Financial Journey
(featured column)

Getting Tough During Tough Economic Times

by Karen Kuebler 

I know I am not alone in feeling nervous about our economy, as well as feeling the impact on our personal pocketbook and savings in recent times. The news has been extremely discouraging over the past several months with so many people losing their homes, many companies going out of business, the price of oil rising, the volatility in the stock market, and endless talk of inflation and recession. Being the fighter that I am, I refuse to let it get me down. I’m doing everything I can to fight back and stay afloat until the economy turns around.  More...

My husband and I have also had the added burden of carrying a balance on our credit card for the first time in 25 years. Due to family medical crises that occurred last year, we racked up debt on one of our credit cards after first dipping into our emergency savings and using that first. The expenses were far beyond what we could have anticipated, but we are not sorry for the sacrifices we made. However, now we are not only faced with the downturn in the economy, but also the desire to pay the credit card balance off as quickly as possible. Paying finance charges on a credit card goes against everything I have practiced as we strive to live sensibly and within our means.

I want to share some of the things we have done, or are doing, to survive the tough times. I am hoping that these ideas might help you to keep your hopes up, and find ways to work through some of your own financial and/or personal struggles. In actuality, we are the captains of our own ships, and we are the ones to decide to fight back and not let the circumstances in our environment get us down.

I say this with a lot of empathy and personal experience for people facing tough times. We have had life throw us several curve balls, and faced some difficult times and serious tragedy, in the past eight years. I’ve walked through many of these situations one day at a time, but have learned that I can still survive and life has many wonderful gifts and experiences to offer even through some of our darkest moments.

1.  Before anything else, take care of yourself first. Remaining healthy, both physically and emotionally, are absolutely critical. You won’t be able to take care of others, or attend appropriately to business, if you aren’t physically well or lack the stamina.  Eat nutritiously and exercise regularly. This will help you feel much better physically and mentally, as well as building immunity and preventing illness. Not only will you decrease medical bills, but more importantly, the energy and sense of well-being that you will receive from taking good care of yourself will help keep your energy and spirits at peak level.

2.  We celebrated New Years’ Day by getting together with a few other couples and had a potluck brunch. There were four women in the group and we spent the afternoon talking about how we needed to simplify our lives, including gift giving. We all had the desire to give gifts from the heart and we all enjoy crafting. We decided to start our own little craft group and meet once a month to get started. We had our first meeting and developed a list of several gifts we would enjoy making. We have a date set for February for our first project. We will all leave with several gifts to give, as well as enjoying social time together. We used the criteria of working with materials and items that many of us have on hand that we have acquired over many years, so our out-of-pocket expenses will be minimal.

3.  After running up our credit card balance last year to the point we could not pay it in full each month, I was rather upset. My motto is “Don’t get upset, get creative.” I called the credit card company and explained the circumstances that had led to this excessive balance. They were able to see from our records that we had been great customers, and had paid our bill in full every month for years. I asked if there was any possibility that they could offer 0% financing on the card for a few months while we worked to pay off the balance. They offered to waive the finance charges for four months, which was basically the same as 0% financing. I was extremely grateful, and we did pay off a good amount of the balance during that time. We still are left with a balance that I am planning to have paid off within five months.

4.  In order to divert our funds toward paying off the credit card, we have gone into our “black belt frugality” mode!  I have a lot of food in our freezer and pantry which should feed us well for the next several months. I am only spending on produce, milk, and other absolute necessities. I will not buy anything that isn’t on a pre-made shopping list. We do have two cats who need to eat. We went shopping for them a few days ago and I had $16 worth of coupons that I had clipped from the coupons that my friends save for me each week.

5.  For necessities I have used Walgreen and Walmart gift cards that I have acquired through doing special reward programs online. I participate in My BonusPoints Rewards and various online survey programs which can be found by searching through Google on the internet. I also receive rewards through Choice Privileges—by staying in a particular chain of motels when traveling, I receive bonus points that can be exchanged for free nights or gift cards.

6.  I track all expenses, and our expenses for January are very low. We have avoided going shopping and making do with what we have at home. We haven’t taken our car out on days when we don’t have an appointment. On days we have to use the car, we group all errands to be most efficient. I am hoping to make a tank of gas last for three weeks. I’ve almost made it. I might even work on four weeks once I’ve successfully gone three weeks!

7.  I’ve developed my gift list for 2008 birthdays and Christmas, as well as 2009 birthdays. Between the gifts I have already purchased on sale that are stored in my gift cabinet, and the crafts I will be making, I will have very minimal out-of-pocket expenses for gifts. In my effort to use up everything I have on hand, I realized I have a lot more gifts stored than I realized. Taking the time to really inventory everything we have in our house was quite an eye opener!

8.  My husband and I have been turning our heat off at night and dressing very warm. This might seem over the top to some, but we are willing to sacrifice as much as we can to get our credit card debt paid off. It does get very cold where we live, but when we are sleeping we stay very warm. I wear double socks and gloves to bed, but have usually peeled them off by morning because I’m so warm. We turn our heat on to 65 when we wake up and let the house warm up. We close doors to all unused rooms and turn the central heat off once the house has warmed up.  During the day, we wear layered clothing around the house. An electric radiant heater and a gas log fireplace in our family room use less energy than our central heating system, and warm our family room and kitchen area nicely during the day. Our gas and electric bills are still much higher than they were some years ago, but are still less than our neighbors’ and friends’ utility bills. Unfortunately, utility bills are our highest expenditure during the winter. Fortunately, during the summer they drop very low and that gives us a chance to ‘catch up’ on our spending plan.

9.  I’ve had to think and plan ahead for expenditures I know I will need to make. Each year we buy tickets to fly our grandchildren and children to visit us. It is a tradition and an expense that we are willing to make in order to have this special time with our family. I check the cost of airline tickets weekly and shop the sales. I’ve purchased tickets for May for one of these visits, and by purchasing ahead of time we saved $200. I also check sales after I’ve purchased tickets because if the price has gone down, the airlines will credit the dollars into my ticketless fund account. As a result of doing this last year, I had $60 in my ticketless fund account. The problem was that the fund was going to expire before I would get a chance to use it. I called the airline and they quickly and happily credited the amount in this fund to my credit card. At least that dropped our balance owed by $60!

10.We’ve curtailed going to the theaters to see a movie since movies are coming out on DVD within a couple of months of showing at the theaters. We subscribe to Netflix for $18 per month because one of our most enjoyable hobbies is watching movies. We view 13 to 20 movies a month at this price. Another source for inexpensive movies that we recently found is the RedBox at Walgreens. You can rent a DVD for $1.00 per night—just make sure to rent it when you know you’ll watch it and can return it the next day. If we realize we aren’t planning to take the car out the next day, we won’t rent a movie.

11.Socializing with friends during poor economic times is an extremely valuable way to raise your spirits and help your emotional state of mind. We have a great network of friends and found ways to socialize without having to spend a lot of money on dining or other forms of entertainment. When we do meals, we keep them simple and participate in a potluck style meal. We either play a game we all enjoy or watch a movie. Sometimes we simply enjoy just plain ‘old-fashion’ visiting and talking. Sometimes we’ll plan to get together after dinner—we enjoy tea or hot chocolate and either visit, play a game, or watch a movie.

12.With the stock market being so volatile, it can be a scary time for some to decide how to invest their money. The most important key to investing for anyone is the ability to sleep well at night and not be worrying over their investments. I have found a comfortable way to invest in the stock market in our retirement portfolio, that lets me sleep well at night, and not start sweating when the market is going up and down. First, I’ve selected a group of diversified mutual funds that are highly rated. There are various companies that rate funds and can be accessed through the internet, or through resources at the library. Second, I dollar cost average into each mutual fund. I invest a set amount of money twice a month into each fund. By investing this way, I know that when the market is down I’ll purchase more shares of the fund. When the market goes up, then I reap the rewards of higher prices on more shares in the fund. If a person isn’t familiar with investing, I recommend that they research and learn all they can about investments. Both the internet and the library have limitless resources available to research. If investing in the stock market feels too risky, then invest in fixed income certificates of deposit (CD’s) or U.S. Government Treasury Bills. The key is to pay yourself first, and put ‘something’ into savings on a regular basis so that you can reap the rewards of compounded interest.

I hope these ideas will help our readers to utilize their own creativity and resourcefulness to find ways to weather the tough times. Keeping an optimistic attitude during the rough times will help you succeed on your path to achieving financial security. Keep reading articles such as the ones offered on our site to provide you with motivation, ideas, and positive thinking!

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Copyright © 2008 by Karen Kuebler. All rights reserved.

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