Financial Tough Love

I was talking to a friend and they were telling me that finances are looking a bit tight. What to do? Max out the credit cards, borrow from the IRA? These are not good choices. Good financial choices in difficult times are those which slash expenses. How to do that?

Here are a few choices:

1. Slashing expenses means reducing monthly expenditures. If your position is "I can't live without THAT" then it's probable that you aren't willing to make some of the choices required by these demanding times. However, getting started is the most important thing. Financial freedom requires some discipline, but has its rewards.
2. At BLMH, we have a TV antenna system in our buildings. So choice number 1: Cut the cable or satellite TV. If you really can afford some sort of cable or satellite TV, check on bundling phone and TV. However, you may find this doesn't save all that much. If it doesn't, then "cut the cable!" 
3. Need that fancy smartphone? How many people really have need of news, weather, and the ability to tweet 24/7 from their phone? Besides, many of those expensive smartphones are really luxury goods. If you are in a financial place where you need to cut expenses, a "smartphone" is a good place to start. Step down to a basic cellphone. 
4. If you have a land phone line, eliminate the cellphone, or vice-versa. Choose either land or cellphone, but not both. 
5. Need internet? Combine AT+T with DSL, or cable with internet. But ditch those expensive channels!
6. If you are considering a combination plan, remember that the goal is to reduce your monthly expenses. So what good is a plan by Comcast, AT+T or whomever, that increases your monthly bills? The quick answer: not good at all!
7. Stop dining at restaurants and eliminate expensive entertainment. 
8. Postpone that vacation until a time that you can afford one. In the mean time, put a few dollars each month in a "cookie jar" for next year's vacation. Any vacation you take that is paid on credit is one you possibly cannot afford. 
9. Reduce your discretionary expenses, such as double lattes, entertainment, meals out, etc. 
10. Switch from specialty grocery stores to basic.
11. Cook more meals at home.
12. If you have a set-back thermometer for your HVAC, then use it. Otherwise, do it manually and when leaving turn the thermostat up to 78F in summer and down to 65F in winter. Dress lighter in summer so you can use less air conditioning, and wear a sweater in winter. 
13. Clean your refrigerator, replace your furnace filters, clean your clothes dryer filter and if you haven't had your dryer vent cleaned in a year or more, call management and schedule that! Also, have your dryer vent checked to be certain it is unobstructed.  
14. Combine automobile errands to save gas. Drive less and take more walks! The Wheaton Park District has a free indoor walking track which is air conditioned!
15. Look at your credit card and bank fees. Compare and if possible, move to a lower cost credit card. For banks, see if you can eliminate those monthly fees. 
16. Look at your insurance. Can you combine home and auto? Some companies offer discounts if you do.
17. Pay all bills promptly. Late fees and credit card interest is money wasted. 
18. Create a monthly spending plan!
19. Get serious about your financial future, and begin living within your means!

Comments, Corrections, Omissions, References

Note 1.  Good finances begins with making a budget and then sticking to it. Begin by collecting your bills for a month and separating the essential from the discretionary. Essentials include electricity, natural gas, groceries, insurance, homeowner's fees, etc.  Then collect credit card bills and add up your balances. If you can't afford to pay off your credit card debt each month, then you should not be using a credit card. The bottom line on credit cards: If you buy on credit each month and don't pay off the balance each month, then you are taking out a loan each month and admitting you are living beyond your means. You cannot expect that things will "turn out OK" for anyone in that situation with the exception of the bank!