Are you slave to the dollar?

Frugality is Power! Here are 8 Tips to help you take control.

Last Friday I wrote about ‘living within your means’ as a way of fostering a happy family. This week I feel compelled to write more about this important issue and provide some practical tips on how to be frugal. Don’t switch off just yet? I know, I know, you may not be short of a dollar and neither am I. But this is not just about budgeting and surviving, it’s more than that. It’s about setting an example for your family and about proving something to yourself. It’s about taking back control. Please read on and share this with people you care about.

CONFESSIONS OF A SHOPAHOLLIC

People and businesses are still hurting from this Great Recession. Some are even struggling to put food on the table. To learn how to live in this new economy, which has been described as the “worst in a generation” we must go back and remind ourselves of what caused the problem. I think Newsweek magazine put the answer simply: It was caused by “A frenzy of irresponsible borrowing.”

On a macro level I believe that corporations and governments have to accept that they created this issue by peddling a culture of greed. A message of ‘buy! Buy! buy!’ whether you can pay for it or not. Consequently, “A generation has learned the hard way the dangers of borrowing too much,” explains economist Chris Farrell in his book The New Frugality.

On a micro level I think that it’s time for us individually to take back control. Its time for the little guy to say ‘no’ to the advertising agencies that con us into buying stuff we don’t need. And time to say ‘no’ to the stock market that measures a corporation’s performance by the number of high-margin widgets it can sell to unsuspecting consumers. And time to say ‘no’ to growth in GDP as a measure of a community’s wealth.

Whilst the mainstream media is telling us a lot about the problem, there is little information provided on how to be frugal.  In this journal I want to share with you how my family is taking back control of our spending patterns. We have been doing so since August 2007, when the GFC was first felt.

Controlling spending is the best way to beat the system that has let us all down. If you know how to live frugally and keep your greed in check you will live life on your own terms, without regard for money. This is the ultimate freedom of choice in a democracy.

There is power in knowing that you can control your spending habits. There is power in knowing that you can live a great happy life without regard for money. There is power in knowing that you can grow your vegetables if you have to. There is power in knowing that you can walk or cycle to work instead of driving a car and burning fuel. There is power in knowing that true happiness comes from having close family and friends and not from buying material belongings that eventually find their way into the attic collecting dust.

Here my Tips (Please share these with people you care about):

First, when you go through good financial times, save some money! Put aside as much as you can. Start a ‘rainy day’ fund. Having this will take the pressure off. And you won’t feel like you are carrying a financial burden around with you all day. This advice also applies to businesses large or small. (Please make sure that you deposit your savings with  bank that is government guaranteed.)

Second, before buying an expensive item, consider whether it is really necessary. Sleep on it. Don’t be impulsive. If you think that this purchase is going to make you happy, its time to step back and examine what is going on in your life. Buying things to make you happy is often a sign of insecurity and having ‘no life’.

Third, if you decide you really need to buy something, search for items that are on sale or look for good used items. In my business, I do not buy the latest software. When people were buying 2007 version of Microsoft Office, I went and bought the 2003 version. It did the same job and we saved thousands of dollars in software licensing fees.

Fourth, don’t buy new cars. A business associate of mine recently bought an S class Mercedes Benz for a tenth of the price of the new model. He said something to me that was thought-provoking. He said, “the new model is not worth paying the extra $100,000 for.” And he is right. We pay so much more for the privilege of being an early adopter. Why? It makes no sense. We would have gladly bought the car 5 years ago for a bargain price, why the difference now?

Fifth, don’t buy clothes from popular name brands. There are many local designers who sell clothes for a fraction of the price. When it comes to children’s clothing, rather than buy the latest styles at expensive stores, why not use hand-me-downs?

Sixth, cook at home. It costs less to buy ingredients and cook meals than it does to eat out, period! My wife and I go to the farmers market every week and get the kids to help us select produce. On Sundays, we sit and talk as we prepare the meal. We bond and the children learn so much. We also teach the kids to prepare sandwiches for school.

Seventh, Grow your own vegetable garden. More and more smart people are doing so. It is not only relaxing and healthier for you but also saves you lots of money. By growing six of the most common vegetables, an average family can save up to $3,500 per year!

Eighth, here are a few more that I learned from my parents: a/ Limit use of cell phone, it’s costly and bad for your brain. b/ limit use of a dryer, hang washing in the sun. c/ Limit use of air conditioners and heaters to extreme weather only.

If you are in debt, please email me and I can send you information on how to get out of debt. And don’t worry, I am not gonna try and sell you something! My email: sam@sammakhoul.com