Knock knock. Who’s there? Boo.
Boo who?
Don’t cry. Put your investment statements away and go give the trick-or-treaters some candy.
Yes, once again we find October turning into a dark, gloomy month. It’s cold, dreary, and grey. The trees have lost their colour and have given way to a skeletal appearance perfect for Halloween. The knobby, exposed, bare branches also remind us of our investment portfolios, and how much our financial futures have changed in a month. Like the trees, going from colourful to bleak.
The worst part of it is that with Christmas on the horizon, we all know the stocking may not be so full. Some of us will be home for the holidays, but not because our vacation was authorized, but because the Grinch came early with potential layoff notices.
The up-side of recession (if there is one) is that it provides businesses and households an opportunity to review their spending. When times are good it is easy to spend too freely. When budgets are leaner, we are forced to pay attention, and cut the fat.
My grandparents told me: “watch your pennies and the dollars will take care of themselves.” They lived through the Second World War and the Great Depression. They knew how to budget, save, and make do with less. I don’t feel as confident about the following generations.
Experts recommend starting by finding out how much your family spends each month (I recommend keeping a row for miscellaneous, for expenses you can’t remember by month’s end). After doing this for a few months, you’ll have a pretty complete financial picture, and then you compare it with the money coming in, review areas you can trim or eliminate, set a budget, and have a frank discussion with all family members as to how they can help.
Right now, if you want to find areas to save, check the fees you are paying for banking, telephone, cell phone, cable, and credit cards. Review a couple months of bills and the available plans with your current company and the competition. Look for opportunities to switch plans or companies if the savings are significant. Some banks offer no-fee banking, and telephone companies offer more competitive local and long-distance billing. Even one call to your current company can reap easy savings, like requesting a lower or no-fee plan and lower interest rates.
For example, last week I found out that I was not on “Bell bundle pricing” and I saved $10 per month with a four-minute telephone call to 1-888-313-5243. I’m still evaluating a switch to Shaw to see if I could save even more, but in the meantime, $120 extra dollars a year is worth the call.
In prior years, after a lean period, I downgraded to basic cable. At first I lamented the loss of A&E and a couple of sporting events, but I got over it, and saved over $20 a month. I saved another $50 a month by changing credit cards and banking packages. The experts also recommend debt consolidation loans if you are paying high credit card interest rates.
A recession in the late 1980s brought my family closer together, as we spent more time playing board games and talking and cut back on going to the movie and other events.
After the high-tech bubble burst, many of us stopped dining out as often, packed lunches for work, drank less and less-expensive alcohol, bottled our own wine, and went on a Starbucks “diet”, limiting monthly coffee purchases. Many of my friends quit smoking. Most of us trimmed our entertainment and clothing budgets, and I found a way to satisfy both needs: I held a clothing and jewelry swap party. Also, by shopping second-hand clothing stores, I did my wallet and the environment a favour.
I sliced my grocery budget by clipping coupons, by watching flyers for sales and buying in bulk, and becoming a master at knowing which store brands you can buy and not give up on quality. By shopping at Food Basics, on average, I saved $40 a month. I also avoid packaged food, finding I can do the same myself, for less, and have leftovers. Not a big cook? In a time crunch? Warm up to crock-pot cooking.
October is a scary month, not only for those of us who dread the looming winter, but because of stock market “dips” and spooky holidays. I’ll feel relatively safe as the zombies and goblins haunt my front doorstep on Oct. 31, but shrieks will be heard clear across the country if trick-or-treaters assume the scariest of all costumes, those of financial advisors, bankers, and pink slip deliverers.