Money Listens

The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. — Mad Magazine

Maybe you haven’t been tempted to buy an elephant, but I bet there are a lot of other things you’ve bought on impulse. In Financial Peace Dave Ramsey sets out five ways we can develop power over our purchases. There are plenty of salespeople who will tell our money what to buy, if we let them. The five steps will keep us from buying elephants.

1. Wait before making a purchase.
2. Consider your motive for buying.
3. Never buy anything you do not understand.
4. Consider the opportunity cost of your money.
5. Seek counsel before buying.

Number one can save a lot of money. Just wait before making a purchase. How long? Dave says at least overnight. I’m going to say a week, but a month is even better. Say you’re online ready to buy, or in line with the item already in your shopping cart. Don’t buy it. Instead, write it down somewhere, perhaps where you keep your spending plan/budget. Title it “Things I’m Considering Buying.” I keep my list in my Palm.

After waiting, if you really need/want it and it works with the budget, go ahead and get it. With cash, of course. If you’re like most people, after the impulse wears off you decide you don’t really need it. After a few weeks, you’ll find you’ve acquired a tidy wish list of things you can live without. (Or maybe it’ll only take a few hours for you shopaholics.) Now you have a great list of suggestions for gifts. Post the list on your fridge before your Birthday.

Don’t go overboard on this, I’m not talking about groceries or those things you’ve already considered and planned to buy. I’m talking about those impulse purchases that seem like such a good idea at the time. Things like going to Academy for a fishing license and coming out with an Avet Pro 30 Wide tournament class reel. Or getting your sister’s favorite perfume for her birthday and coming out of the mall with Ralph Lauren 400 thread-count sheets. From now on, don’t buy anything without waiting first.

GROCERIES TAKING A BIGGER BITE was the headline in today’s newspaper. Not in the Metro or the Business section but right on the front page “above the flap.” “If it seems like you’ve been paying more at the supermarket, it’s because you have. And you may have to get used to it.” San Antonio Express-News Thursday, April 3, 2008. A gallon of milk has gone up 15% and eggs a whopping 24%. The culprit is the rising cost of energy. Everybody from the farmers to the truckers is paying more and that cost is getting passed along to you and me. At the same time, we’re trying to lower our food bill so we can pay off debt and save. Next to shelter and transportation, food is the biggest item in our budget. Can it be done? Yes, but there’s no one-size-fits-all way. I think you have to try lots of different ways that all add up to spending less. You’ve heard these all before, but now you and your money need to listen and select some to put into practice. Many of them are better for you physically as well as fiscally. These are in no particular order, just how they popped into my head.

1. Plan meals, including breakfast, lunch, and dinner.
   The shopping list I use has the meals on one side and grocery list on the other. I can plan out meals and have them when I shop , side by side with my list, so if something is on sale I can see how that fits with my plan.
2. Have something other than name-brand boxed cereals for breakfast. Oatmeal and homemade granola are far less expensive.
3. Fewer packaged snacks. Go for popcorn that you pop yourself on the stove or in the microwave (Not those microwave-ready bags with oil). Pretzels are often the least expensive snack.
4. Take cold hard cash money to the grocery store. And a calculator.
5. Fruit. It seems expensive, but get lots of what’s on sale. Even a full price melon has several servings and is much less than other snacks. A few expensive berries on oatmeal in the morning is much less than boxed cereal.
6. When boneless chicken breasts are on sale grill or bake about 24 (don’t overcook them!), then slice for sandwiches. Cheaper and tastier than deli meats. Freezes well and makes great paninis.
7. Beans and Rice.
8. Go to a store that has bulk bins and buy oats, rice, cous cous, and beans. Get all your spices, too. It’s usually much cheaper, but compare prices to make sure.
9. Learn to cook. Or at least to make meals.
10. Go shopping on a day when your family can help you “prep” that evening. Cut up fruit and veggies for lunches and the next few meals ahead of time.
11. Go to Mrs. Baird’s or another bakery outlet for bread. The savings are tremendous. Switch off with a friend or neighbor.
12. Have one meal a week that is the same. Pick something easy and inexpensive that everyone likes. Change about every 6-12 months. We had baked potatoes and broccoli every Thursday for about 2 years. Now we have Hamburger Vegetable soup every Thursday (yep, we’re having it tonight).
13. Enjoy the time you spend preparing meals. The variety of food we have is a great gift to us and can be one of the great joys in your life. Take pleasure in planning and doing as well as eating.

Please send me a comment with your favorite tip for saving money at the grocery store. Just click below on the word comments.

Mail came today. Here’s a flyer from Michaels. I can save 50% off any one item. I can do better than that. I’ll save 100% by not buying anything. Here’s a fun catalog from the Container Store. It’s a Spring Organization Sale. How did they know I was desperate to get my stuff organized? I have a better idea, I’m going to sell some of my stuff so I won’t have to buy expensive storage items to put the stuff in. Double savings! Here are two catalogs with my kids’ names on them– Anthropologie and Limited Too. These go right into the recycling box. Last one, Lands’ End. I know better than to even open this one. On the cover a sticker says “Buy more, save more.” No way, buy less, save everything. Why do catalogs always say “Save, Save, Save” when the real message is “Spend, Spend, Spend?” Catalogs are smart, and they can tell our money where to go. Don’t let your money listen to catalogs. Spending less, or not spending at all is how saving begins. There’s no way to save if the money is spent instead.

Do you get all these catalogs, too? Today, I spent about 10 minutes signing up for a service called Catalog Choice. It’s free, and allows you to decide what catalogs you get in your mailbox. According to the website, the mission of Catalog Choice is to reduce the number of repeat and unsolicited catalog mailings. I dug all the catalogs from my recycle box. Then I signed up for a free account. Next, I selected the “Find Catalog” section and searched for catalogs. I typed in the name and customer number from the back of the catalog and clicked the “Decline” button. Catalog Choice will deliver my requests to the various companies. That’s it. If you want to try it yourself, here’s the website: http://www.catalogchoice.org/signup

I’ll keep you posted on how it works for me.

It’s April 1st, the start of a new month. Now is the best time to begin to get your financial life in order. Say to yourself, “I’m not spending any money today.” And keep repeating it. See how many days you can go without spending money. If you haven’t made out your spending plan for the first paycheck of the month, do it today. Plan out where every dollar is going to be spent. Transfer some to your savings account first. Grab some twenties from the ATM and put cash in envelopes for food, clothing, eating out, blow money and whatever other categories you want. Then hide the envelopes in your sock drawer. Hide the credit and debit cards in there, too. When the kids beg you to go through the drive-thru, honestly say, “I don’t have any money.”

Do you have one of those little spiral bound memo pads? Or how about an index card? Don’t go out and buy some, use the back of an envelope. Each time you are tempted to spend money and resist the urge, write down your savings. Add it up each day. Pat yourself on the back. Do it again tomorrow. Get in the habit of not spending money. But don’t stop there. At the end of the week or month, take the cash from the envelopes and deposit it into your savings account.

If you must go out to a lunch meeting, have a bowl of soup or something inexpensive. Don’t think about what you’re not doing or not able to have. Think about what you are doing. You are building a savings account for emergencies, you are making sure your kids have a college fund, you are going to have a retirement fund. Look back at your memo book or the back of the envelope where you wrote down where you were tempted to spend money. Do you want to trade your future for any of those things?

My daughter came home from school with a list of non-fiction books. She had to choose one for a paper. Guess which one she picked? (Remember that the apple doesn’t fall far from the tree.) Affluenza: The All-Consuming Epidemic by John De Graaf (Author), David Wann (Author), Thomas H. Naylor (Author).

Affluenza is a clever combination of the words affluence and flu. The authors’ definition is “a painful, contagious, socially transmitted condition of overload, debt, anxiety, and waste resulting from the dogged pursuit of more.” The symptoms of affluenza include communities where people don’t know each other; houses with televisions for every member of the family; and people who, on the surface, have it all but feel depressed and empty. You don’t need medical training to diagnose affluenza, and the statistics are staggering: The average American spends more than $21,000 a year on consumer goods. To emphasize their point, the authors note that each week Americans spend six hours shopping and only 40 minutes playing with their children. And the six hours shopping sounds way too low to me. Of course, I live less than an hour from a 300 store outlet mall.

What really worries me about affluenza is the contagious part. Keeping up with the Jones’ has replaced baseball as American’s pastime. We can recite car models, plasma screen pixels, and designer labels as we once talked about batting averages and home runs. We can’t be content with a Toyota. It has to be the “luxury” vehicle with the LS or the GS attached. It isn’t about transportation, is it? It’s about status. We have no idea what we actually “need.” It’s all about “want.” We’re nauseous when the credit card bill arrives, or when we see how little we have in our retirement fund. But the pain is self-inflicted. We choose to spend money we don’t have. We choose to buy a new car when we could put that money into our IRA. We choose to ignore how much we spend eating out. The good news is there’s a cure for affluenza. And it’s simple. Buy only what you need. That means what is urgent and necessary. And buy the least expensive minimum that will get the job done. Save the rest of your money. Do these two things and you’ll feel better in the morning.