The Debt Dance

1.Decide what you really, really want out of life. Your dreams may look something like this:
–Good health.
–No more credit card debt.
–A bigger/beautiful house.
–Travel.
–College fund.
–Retire in five years.
–Start a business.
–Buy a home in the mountains.
–Quit my J.O.B. and work from home.

What do dreams have to do with saving money?
A lot! To be successful at saving money we need a strong reason–a compelling “why”–to make changes in our lives. Saving money is the power to channel our money where we want it in order to create the life of our dreams.

2. Devise a spending blueprint to get what you really, really want.
I call this a tiered plan as you have three levels of items:

–A. The Gottas: mortgage, insurance, utilities, a categorized emergency fund, debt payments (minimums), medical.

–B. The Dreams: extra debt payment, money toward selling your current house, a deposit in your travel fund. Note: by making these dream or goal categories a priority over other spending you will create what you want. Paying for your dreams first makes your hopes and desires come to life.

–C. What you can control: this is paid for by whatever is left from your first two tiers and includes food, dining out, entertainment, clothes, gifts, etc.

Making a plan for what you really, really want can help you make choices that will change your life.

3. Track where your dollars are going.
Find the easiest way for you to do this. We use our debit card for everything so that I can go online every day and check on how our spending is going–making adjustments along the way.
Some people prefer to spread sheet the data, or keep a little notebook.
Simply examine other systems in your life that work and duplicate this style for your tracking.
If it’s hard and stressful you won’t do it. Create an easy, functional system for yourself.

4. Cut up your Credit Cards.
Our highest credit card interest rate was 29%. If we charged $500, and paid the minimum or small payments, we would end up, three years later, paying more than $270 in interest.
And have absolutely nothing to show for it.
Most of us owe more than $500 so start multiplying. This interest expense could have helped pay for something that we really, really wanted.

For that we can fly to Washington, D.C. and peek through the International Spy Museum,
or
We can fly to the San Diego Zoo and walk along the Tiger’s River,
or,
We can fly to Los Angeles and have a chuckle at the Laugh Factory.

So–should the credit cards have that money or should I?

Cutting up our credit cards was the best money saving action we did.

5. We changed grocery stores.
We used to shop at the nice store with the flowers, the Sushi bar, the music, the large bakery…and we still go there for items we can’t find anywhere else.
But now we shop at a deep discount store (Aldi’s).
We “pioneer shop,” concentrating on buying the basics and not too much processed foods. We buy produce at a farmer’s market for great fun, quality, and value. We buy bulk items once about every three months at a warehouse store.
We shop with a list and try to stick to it.
We plan.
We buy specials when it makes sense.
We do not shop with coupons (which were usually for items that made us fat and we didn’t really need, nor did we have storage for all the stuff…)
We stay out of the store as much as possible.
Several nights a month we practice “cook what we have” instead of running to the store for a few items–which always turns into lots of items. (There’s nothing wrong with pot stickers and pancakes is there?)
WE HAVE CUT OUR GROCERY BILL IN HALF.

6. We plan ahead and freeze many meals at once. If, for example, I buy hamburger, ground turkey, and sausage, I cook these together, and can make 8 – 10 meals, or the basics of meals, all in one cooking session.
(In this example I might make a big batch of chili, take out two containers of chili–about 2 cups ea.–to make enchiladas, and chili mac.

I make a meatloaf and meatballs–3 meals worth–I freeze three containers of the cooked ground meat mixture for rice pilaf, tamale pie, and spaghetti. That’s 9 to 10 meals.) I can do this with chicken as well.
This is highly successful for us because it makes easy to fix meals readily available, helping us avoid eating out.

THIS HAS SAVED US AT LEAST $250/MONTH.

7. “If I had eight hours to chop down a tree, I’d spend six sharpening my axe.” Abraham Lincoln.
We got smarter.
We’ve read a lot on how to save money.
We have paid for information to help us make more money (e.g. having a yard sale.)
We take our money management very seriously, devoting time to it.

8. Giving more.
Over the last months we have given lots more than we ever have. We have given boxes and boxes of items we purchased to sell through our businesses. We put ads on Freecycle and Craig’s list offering them to non-profits.
Knowing that we have contributed to people who are doing great things has made us very rich. And, every time we donate we see that money come back to us. This is, however, merely a side benefit and not why we donate.

9. We had a true “paradigm shift” and bought a nice car for cash.
We have always been in the mindset that we had to buy cars new. We decided that wouldn’t work right now. We found a low mileage used van with all the features we wanted for $3,000. Paid. No car payments!
We bought it from a small garage that fixes up cars and sells them.
If you want to buy a used car make sure you have a trusted mechanic check it out first. It’s well worth the money spent.

10. Set up a categorized emergency fund.
One of the killers to plans to save money and get out of debt are unexpected expenses. We read Mary Hunt’s The Complete Cheapskate and implemented the “freedom fund:”
First-we looked back over the last 12 months to tally all of those unexpected, “emergency” expenses.
Second-we totaled these by category (e.g. car repairs, replacing appliances, home repair, Christmas..).
Third-we divided these 12 month totals by 12 to determine how much we should put away each month by category.
Fourth-we now have an envelope system where we place (by percentage of expense) these categorized savings. If we need money for a gift we only take money from the gift envelope-never borrowing from other expense areas.
(see How to Grab Reality by the Horns.)

This effort is one of our top priorities and has given us great peace of mind.

11. We participate actively on Freecycle and Swaptree.
Not only are we loving Mother Earth by keeping items out of landfills but we are able to get FREE STUFF! For example, we needed boxes and packing materials for the items we are selling on eBay. I noticed an offer on Craig’s List of 10 boxes with peanuts. Picked them up, they’re absolutely perfect. We have received toys, books, and even a washer/dryer!

12. Stay home. This sounds simple enough but if we are out running errands we spend peripherally–buying a burger here, a soda there, that great deal we saw at the drugstore, picking up a few lottery tickets, etc. But if we just stay home, combining errand runs with other “out and about’s” days, we can save a lot of money. By doing nothing!

13. Make your house more energy efficient.
This is all we hear these days is how to have less of a footprint. Educate yourself on what is feasible for you and your pocketbook. Take a look at these interesting products:
→Clothes Dryer Vent Seal–keeps your vent shaft closed (keeping heat/cool inside and pests out!)
→Equalizer Booster Fan–mounts easily on top of your floor or wall mounted register to boost the heated or cooled air into a room that gets poor air flow. Finally cool that room that boils in the summer!
→Smart Power Strip “allows you to plug in devices that should never turn off, and turns other devices off automatically. Goodbye passive energy leaks.”
Small changes can really add up. Explore the internet and find conservation products that suit your needs.

14. Still eat out but do it smart.
Split your entrees or just order appetizers. Go for lunch instead of dinner. Watch for restaurant coupons in your newspaper.

15. Change your IRS withholding.
We usually receive a very large income tax refund and although this is really fun to get a big, fat check we realized that we would be much better served with more money coming in every month.

16. Buy gift certificates half-off.
You can buy certificates for everything from restaurants to custom made swimsuits to car repairs on such sites as Half-Off.com.
We recently bought some certificates to give for a charity auction. We bought three deals for $30 each (two coupons at our cost of $15 with a value of $30 ea.), gave half of the certificates to the charity and kept half. We can now eat out, buying $30 worth of food for our original $15 investment. Great deal, great fun.

17. Buy the least expensive and the classic.
Stay away from fads, whether it’s in fashion, cars, or home remodeling. Take ceramic floor tiles for example. At my local hardware mega store I found neutral colored large tiles (16 x 16) for $1.25 per tile. I found a similar tile that had a rougher surface and a bit more color for $7 per tile. Five years from now which tile will still be an asset…still look great? Either one. Why pay $575 more (for a 10′ by 10′ room, for example) than you have to.

Another great example is in paint. I could pay $40 to $100 on custom colored paint for a room, or I could cruise by the clearance paints (usually paints that have been tinted incorrectly or not to the customer’s delight) and see what they have. We did this for our daughter’s room and found three gallons of paint that were very close to what we had chosen on our little designer paint chips. We purchased them for $2 ea and the room came out great.

18. Feed your soul.
One of the best ways to keep yourself from emotional spending is to have inner peace. To feel a contentment in a way that ignores the “need for stuff.” We recently went to a Crosby, Stills, Nash concert (they’re first tour in forever!) and it was such a blast. They took three encores. It was just the best. And I am very content now to go to Goodwill and buy a new purse (mine broke) for $4 instead of going to the mall (which I do love) and buy a designer purse for $285.
Feeding our soul zooms us into the essential pleasures of life (like music, good food, the love of family and friends, the incomprehensible beauty of nature, our spiritual inner adventures,) and the superficialities of “stuff” just don’t even enter the picture.

18 1/2. Get happy with the changes you need in your life.
If we’re dying under a crush of debt we must face the fact that we have probably created this and we must change our behaviors in order to create “what we really, really want.” (see: Change Can Mean Letting Go of Beloved Things.)

AS ALWAYS, HERE’S ONE OF MY FAVORITE FUNNIES:

THE CAT
A man absolutely hated his wife’s cat and decided to get rid of him one day by driving him 20 blocks from his home and leaving him at the park.

As he was getting home, the cat was walking up the driveway.

The next day he decided to drive the cat 40 blocks away. He put the beast out and headed home.

Driving back up his driveway, there was the cat!

He kept taking the cat further and further and the cat would always beat him home. At last he decided to drive a few miles away, turn right, then left, past the bridge, then right again and another right until he reached what he thought was a safe distance from his home and left the cat there.

Hours later the man calls home to his wife: “Jen, is the cat there?”

“Yes”, the wife answers, “why do you ask?”

Frustrated, the man answered, “Put that SOB on the phone, I’m lost and need directions!”

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