I’m really surprised by the news that people aren’t cutting back on their driving even with gas prices around here above $4.00 a gallon. They say it’s because of the good economy. I say they are wrong. It’s because most people received a tax refund and are flush with money at the moment. When the money runs out they will slow down on the driving.
My son and his family worked very little last year. They earned under $10,000 but with their welfare, food stamps, discounted rent, free medical, their actual income was over $30,000. Not a lot but they still have a computer and a 52 inch tv. They had about $200 taken out of their paycheck for federal taxes but got a return of about $7000! More free money from the government. They went on a spending spree. They bought a used car, furniture, clothes, toys (including a $300 electric riding toy for the kids), and a bunch more stuff. They go out to eat and have lots of money to spend on gas. I figure that their extra money will run out in another few weeks.
I didn’t even try to convince them to save any of the money. That would have been a waste of my breath. I did try to convince them to spend it on things that mattered. Things that will last. The $30 dollar dressers they got for their kids are already broken. The gas prices will slow them down soon.
Army daughter and son-in-law want to buy a house. They don’t have to save up much since they are both veterans and will qualify for VA loans which take little or no down. They are trying to figure out how to save money. They sat down and figured out what they spend money on. They’ve never had a written plan since they’ve always had a little extra at the end of each month to put into the savings.
When they told me how much they take home I made a comment that I take home about the same amount. Then I said I take home more because I have some automatically put into an account to pay the taxes and insurance and more gets put into a 401k, but the actual amount that flows through my hands each month is the same as what they have. The difference is that I pay more than twice the amount each month for the mortgage than they plan on paying for the mortgage, taxes, and insurance on their new place. Well then, they should be able to put away a lot of money in the next couple of months since they are living with me rent free.
Army daughter was trying to figure out how to spend less on food. She’s been buying most of the food for the entire household, not paper products, cleaning supplies, and other things, just food. She volunteers to do this because they live rent free. She said that her food budget is about two hundred dollars per week. Huh? I spend that per month. I don’t understand how she can spend that much. That’s almost thirty dollars a day. Then I got to thinking. They buy a chunk of meat that costs between $10 and $15 (what doesn’t get eaten goes to the chickens), Starbucks drinks at $2 each, and little packages of stuff that cost 10 times as much than if you’d buy it in bulk. I buy a gallon of mustard for $4 and she buys a little bottle of designer mustard for $6. Our chickens are eating well because they throw away a lot of stuff.
I suggested $25 a month for clothes for the baby. She budgeted $50. Why I asked? Baby clothes are expensive. Not really. The baby is in 6 month size which will last for three months. I could go to Target and buy a weeks worth of clothes for $50. At $25 a month it would take two months worth of money for stuff that would last three months. I know that I can get used, borrowed, or cheaper stuff, but they wouldn't do that at all. I just think differently. If I budgeted $75 for three months and spent $50 then I'd be able to buy more supplies, fruit trees, six chickens, etc. Spend it on something tangible for the future.
Army daughter’s budget included three round trips to town each day. Although only her husband works she has to go in to town for appointments, shopping, college one night a week, etc. I was trying to convince her to drive less. After all, it takes about two gallons of fuel for each round trip. At four bucks a gallon they are averaging $24 dollar a day in gas, seven days a week! If I have to fill up my truck more than once a month it better be because we are going out of town because this gives me three trips into town on a tank of gas.
I have to drive to town to go to work, although a couple days per week I can do my work at home. On those days I try not to leave the house. If I run out of something, which is rare, I don’t rush out to buy it. I wait until I’m going to be in town. My normal days in town are Wednesday and Sunday. It’s a very rare occasion that I spend money any other day.
What if It is today, I asked her? Would she go into psychological withdrawals if she couldn't go into town and shop? Can she differentiate wants from needs? I challenged Army daughter this evening. No going into a store more than twice a week. I’m not even telling her that she has to have a list to shop from. Just stay out of the stores. Don’t make the trip in to town. Right now they are spending over $700 a month on gas. Cut back on driving.
For her, that means money saved for a house. For me, that means more money for preps.