Black Belt Shopper
(featured column)

Changing Habits, One at a Time
by Larry Wiener

In my January column, I told you about a fitness trainer who needed some training in the financial area.  We've kept in contact and he is making a great deal of progress.  He's refinanced his debt to allow both a lower interest rate and a lower payment.  He is swearing off credit cards.  For the first time in years, he is making all his bills without going into deficit.

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Is he doing everything a black shopper can do?  No.  He hasn't done much to attack the cost of food, driving, and many of the other expenses that most of us incur.  But the excellent progress he has made points up an important principle for the out of control - it is better to really change one shopping or financial habit at a time than to become frustrated trying to change everything at once.
 
Where to Start?

You've taken the first step.  You've identified the need to work on your financial life.  You have committed yourself to a solution. Your next move needs to be finding one action you can take to improve your situation.

For many of us, that first step may involve spending less on food.  If you do fast food for lunch, try brown bagging it most of the time and occasionally going to a real restaurant for lunch.  You'd be amazed how much you can save, especially if both husband and wife take that step.

Other food-related steps can include buying fewer prepared items, learning to coupon, experimenting with food sources other than the supermarket, or even growing your own.  (And you can find more ways to save on groceries at our tip site GrocerySavingTips.com)
 
Then What?

After you've taken that first step, the next step is to consider what you're going to do with the money you save.  Otherwise, your saved money may go into a black hole.  For my trainer friend, he used the money he saved by refinancing his debt to have it available so he wouldn't have to go into deficit with credit cards toward the end of his pay period.  You may want to pay off your credit cards, finally be able to contribute to your 401(k), or save for a vacation.

Once you begin reaping the freedom that being more intentional about your money brings, you will most likely take more steps to create cash.  My friend was so excited about not going into deficit that he decided he would trade in his expensive muscle car for a less expensive truck which both is cheaper to maintain and is more practical for his needs.
 
What Else?

You've taken those first few steps.  You've seen the benefit of having more cash and have vowed to make good use of the money you save.  What are some possible next steps for you to take?  Here are a few:
 
* Check out the dollar stores in your area.  Many of them have gone from emphasizing trinkets to offering higher quality consumable items that most of us use every day (pasta, cleaning items, etc...)

* Fill your car with gas before it is nearing empty when you are going past one of the lower priced stations in your area (important now that gas prices are going up).

* Review your insurance to see if you are overpaying.

* Review your long distance, Internet, and cell phone plans to see if you can do better.

* Check out closeout stores.  Stores like Big Lots can give you great bargains on everyday items while stores like TJ Maxx can be really helpful for fashion items.

* If you are big on dining out and movies, consider going to lunch rather than dinner and going to bargain matinees and twilight shows. This can really add up for a family.

* Look at sources such as half.com and ebay for books, music, and movies you want to buy for yourself or for gifts.  There are some real bargains there. Consider using your library rather than buying when appropriate.

* If you buy lots of ink cartridges for your printer, consider buying refilled cartridges rather than buying new ones from the manufacturer.  That can save you mightily.

* Find out if your utility offers energy audits or alternate billing plans.  With the cost of oil going up, this can save you big over time.
 
And Finally...
 
Once you taken the steps to get a better cash flow, you're then set to use those savings intentionally toward financial freedom.  For most of us, the steps toward that freedom include getting out of debt, establishing a cash reserve, and becoming an investor.  While you're at it, you'll probably have some extra for wants.

Moving from out of control toward a position of financial freedom can be a daunting task with many, many steps.  Trying to do everything at once can be so discouraging that you end up charging up another splurge.   

Training yourself to take the first step and allowing the rest to follow in due time may make the process much more doable.

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Copyright © 2004 by Larry Wiener

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