Comments on: You Need To Cut Your Spending. It Sounds Painful. Now What?

By: JuliB

JuliB — Mon, 28 Mar 2011 21:29:09 +0000

The Chicago Tribune had a write-up last week about a family that made drastic changes for a month to see how much they could cut their spending without too much pain but still close to cold turkey. The figure was around $500, with food, clothing and entertainment being the biggest chunks. Food of course included stopping for coffee, buying snacks at work, etc.

They ended the article by saying they felt better about being able to weather possible financial storms in the future.

By: marta

marta — Mon, 28 Mar 2011 18:31:32 +0000

Interested Reader, I am sure Trent mentioned JD’s post in one of his roundups.

Yeah, there it is, from March 23:

“Do Programmable Thermostats Really Save Money? They absolutely do if you don’t fuss with them. The problem is, people seem to fuss with them a lot. If a programmable thermostat doesn’t save you money, it’s not the thermostat’s fault.”

I guess that’s why he still stands for them.

By: Cristina

Cristina — Mon, 28 Mar 2011 18:27:06 +0000

Actually, if you had read the thermostat article and its comments, you’d have learned that programmable thermostats DO save money when used correctly. The problem is that some people who use them feel like they saved so much money during the night or when they were away at work that they deserve to bump the temperature up or down during the rest of the day, in effect wiping their savings. Leave it alone, and it will save you money.

By: Interested Reader

Interested Reader — Mon, 28 Mar 2011 13:37:11 +0000

Yeah JD over at GRS saw Lurker Carl’s comments about programmable theromostats, then went and did several hurs of research and wrote up an blog post about how it doesn’t necessarily save money.

And yet Trent didn’t seem to catch that on his own blog.

By: Robert

Robert — Mon, 28 Mar 2011 12:01:37 +0000

@Derek #4: I’d say if your spending more than your bring home, stretching out your payments is probably better than the alternative (being driven into bankruptcy). Under ideal circumstances you would want the shortest loan period possible to reduce the interest you’ll pay, but when your monthly cashflow is net negative you are better off paying a lower amount each month if that will help you balance your budget.

Just make sure that the refinanced loan includes no prepayment penalties. That way if/when you get to where you have extra money in your budget you can start to send extra with your mortgage payments.

I bought a home last year and deliberately worked out my loan such that my payments are well below what I can afford. I usually send extra money with each monthly payment (directed at the principle, of course). If I have a month where I am tight (extra or unexpected bills for example) I can choose to send just the minimum and hold on to the several hundred extra that I normally send.

By: Shane

Shane — Mon, 28 Mar 2011 09:16:45 +0000

“Do not let yourself get miserable because of frugality.”

This is so true. I think that gradual behavioural changes are easier for people to deal with and give the most long term benefit.

I especially like the idea of keeping track of all the “small” savings. That way end the end of the week or month you can see the big effect that the small changes have had.

By: MoneySheep

MoneySheep — Sun, 27 Mar 2011 18:35:39 +0000

I would include starting to manuever assets away from your name, just in case you have to file chapter 7.

By: Maureen

Maureen — Sun, 27 Mar 2011 16:37:59 +0000

Re: Programmable thermostats. Get Rich Slowly discussed this in detail on Mon. March 21st. Installing one often ends up costing people MORE! Check it out before you run out and spend money on one.

By: Derek Illchuk

Derek Illchuk — Sun, 27 Mar 2011 15:37:51 +0000

Trent,

You mention someone in a Getting-to-Zero situation may want to refinance their mortgage. Here, are you advocating a longer amortization term? And if so, at what point does the idea of stretching out your mortgage go from good to bad?

Thanks,
Derek

By: Rafiki

Rafiki — Sun, 27 Mar 2011 15:19:14 +0000

Solid advice here.

By: Brittany

Brittany — Sun, 27 Mar 2011 15:09:05 +0000

No new information here for a long-term reader, but a solid post never the less. This is a good post to pass along to people new to the frugality paradigm who haven’t quite had the full shift yet.

By: Ginger

Ginger — Sun, 27 Mar 2011 14:47:47 +0000

My new behavioral change is using coupons/sales to cut down our grocery bill. Using sales I was able to cut our spending at the store down from $70-$80/week to $55-$60 a week but save the amount we need for a future we need to be under $50. I have started using coupon matchups online and shopping at different stores again. I am saving at least $5 every time I shop, just by using coupons.