but too bad for us, I guess.  Furthermore, student loans are exempt from bankruptcy.  In other words, you will have it until you pay it off.  Period.
  • Do NOT fall for any scams or offers that tell you your credit score can be raised by some massive amount in a short period of time.  The only way to raise your score is to correct errors and keep your accounts current, and both of things are free.

Point Two: If your credit already sucks

  • Again, try to start keeping your bills current.  However, if you are in completely over your head, consider filing bankruptcy.  Now, before you automatically say “No!” let me just say you should at least check into it.  If you are so far over your head with debt, especially credit card debt, there may be no other way to get out.  If you think you can pay it off, then by all means do, but let’s keep it honest here.  If you could manage money well enough to repay all of that debt, you probably wouldn’t have it in the first place!  You may think bankruptcy ruins your credit, but here’s a news flash for you–it’s already ruined if you don’t pay your bills, and every month you are behind, it just keeps getting worse.  It’s not for everyone, but like I said, don’t assume it isn’t for you until you at least do a little research and review your own situation.
  • If you’re trying to rebuild your credit, the bad news is that the only way to build credit is to have credit, and that’s how most of us messed up the first time around.  Still, it’s a necessary evil.  Shop around for a credit card with no annual fee, preferably unsecured if you can mange it.  I got one for me and one for hubby.  We each use it once a month, for a tank of gas, say, or one trip to the store, then pay the balance when the statement comes out.  That’s it.  I don’t carry it with me except for the day I plan to use it, then I put back in my jewelry box and leave it there.  Only get a card, though, if you are serious about improving your credit and can keep from using it all the time.  Don’t kid yourself into thinking you can use it for an emergency or when your checkbook is a little low, because you’ll just end up using it all the time, and you’ll end up right where you started.  Also, try not to carry a balance, but it also doesn’t do you any good if you don’t ever use it.  You need to show that you can use it responsibly and pay your payments on time.
  • I’ll say it again–pay your student loans!  They can’t be discharged in a bankruptcy, and the only solution is to pay them. 
  • Pay your utilities on time.  Although they don’t show up on your credit report that I know of, if you get some kind of a judgement against you from the phone company or something, that can show up on there, and also, you can use your utilities as credit references when you apply for a mortgage loan.
  • Don’t get in over your head with your car payment.  Let me tell you, I could write a book about this one.  I’m still battling this, as I have two years left on my van, which of course is worth WAAAAAYYYYYY less than what I owe on it.  Repeat after me:  negative equity is not your friend.  I have a double whammy on this one, because I ALSO have hubby’s truck payment.  With that not so great credit, we didn’t get a very good rate, so the payments are too high.  Here’s the kicker–neither of us really needed a new vehicle.  We could both still be easily driving the vehicles we traded in (for a loss, no less) on these, and we wouldn’t have this mind-numbing dollar amount to pay out in car payments each month.  By far, this is the largest financial thorn I have in my side right now.  I will NEVER be in this shape again.  I advise you not to get into it in the first place.  You’ll be sorry.

Okay, this post is getting painfully long, so I’ll conclude part one.  My biggest hope is that someone else can learn from my (many) mistakes.  Remember, credit is a lot easier to maintain than to fix once it’s destroyed!

Stay tuned for Part 2:  Shopping Skills for the Financial Idiot.

 

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