Living good in bad times

 This was posted on one of my yahoo groups, Its some seriously good advice. The only thing I would add is  if you can do it use wood heat. You can live on less then 700.00 a month and use these tips as well .



"The last few years with the economy depressed we as a family have lived on less than 30,000 a year. The Government calls us below the poverty line. However due to what I think is just common sense financial management we eat better than a lot of family or friends. Mostly own our home, own a 38 ft sail boat and since we needed a 4 door car with the new baby I went out and bought a used Honda for cash. I also try and keep enough cash in the bank to pay 3 or 4 months of bills.

I know so many people that make more than me that always seem to be strapped for cash and barely making it. But they are financing new cars, very expensive houses, eating out every day, smoking, drinking etc..

If you are living a fairly normal life with steady income these rules will help you live beyond how most people in the same income bracket do and have cash in the bank.

1. don't finance anything. If you can't afford to pay cash then you don't really need it. I have broken this rule a few times in emergency's but then have busted my butt to pay it off as quick as I could by sacrificing any fun till it was paid off.

2. pay a car payment every month to yourself in a savings account. In 3 or 4 years you can go out and buy a car for cash.

3. don't purchase a new car. Buy one used. Take your time and wait till a good deal shows up. I start shopping for the next car 6 months before I actually think I will need it. This allows me to find the best deal and the vehicle I really want.

4. Get as high a gas mileage car as you can. I went from driving a 20 mile to the gallon vehicle to a 35 mile to a gallon vehicle and it put an extra 150 dollars a month into my pocket that I had been spending on gas. I swear by Honda civics. My 2 door that I'm getting ready to sell has gotten 34 to 39 mpg during the time I have owned it. The new 2002 4 door civic I just purchased is getting 35 miles to the gallon. My average annual maintenance on 3 different Honda civics has averaged about 500 a year on cars with between 110,000 to 184,000 miles on them. About 40 dollars a month average. Parts are cheap for them. If I did the work myself it would probably be less than half that. (for those that start foaming at the mouth about buying American.. well my Honda's were built in Ohio.) all three cars were bought for between 1700 and 3000 dollars. Cars eat a huge chunk of our money between financing, gas, purchase price, maintenance, registration and taxes,
and insurance. Be smart about it. New is pretty and rides super smooth :) but cost 4x a older used car.

5. Go over your monthly bills with a microscope. In 2008 when stuff went south for our finances we saved 1200 dollars a year by cancelling the two land lines to my business and home and just using cell phones. We saved 400 dollars a year cancelling cable service and didn't miss it. We kept the Internet and if we want to see something you can stream almost any show over the Internet. We did netflix for a while but cancelled that also as we ended up not using it much after a while. another 130 dollars a year savings. We went to an unlimited plan on the cell phones. This actually averaged out 200 dollars cheaper than the past 2 years cell phone bills. We quit eating out as much, this saved about 2400 a year. We still go out a few times a month but not every other day just because it is convenient. Work on reducing your power bill. Insulate your water heater, find and seal air leaks in the house, turn off lights behind you, don't leave computers running all
the time, turn the thermostat up or down a few more degrees depending if your heating or cooling. For us this saved about 500 a year. We don't economise much on food for the house. We like speciality teas and indulge ourselves. We do shop for good deals between the grocery stores and costco, sams etc..  and save a lot of money. We buy in bulk and have learned how to store stuff so it doesn't go bad. We eat 90% of all left overs before cooking anything else. We cook many things in bulk and freeze meal sized portions for eating later.

roughly for this list it added up to 4830 dollars a year we cut from our budget in 2008. I can't say that we missed the stuff or hurt doing it.

6. When purchasing "things" always shop around for the best deal both for quality and price both locally and online. Price matching is your friend. Coupons or coupon codes online are your friend. I purchase locally if I can get a good deal or the vendor will price match. I think I average about 30% off on retail by working at this.

7. always save save save every last dollar you can for an emergency fund. I have lost most of my income twice in the last 12 years. Both times I survived because I had saved enough money to pay the minimal bills until I could get a job or start a business that replaced that income.

8. if you have to go into debt, never have payments that you couldn't pay if you lost 50% of your normal income. This rule has saved me in both the above referenced instances where I lost major income during the dot com crash and in the recent recession.

By following all this fairly reliably I have been able to put many thousands in the bank and save to buy my current boat for cash, my last three cars for cash, have 3 to 5 months bills in the bank.

I have to admit that it helps tremendously that neither my wife or I are addicted to cigarettes or alcohol. those seem to be major expenses in a lot of peoples lives. I would hate to not be able to afford my book addiction though.

anyways.. I grew up poor and learned how to be happy with less I guess. I don't need new or newest. something that is reliable and functional seems to work fine for me. It's certainly much less expensive than trying to keep up with the neighbours.

interesting topic. I was just thinking about this the other day.

sadly because I still owe on my house I am still tied down financially. I will never finance a house again. I will purchase outright or buy land and build a small house on it myself. I cringe when I look at the 10's of thousands of dollars in interest I have paid over the last decade, and I only financed for 20 years not the 30 that a lot of people do.

Live debt free!!!!!!!

Scott"

A Little Bit of this, A Little BIt of That

Wow I can't believe it has been so long since the last post.
If you have been following this blog the last post was about getting my bedroom floor finished.
I'm in there on my knees sanding and realized we had not refinished the window.. What was supposed to be a fast refinish it and put it back, turned into a full fledged OY!!!!
As it turns out some where between it getting out of the window and into the work area, the window  fell apart in our hands, literally. The only thing that was holding it together was the frame around it.    Rebuilding a window was not what I had in mind for this week but......
The choices are:

1.buy a new window that fits exactly. Have you ever been able to match a window in a 90 year old house? Neither have I.

2. Get one as close as is possible and have to rework the siding. We just yesterday finished he exterior of all that tiny little details with only one small item left to do, once payday gets here. I AM NOT, I repeat NOT  redoing an entire side of this house just to match the siding in the window area. 

3. Rebuild the existing window.

Let us not go into that except to say it is getting done.

My bedroom turned into the work room while all this is getting done. Hence the floor awaits. HOPEFULLY this the week we get my bed room cleared of all side projects and I can actually  continue on refinishing the floor.

The good news is  the shelf is finally up in my closet, a LOT of stuff is packed and loaded into the boat ready to go. the tiles have been bought for the kitchen floor, the lower cabinets are almost finished, the door to the  corner cabinet in the living room are waiting to be installed and  a LOT of stuff has been disposed of. Craigslist is a great place to put a curb alert on things you don't want to waste time taking to the good will. My closet is almost empty and my bath room is darned near empty of all that stuff that has been taking up space.
All things  considered a lot has been getting done.
For those of you just joining us, the question might be occurring, what does all this have to do with sailing much less building a home made catamaran?  It is simple , it has to be done so I can sell the house to pay for  a blue water boat I can live on.

I have decided what I am going to do with The Toy. I will strap it on to the V 22 and take it with me.
Fair winds to all