Stockpiling stuff

[Aleta]

Something that I read some years back really was a light bulb moment for me. This author said that people who think that they are saving their most money on big items such as a TV, furniture, computers, etc. are fooling themselves. As he said, how often do you buy a TV, or furniture, or a car for that matter. He said the real savings are in the everyday purchases that we make. We use toothpaste everyday, we eat everyday, we clean our house everyday, some wash clothes everyday. He said that some people scoff at a 10 to 20% savings and yet how many would like that return on their investment every year? So if an item is $1.00 and it has been reduced down to $.80, that's a 20% savings right there. Plus, the savings aren't taxable. I didn't use to think that was a great savings either, but I now realize how right he was. It's the everyday stuff that is taking our money. It's the little unseen and often forgot about newspaper on the way to work, coffee at the donut shop, tips to the waitresses, candy bars at mid morning, and on and on and on.

Lux Living: That's why I liked the book ALL YOUR WORTH by Elizabeth Warren and her daughter. That's why she uses %.s for must-haves, just like you were talking about (unemployment checks). According to her, if you live within your 50% must-have, you could live on an unemployment check.

[JanH]

Aleta, I never thought of my cents savings that way! And they do add up!

[Aleta]

JanH: Even if you buy an item for $2.50 and you have a coupon for $1.oo; that;s a 40% savings. I put that coupon money to the side and add it to my savings or $20 challenge. Sometimes there are BOGO and you have a coupon for that as well.

[JanH]

Wow, that's way cool! I have started using sales and coupons when I have them, but I never thought of how much of the price I was saving. When you see it that way, it is awesome.

[LivingAlmostLarge]

Think of it this way, you can't save on TV aleta, but you can save on not stretching to buy a home. Maybe instead of $5 latte, you shouldn't stretch to buy the $500k home and get the $400k home. It's really easy to go BK when you take chances and have great risk in buying a home.

[Aleta]

LIvingAlmostLarge: I totally agree with you. I think that one of the big poblems that people have today is that they are stretching too much to buy a house. Plus, some buy houses that are so large that they require alot of maintenance. With a big house, you need more furniture, a larger BTU AC, more furniture to fill it, more paint to paint it.

I was mainly talking about consumption items. Things that we use everyday. The house takes a lot from the budget including maintenace, taxes, property insurance, etc.

[LivingAlmostLarge]

I also think cars drive people into BK. how so? new car every 3 years rolling over into another loan, then turning to CC to keep up with a lifestyle not supported by income. Sure you can cut $5 here and there, but once you are like $60k in debt on a $60k income it's sort of hard to get out without some major changes.

Like selling the car, moving to a cheaper place, budgeting, etc. It's just people having fixed expenses that are too much for their income.