Saving Money on Groceries

I watched a video on yahoo about a couple who cut their grocery bill in half.  I’ve noticed that I find its harder and harder to stay within my monthly budget for food.  I have a savings card which helps when the stores have sales.  I try to be thrifty as I peruse the aisles, but it still adds up.  This past shopping experience I was happy to have coupons for being a faithful customer.  I was even able to get a few items for free!  I admit that I could do better.  Meal planning is one of the easiest ways to spend less.  I try to stock up on items that could make a simple meal if I’m out of most everything else.

Good tips

Are you spending beyond your means?  With the shaky economy and increasing prices, I think most people would say yes.  Yahoo Finance has a good article that lists 5 signs that you are living beyond your means.  Some signs are we are saving less than 5%.  In 2005, the U.S. Bureau of Economic Analysis said the average rate of personal saving was -0.5%.  According to history, this is the worst rate since the Great Depression in 1933 when it was a rate of -0.7%.  In 3 years we have still been unable to raise the average to 1%.  Sign number 3 and 5 talk about credit balances and bills rising.  As a nation we have lost the stigma of buying something on credit.  We need to get back to a cash only mind set.  If we can’t afford to buy something with cash, then we shouldn’t buy it.  For a lot of us who spend 130% of our income, we don’t have the cash to pay for car, house, utilities, and necessities.  That’s when we need to take a hard look at our finances and figure out what we really need and what we can do to cinch the belt on our spending.  Another good article to read from Yahoo is 5 Stragies for Surviving Tough Times.  It makes the argument that even if you aren’t feeling the budget pinch right now, you should start trying to get out of debt.  I know its a lot easier said than done, but its worth a try to have peace of mind about our financial future.

Waiting on a Rebate Check

If you are eagerly awaiting a rebate check, make sure you don’t owe money in back taxes, child support or student loans.  The Treasury department is intercepting stimulus checks to pay off these debts.  Read the full article here.

Oil Woes

A new record of $4.04 per gallon of gasoline hit today.  Global demand of crude oil is pushing prices and futures higher and higher.  Commenting on China’s demand of fuel resulting from May’s earthquake, an article quoted said this: ” ‘A 5.5 percent increase in one of the largest consumers of oil in the world is a lot of barrels of oil,’ said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.”  A report showed that Saudi Arabia had increased input by 500,000 barrels a day this quarter which was more than previously thought.  Ritterbusch is quoted saying a couple hundred thousand barrels just isn’t enough. 

Oil prices seemed to have been figured out of Bernake’s economic equations.  He’s quoted in an article on Bloomberg.com: “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so,” Bernanke said in a speech at a Boston Fed conference. “The Federal Open Market Committee will strongly resist an erosion of longer-term inflation expectations.”

U.S Treasury Secretary Paulson admits that record oil prices are a problem in a Forbes.com article.  He believes the $600 stimulus payments have lessened the blow on our economy.   But what about the long term solution? 

Links

I realized that most of my links weren’t working.  I’ve updated them now and they should all be working. 

 

Saving Money

I find it hard to save money especially right now with prices of everyday items rising higher and higher.  I often get an attitude of self-pity.  My husband works hard and earns money for the family.  Don’t we deserve to indulge in going out to eat or buying that gadget he really wants?  I find that instead of giving in once in a while I tend to over indulge in these “rewards” without really saving anything.  An article I read today gives 12 tips on how to start saving in order to create good habits.  We may be in an economic slowdown, but it may be the motivator to push you and me into saving.  We can’t afford to eat out 2 or 3 times a week.  If we put limits on that now, when we have extra money we won’t be as tempted to eat out all the time- a bonus for the purse and waist line.  We have to retrain ourselves and our children that the real reward of working hard isn’t always what we can buy, but being debt free or having a nest egg for our future.  There are many important lessons in teaching ourselves to save.  The most important is patience.  Good things come to those who wait.   

Educating our children

As parents it’s our responsibility to educate our children.  We start when they are babies by teaching them how to say “mama” and “dada”.  As they grow older we teach them how to tie their shoes and ride a bike.  We teach them to read and write and the list goes on and on and shouldn’t  stop.  On our long journey, we also should be teaching our children about personal finances.  Here is a good how-to-guide to get you started. 

Global Slowdown

Many countries like Iceland, Africa, and U.S are feeling the effects of inflation or economic slowdown.  Countries like Japan and Germany seem to be keeping the global economy afloat, but even they have their concerns. 

“The negative effect of the U.S. slowdown is going to hit after a time lag,” said Seiji Shiraishi, chief economist at HSBC Securities in Tokyo. “Both households and the corporate sector could be in pretty bad shape, at least through summer.”

Prices of everyday goods rose at more than twice the pace of wages in March. Japanese workers are likely to see summer bonuses increase by the smallest amount since 2002, the Nikkei newspaper reported this week.

“Real income is declining” and households may tighten their purse strings, said HSBC’s Shiraishi. “Inflation in prices of necessities has a negative impact on psychology.”

We feel that here at home more than ever with the record gas prices rising each day and advancing food prices.  We already can see a decline in consumers eating out.  I even saw a video about restaurants trying to find ways to pinch a penny on menu items.  Our financial blunders here in the U.S are causing part of this global strain with our weak dollar.  Is what the Fed doing going to help or hurt?

The Federal Reserve’s direct loans of cash to commercial banks climbed to the highest level on record in the past week as money-losing lenders increasingly turn to the central bank for funds.

I think our dependance upon the central bank is a fault we need to remedy and soon!

 

Record Gas Prices

I saw today that in an article that oil is over $126 a barrel for the first time.  For the area I live in, it means that prices will jump 30 cents in one day like they did a couple of days ago with the previous record of $120.  How does what I pay at the pump fluctuate so much for a physical substance based on supply and demand?  There seem to be many layers which cause prices to go up.  One area is when there are tensions with other countries like Venezuela.  Another area is the weak dollar that makes oil more inviting to investors overseas.  Then there are the oil futures which are tied into speculation about these other factors.   Are these speculators causing the skyrocketing prices?  NYMEX says no!  The article mentions a bill by Senate to raise margin requirements for crude oil that would, in result, discourage excessive speculation.  The bill called Consumer-First Energy Act would also revoke tax breaks for big oil companies.   Of course oil companies aren’t going to like that.  

How to spend your stimulus

If you are fortunate to be one of the chosen who receive a stimulus check, you may be wondering how to spend it.  If you are like me, you have a wish list of things that you would love to spend the “extra” money on. The house could use some new decorations and I would love a new wardrobe. I don’t need to be roused to spend money, but then the reality of groceries, utilites, gas and debts sets in.  Wouldn’t it be more practical to spend the money on bills?  It would definitely be more fun to spend it at department stores. Plus, there is always Vegas.  Then I read news about Las Vegas being hit by economic troubles.  So, there goes my plan B to use my last dime to try and win big when things got really bad.  How can you or I  survive this unstable economy?  This Newsweek article has some good tips.  I especially enjoyed the last part. 

Just do what you’re supposed to in a recession: tighten the belt, pay down the bills, salt away cash and keep investing for the next upturn of the economic cycle. And don’t waste time worrying. Leave that up to the Bernankes and Paulsons. It’s what you pay them for.