Hang Onto your Home by Economizing

By: Nelson Stewart

Well, it really isn't surprising that Christmas 2007 saw consumer spending down. The Commerce Department has released the consumer spending figures which show that spending was at its lowest ebb since June 2007 and that we spent 0.4% less at Christmas time this year as compared to last year.

Of course, this is a small drop in percentage. However, consumer spending accounts for approximately 71 percent of the gross national product. If the country doesn't spend, the country is normally headed for recession.

There have been enough foreclosures recently due to mortgage increases, without the rest of us getting broke and losing our homes due to price increases. Consumers are already feeling it and many of us have no spare cash over the monthly budget to make up the differences in heating bills, in gas bills and in food costs.

With the price of gas rising by ten cents in the last two weeks and unemployment rates rising, we could be thinking about trying to economize in our own little neck of the woods. When we realize that energy prices have finally impacted wholesale prices by a whopping 6.3 percent over 2007 -- the biggest gain in 26 years, perhaps we should seriously be thinking about preserving funds.

It is difficult to believe that small economies will actually show up as dollar savings, but they will if you practice enough of them. If you manage to survive the tough times through your own merit, by economizing in the home, you may even feel a sense of achievement!

One effective way to greatly increase your monthly intake of money is to rent out a room. There are a lucky few that may live in the right area to take a boarder or rent a room. University towns often have foreign students who come complete with references from college and as they need to keep their visas clean, they will never be a trouble to you.

Having a foreign student will not intrude on your family life too much; dinner is taken with the family and most of the studying is done in their own room. Internet in the home is a must and having two bathrooms is preferable. This is a great solution as it gives a large lump of cash each month.

For those of us with no spare room, or who feel it too intrusive to share their home, well, there is always the tried and tested ways to save on bills. These include such small things as turning off light bulbs (it DOES save energy) and turning all electronics off of standby at night. Turn your thermostat down by about 4 degrees when you go to bed.

With appliances, wash your laundry in cold water, hang large items up overnight to partly dry, and in the dishwasher use the economy wash and leave the dishes to dry themselves overnight.

The possibility of car pooling, or even members of one family trying to use one car and 'drop' each other off to work or school will save gas. Gas is a fairly large outlay in most homes, so it is worth 'saving up' long trips to the mall on the edge of town until you have accumulated a list of things needed from all members of the family.

Try not to use the credit card - the interest is abysmally high and it is just money - your money - that is wasted. Look out for offers of switching your balance to a different credit card company and getting 0% interest rate to pay it back.

Once you have done this then put the card away and never use it! Often, the use of it will click the interest rate back into place, so keep a separate credit card for purchases, and pay them off each month.

In times of inflation, historically the interest rate goes up. Check your mortgage; if it is on a fixed rate that will expire this year, it may be worth paying the penalty and fixing it now for another five years. Also some lenders will let you adjust a couple of months early with no penalty, so it is worth making a phone call to your bank or mortgage broker.

Reading about (and practicing) small economies will make us aware that we can and should try to save our own money. Once the habit is formed, you will probably always save yourself some money on your bills and if you have a young family you will be setting them a good example for ways to manage their future!

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