Tips on getting your Economic House in Order

What is it going to take to get out of this economic mess? A LOT. What can you do to help yourself some? Here are a few thoughts:

1. Build your checking account. If you can get away with it, try to get about 3-4 months of savings in some sort of savings vehicle that you can tap easily. Try to get a good return (like an ING Direct account, or something like that), but if you can't it wouldn't be a bad idea to sacrifice return for cash at your fingertips. I have intelligent co-workers who tell me they are starting (for the first time in their lives), to put cash in a safe in their home. That may be a little extreme, but these days, nothing seems too crazy. How do you build the checking account? Here are some thoughts:
-cut down the 401k contribution a few points
-put $$$ in the savings fund before you ever get a chance to spend it.
-don't walk around with much cash, as a dis-incentive
-look for opportunities to earn a few bucks in your spare time. EBay or Craig's list can be a great tool for earning a few bucks, getting rid of things you don't even want (that Cuisinart your grandmother gave you, the CD Disc man you put on the shelf after you got your iPod. The CD's you loaded onto the iPod, for that matter).

2. Start looking at the things you spend money on--I personally have a small Starbucks problem. But the fact is, I have recently discovered that Dunkin' Donuts makes a mean coffee for $1.50, and I don't need to buy the $4.00 Grande Mocha. I may miss the mocha at times, but I like the $10/week I have for other things even better. Food trips tend to be stealth thieves of your money. Do your best to avoid them as often as possible.

3. Keep working hard, and keep your eyes and ears open--the work environment is getting a little tense, and the job market is getting increasingly tough. In my business too. Sometimes the easiest way to keep your job is to let your boss know you want to keep it. If you have a reasonable relationship with your boss, what does it hurt to ask this person flat out, "I want to keep my job. What can I do to make sure that happens?" You may learn the one thing you need to know to keep that income coming in.

4. Build in some basics at home--this does mean some fiscal discipline. It doesn't mean changing to a diet of only ramen noodles, or anything like that. But some of the places to take a look at costs include the following:
-Phone service--calling the phone company about a less expensive service--our phone company had continued to give us additional features (that we didn't really ask for or want), and then charged us for them. Also, our Internet service was being billed at a premium rate, but we weren't in a location even eligible for those rates. It was worth the call to save $20/month.
-Land line--speaking of phones, you may need a land line, to go with your cell phone. But I will bet a number of you don't really use the home phone for anything other than calls from your parents, or telemarketers. If you can just get your parents to trust the darn cellphone, you could probably save another $25-40/month, and just get rid of the home phone.
-Cable--Same as the phone service. You should really take a look at what you watch. Is it really worth the expanded package, if you really never watch the 15 home shopping networks, SPIKE TV, Encore, or ESPN8 (the "OCHO"!)? Could be worth $10-25 a month.
-Insurance--when was the last time you had an insurance agent look at your home, car, or even umbrella policies? Do you really need a $50 deductible on your car? Could be worth a few hundred bucks a year.
-Groceries--If you eat out a lot, do yourself a favor, make a concerted effort to spend two fewer nights a month out at the restaurants or bars. Eat in one or two more times, and spend an hour a week with a local paper to find a good deal or coupons on food you like. It is amazing how cash suddenly appears in your pocket.


It's not exciting stuff, and it won't make you rich. But you can make it more interesting. Challenge yourself to build a 3-6 month expense cushion by Spring. Too aggressive? How about Summer? If you are interested, leave me a note here with some questions, and maybe we can think about further options together.

I want everyone to make it through the next 18 months of tough times, with cash in their pockets, and looking for ways to make their lives better. Any readers thoughts would be appreciated.