Financial Journey
(featured column)

Time for Black Belt Frugality Again

by Karen Kuebler 

It is hard to believe that we are almost one third of the way through 2011 already! My life experiences continue to vacillate between the ups and the downs. I imagine that many of our readers have their own challenges given the state of the economy over the last few years and our individual encounters with life and the hurdles that we find in our personal paths.  More...

Commend yourself for taking proactive steps to move forward! Taking the time to read and educate yourself through motivational articles on the internet, including those from BetterBudgeting.com, proves that you are continuing to take a hands-on approach to choose practical ways to overcome obstacles you are facing.

During this process of overcoming my current financial challenges, I have been reminded of important concepts that I have practiced in previous years. When you are thrown into a position that feels beyond your control, it is time to take charge and get your state of affairs in order to find your way back and manage your life.

If you are familiar with Pareto’s Principle, it might bring comfort to know that we do have control over the majority of our decisions. The Pareto Principle is based on studies going back to the early 1900’s. It is often referred to as the 80/20 rule. It originated with studies done by an Italian economist Vilfredo Pareto, who observed in 1906 that 80% of the land in Italy was owned by 20% of the population. He further developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas.

Other scientists and economists followed with studies that proved the Pareto Principle to be valid in most situations. In examining this principle further, I once heard that with all of the clothes in our closet, we tend to wear 20% of the clothing 80% of the time. I thought about that for awhile and realized that was true for me! Being a “closet economist,” I studied this in various areas of my life – both professional and individual. I discovered that this rule was a personal reality for me.

What does this mean for us and our personal circumstances? The value is that it reminds us to focus on the 20% that really matters on a day to day basis. Of the things we do during a day, approximately 20% are going to result in our most productive outcomes. We often are caught up in crisis management or doing the easier items on our daily prioritized “to do” list.  Once you realize the fire drills and the easier tasks are sapping your time, remind yourself of the 20% you need to focus on. If something in the schedule has to slip, if something isn't going to get done, make sure it's not part of that 20%. This will probably require a major paradigm shift when it comes to crisis management.

The first response for most of us is to get into the crisis immediately and to solve it. Sometimes this does become part of the 20% of the most important tasks needed to be tended to that day. However, there are other solutions to consider. If a similar crisis comes up multiple times, then it is worth the time spent identifying root causes and fixing them. I have found that a group of individuals with diverse backgrounds can brainstorm and develop constructive action plans to resolve the problem. It will take some time up front, but the results are generally quite efficient and will save many hours in the long run. Another solution is to “delegate!” So simple, but often forgotten because we think we are the only and/or best person to solve the predicament!

With the reminder of Pareto’s Principle, after picking at my brain longer than necessary, I started pulling from my 20% bag of tricks to help steer me along the financial path I want to be on once again. Here are some things I have started doing again that had been resting somewhere in the closet over the last couple of years:

Reading – I have always been an advocate of reading everything I could get my hands on related to finances and personal financial management. I realized I have been lagging in this area of my life since Bob passed away. I felt like I didn’t have anybody to set goals with and needed to do my own paradigm shift, realizing I still need to set goals for me. I love to go to the library and read the variety of financial related magazines. I have found two that are filled with great ideas and decided to get a subscription for both, after researching the internet and finding the best deal. The one I like for personal financial management is Smart Money. However, there are many other magazines I love to read at the library. When I find articles that are ‘keepers’ I make a copy and keep it in a binder at home. I’ve created quite a library of my own from various sources.

DIY (aka Do It Yourself) – Bob had so many talents including the ability to fix anything that needed repair around the house. He could do plumbing, electronics, electrical, mechanical and anything else I have forgotten. He had a natural ability as an engineer to cover just about anything that needed to be fixed. If we had to hire somebody, it was rare and only occurred after he had worked on something for a long time and was unsuccessful. I have the ability to handle finances, which he greatly appreciated because he didn’t have the knack or interest to work on financial planning. It made for a great partnership as a couple. I have since become quite the repair person over the last couple of years. It doesn’t come easily for me, but I have saved tons of money by fixing things myself. I have always loved to learn, and at this point in my life I have been learning so many things that I hadn’t prepared for in advance. I have had several plumbing opportunities, including the entire irrigation system outdoors. I have fondly nicknamed it the ‘irritation system’ but I am no longer intimidated by anything that breaks because I have had a chance to fix it all! 

I recently did my first electrical repair which was initially very intimidating. We had a blizzard that brought down trees that in turn brought down my outdoor lamp post. It is necessary for each of us to have a lamp post because there are no outdoor lights where we live which is in a rural location outside of town. It took a couple of attempts before I was happy with the results, but I am so pleased with the outcome! I have found several resources to learn how to fix things myself. The internet is so great that I can’t imagine how I ever lived without it. Home Depot has a site accessible to anyone, and they show pictorial methods for all types of repairs. I have found searching the net for repairs also provides many resources and answers. The individuals at several hardware stores have been more than happy to demonstrate what I need to do for particular repairs. I took a class at our local community college entitled “Home Repairs and Maintenance for Women.” The second magazine I have subscribed to is Family Handyman . It is my favorite magazine to read cover to cover and I do think they should consider a newer and more enlightened title for this publication! It is a type of a personal financial management magazine when I count the money I have saved through DIY.

Remember Dollar Stores – I used to frequent these often to find gifts for grandchildren. Again, I let this habit slip. There are certain Dollar Stores that charge higher prices and are not necessarily a bargain. But there are stores that advertise “nothing over a dollar.” I happen to have one very close to where I live. I had been going into a large warehouse store with discounted prices located next door and never visited the dollar store. In the last couple of months I have been going in there for necessities which are much better priced than the large discount store!

Use up Food on Hand – Another plan that I let fall by the wayside. I have been using food from my freezer, refrigerator and pantry – but have succumbed to buying something at the store or healthy fast food restaurants because “I deserve it!” I have shifted my thinking back to emptying my pantry and refrigerator. I have made great progress, but still have tons of meals I can fix with the food I have right here under my roof! Considering the cost of food prices on the rise, I am saving a lot of money. I am still using my local co-op for fresh fruits and veggies and can’t beat the price. The amount of produce provided lasts me two weeks at $15 per visit.

Don’t Throw Food Down the Drain – I hate tossing food away because I picture it as dollar bills going down the garbage disposal one at a time. I have put my creative hat on and have made delicious meals from leftovers. When I have a lot of produce from the co-op I think ahead and freeze everything I can immediately. Depending on what the food item is, I either rinse or cook and then freeze on a cookie sheet. I then put it in sealed bags. This works great for all of the berries I am getting. It works for many of the veggies as well. It’s so fun to get so many things that I wouldn’t buy if I were at the store. I am getting a great variety of produce that is extremely healthy and also provides me with a variety of options down the road once they are prepared and frozen appropriately.

Guard My Use of Gasoline – This is another commodity that has been rising consistently and prices have become outrageous. Realizing we all have different circumstances and lifestyles, I can only choose the best plan for me. I have become so conscious of not taking the car out unless absolutely necessary. I am fortunate that I don’t have to commute to a job, as well as living in a smaller town. I keep a list of non-urgent errands and follow the most efficient route to accomplish them. I usually do them when I need to go to something that is non-negotiable. I have been working toward an ‘end goal’ of filling the tank once a month. I am actually getting close to achieving this goal. I have made it at least 3 weeks on one fill-up. When Bob and I were in our ‘black belt frugality’ mode for several years in order to prepare for an early retirement, we found ways to deal with long commutes. Considering the price of gasoline was not nearly as high as it is now, I realize our decisions were rational since this is a commodity we can find ways to reduce our outgoing cash flow. Our commute to work was 30 miles one way. We did two things that saved lots of money toward retirement. We set up a car pool and six of us rode to work together which made for lots of interesting conversations! I was engaged to Bob and my boss was part of the car pool, so that was kind of fun as I look back on the experience. We also took a commuter bus when the car pool didn’t work out for one reason or another. Not our favorite form of transportation, but we learned sacrifices made a big difference on our budget’s bottom line.

In conclusion, if you boil down the ideas I have put forward, it doesn’t add up to very many topics. I’ve discussed the following principles: (1) Reading, studying, and gaining knowledge of personal financial management and other areas that embraces, such as developing the skills to DIY; (2) Food and grocery management – you can save a fortune by purchasing wisely, not wasting or throwing away any food you have, looking at the food you already have in your home and using it in creative ways to make new and different meals; (3) Utilizing the dollar store, particularly for household products and personal maintenance and hygiene items. It is also a great place to find gifts and party favors at a low price; (4) Guarding the use of gasoline – when you make up your mind to do this, it can be fun to find new and creative ways to spend time with family and friends. Your bottom line savings will multiply as you find inexpensive things you can do in your own home, as well as not driving vehicles that will chew up dollar bills in a hurry.

These areas of spending your money probably approximate somewhere close to 20% of your concentration in your spending plan. Yet focusing on this 20% will begin to bring you prosperity and abundance. This has been my experience, and I have realized I need to follow these tactics that have worked for me in the past.

You will gain momentum as you discover you are saving more money. This personal energy will drive you to look at the next areas on which you want to focus your attention. Those areas on which we concentrate with sincerity, enthusiasm, and centered-mindedness will lead us to a new level of efficiency. When we achieve that higher level of efficiency, it will require less focus and attention because we are developing effective habits. Once we develop a habit then it is time to move forward and continue to develop more effective habits. 

It takes work, concentration, and focus – yet the outcomes are so worth it!!!!

I wish you successful outcomes as you select the first habit you want to focus your attention. Remember that we are all in a similar boat and we have many others on this site to communicate with when we need an extra dose of motivation!!

*  *  *

Copyright © 2011 by Karen Kuebler. All rights reserved.