Thursday, March 18, 2010

Frugal Friday - It's all in the Baby Steps

Who knew Frugal Friday would be such a hit? Thanks peeps! xox And also who knew Frugal Friday would be my only posts this week on a scrapbooking blog? LOL Well, it's been that kind of week my friends. I have been cleaning, cleaning, CLEANING the scrapbooking room so I can get in there and create some art. Camp Croppin' is coming up fast and I want to be prepared. It's going to be a FAB time! So now that you know why I am so negligent in the blogging world we can get on with things.

Today's Frugal Friday is all about Baby Steps. Being frugal, striving to be debt-free and eventually stopping the stress caused by money doesn't happen over night. You can't wish for it, it doesn't just appear, a money fairy doesn't drop it on your head in your sleep. It takes days, months, years to achieve your financial freedom. But mark my words, you will achieve it. So take that first Baby Step:

Gather up every bill in your house. All of them. Even the ones you have hidden in your glove box, the bottom of your bag and tucked away at the back of the bread box. Now sit down with your husband/wife/girlfriend/boyfriend/life partner/roommate...or just sit down with yourself. Whoever is affected by this. I can hear the collective gasps happening all around the world. "But Kate, then they will SEE the bills!" Yes, they will. It's time. It's time to air the dirty laundry my friends. But there will be no judgement here. This is your first Baby Step. Don't fight has to be done. You may not be ready for this and that's ok. But you need to start at least thinking about it. Because if you don't know what you owe, how will make a plan to get rid of it, right? So this Frugal Friday is all about getting those bills into one spot. If you want to go buy one of those fancy office boxes from Staples, go for it. They aren't too pricey. If you already have a filing cabinet, great. If it's an old Xerox paper box, that's good too. No excuses, just get them all together and if you get inspired and want to take it one step further, sort them according to what they are. Utilities, credit cards, etc. When you have that done, it's one Baby Step crossed off the list. Now eventually what you want to do is analyze each bill. They need to go into a priority sequence according to which one has the highest interest rate. Pay those first. Higher interest=more money being taken out of your pocket every day. I know some of the Divalicious peeps are sooo very savvy when it comes to the banking world so this part is not for you. But for the babysteppers, this is where you need to get down and dirty and dive into some unknown waters. Talk to a banker about consolidation. That's taking all your debt {or at least some of it} and putting it all together on one loan or line of credit. Often they will give you a MUCH better interest rate than whatever department store credit card you have.

***Frugal Friday Tip of the Week*** STAY THE HECK AWAY FROM DEPARTMENT STORE CREDIT CARDS UNTIL YOU HAVE THINGS UNDER CONTROL. When you have everything settled, then by all means take advantage of all the great sales and deals offered with such cards {I do-but that is an entire post all on it's own}. But until then {re: all debt paid} just avoid the life sucking little pieces of death all together.

Points to ponder:

* Learn about interest rates. What are yours? Can you get a better one? Don't be afraid to pick up the phone! Ask questions, that is what they are there for.

* Late charges add up! Even if you can't make a full payment, never, ever make a late payment. Write your due dates on your calendar. And if you are short, call the company immediately. You get more flies with honey than vinegar and a friendly phone call works wonders in eliminating those late charges.

* Credit cards are not cash. Period. If you don't have the money, don't spend the money. Give them a break and live on cash for a while. You'd be so surprised what you learn about your spending habits.

* The bank machine isn't always "magic". LOL OK, this is a little tidbit from my childhood. We always called it the "Magic Money Machine". Convenient? Oh yes. But those little suckers can kill your budget. Do you actually look at your bank statements? {I do the paperless on-line thing, it's brilliant} If you use a different bank's machine, your fees can run you anywhere from $1 to $5. When we lived up North, there was one machine in like a one hour radius and we were 4 hours from civilization. And our charges were $5. Each time. Ouch. If you went to the machine just 4 times in a month, that's $20 which equals a pretty nice lunch out. "Oh it's just $2." adds up pretty fast. Every penny counts. How often do you visit the magic machine?

* When it comes to your finances there are no stupid questions. What's stupid is to be unaware of things. If you feel uncomfortable or belittled when you are dealing with your banker then it's time to get a new banker. That is allowed. Did you know that some banks actually want your business? They will cover any fees or penalties that occur in the switch from your current bank. All you have to do is ask.

The long and short of it is to be informed, be proactive and get it out in the open. Get together with a few of your close friends and form a support group. Frugality might not seem as glamorous as a five star meal, 3 Starbucks a day, designer clothing and gorgeous sunglasses but it feels amazing. A...MA....ZING. Whatever will you fret about when money is no longer an issue? Worry about what flavour of cupcake you'll be making next. It works for me.


Cheryl said...

Sorry, Kate, I know where all my money goes, so dh doesn't need to worry his pretty little head about it!! What he doesn't know won't hurt him, etc etc.!!It's a good thing I don't use credit cards so he doesn't see any of the bills on them from me! He would have a heart attack if he saw my sb receipts, so in order to keep him around longer cuz I do kinda like him, I will continue to shield him from that sort of thing!!! LOL

sassy said...

very smart, I can't handle bank fees! I always make sure to keep a minimum amount in my checking account so I avoid withdrawl charges-that saves me money every month! My only credit card is also non-fee-why pay the credit card guys? I love earning my cash back, it goes right into my account so I am not stuck with gift cards for places I don't shop! Thanks Kate!

Anonymous said...

Never put both feet in your mouth at the same time, because then you will not have a leg to stand on.............................................

Anonymous said...

Well, Kate, I am still working on my stress level around this one. But I think you're right and so does Dr. "You cannot change what you don't acknowledge" Phil.

Kelly said...

Great Post Kate!!