How to Save Money in a Recession
Getting Out of Debt can be as Easy as Curbing Spending Habits
Oct 15, 2009
Despite how financial articles describe financial planning and ways in which people can save, at the end of the day the message to be free from financial strain and experience real financial freedom on a day to day basis can be summed up in one word; save. While most people hate hearing the word save, watching the bank balance grow will make up for the effort.
Saving Money in a Recession
With the economic recession still fresh in the economy and in everyone's pockets, and with the news of companies laying off employees in the thousands, people have had no choice but to buckle down and re-evaluate the state of their financial health to discover new ways of making more money. As consumerism takes a back seat and entrepreneurs are born, the new financial habits with regards to spending to managing finances should be nurtured.
As Kelli B. Grant reiterates in an article named "6 Old-School Saving Tricks Are Back," for Smart Money published on the 14th of September 2009, "Consumers have grown more frugal: Excessive spending is out and saving is in...spending trends often cycle in and out, but what’s interesting about this go-round at frugality is how it’s playing out. Old savings strategies are seeing a resurgence...some of the most popular tactics ...date back to prior recessions."
So what happens when it is impossible to save? Take a lesson from Jennifer Mulrean in an article for MSN Money Resources, entitled, "7 Radical Ways to Save Money," where she states, "It's getting harder to blame savings shortfalls on your measly pay stub. In fact, how much you save has little to do with your income...It has more to do with whether you want to save and are willing to adjust to boost your saving."
Saving Tips
The first step in saving is to establish current financial health, and it is in looking at how much income is earned, and how much money is spent on basic necessities or luxuries that a precise plan can be established on how much money can be saved and in which areas it is being spent excessively. Combat consumerism, and learn to distinguish personal wants from real basic needs.
Ways to save:
- Buy in bulk: Buying from a warehouse where household items are sold in bulk can do wonders for the savings bank; and even though it will look expensive on the onset, buget wisely on much needed items and it will be cheaper in the long run.
- Use cash: Instead of creating more debt by swiping the credit card, be wise with credits cards. Try to save up and buy purchases with cash, always remember that the aim for spending on any item is to avoid pile ups of debt.
- Look for cheaper alternatives: Saving money can be as simple as looking for alternatives to regular activities or products. For example, instead of frequenting the usual restuarant, have a picnic; instead of frequenting the movies, rent a video; the savings may not be astronomical, but they are a step in the right direction.
- Clean out the garage: Cleaning out any unused possessions can result in a profit rather than becoming a chore. Have a sale to get rid of all those unused items, and add some money to a bank balance.
- Shop around: Compare prices. It pays to visit more than one store in purchasing a product; remember that a higher price will not necessarily mean that the product is a quality product.
- Watch the budget: Make sure to continously review the monthly budget. This will go a long way in not only helping to curb spending, but will also give valuable feedback on financial health.
- Buying used is not a felony: Some major purchases, such as cars or furniture can be bought used. Despite the stigma attached to buying already used goods, reupholstered used furniture or a used car can be a saving if taken care of properly.
Save and Combat Consumerism
If saving money still seems challenging with the present circumstances, take a leaf out of Karen Blumenthals book. In an article she wrote for The Wall Street Journal on the 23rd of September 2009 entitled, "Saving Again, Heres a Way to Do It Right," she likens a savings plan to the drawers of the essential clothing items of a bedroom; such as the all important underwear drawer to an emergency fund drawer; it is a necessity.
At the end of the day, the contents of this article boil down to one sentence; Spend less than what is earned, manage income and be frugal in purchasing goods; this will allow the financial freedom to live a better life.
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