Surviving High Inflation- 6/8/2008

Everyone is talking about how to save money, from hypermiling to simple saving. So I thought I’d try to explain everything that I’ve been doing to try to save money.

First, I save my money first, my expenditures come out second, and if that means I have less money to put towards clothes, entertainment, or even food one month then that is what happens. I am able to save about 25% of my net income right now, and I make sure I save at least that much each month. On top of that, my church is sent a check of 10% of my income automatically through my bank, plus two missionaries I went to college with get $30 a month apiece (recently up from $25 a month). I feel a little ashamed about that, but I’m not made of money after all. All this means I live off of 65% to 60% of my net income. If I spend less than that in a given month, the money goes in the bank. Make budgeting a competitive game for yourself and it can be fun.

Second, I have a Visa card that gives rewards based upon how much I spend. Recently, I’ve been redeeming those rewards for free $25 BP gas cards. It helps to drive a nice, paid-off Honda Civic, but its even $45 a tank to fill up that car now! I try to use this Visa to pay for everything I can and get maximum rewards, the secret is paying it off every month and letting the money sit in a high interest savings account until the bill is due. Some people who are not as meticulous about money as I am may want to avoid this practice.

You might be asking how I do at the end of my pay periods if I pay myself first through savings. Well, it can be kind of tense, but if you know you’re low on available cash you find ways to spend less, plus get overdraft protection if you don’t have it (and you can use that credit card you pay off each month during this time more). During these times, I go to Starbucks less, Ruby Tuesday is eliminated from my lunch possibilities, and I take more leftovers to work for lunch. Unexpected expenses are another issue, and yes I do have them, but that’s what the savings is for that I contribute to each month.

America’s been a nation of people that have forgot to save for the Rainy Day. If anything good happens from this period of high inflation it might be that Americans relearn the value of paying off credit cards and keeping money in the bank. I think inflation’s the chief problem right now, my recent economic studies for my IRA account tells me that. Prices will go down and everything will get better, it’s just a matter of when they go down. This is another good reason to try to save as much as you can right now, because with high inflation we will all have less spending power next month than this month.

Finally, I am trying to learn hypermiling techniques, though some of these are illegal and I don’t use those practices. It’s amazing what you can do with a car as long as you don’t drive like a maniac. I recommend coasting to red lights and avoiding turning your engine off while going downhill. You may lose your power steering depending on the make and model of your car if you turn your car off while going downhill. You don’t want that. :-)