Frugal Thinking Plans Ahead
Planning ahead saves money. That's easy to say, but for some of us, it is just not that easy to do. Sometimes that's because an, um, spontaneous, free thinking, free wheeling, personality does not do well with the constriction of, ew, plans. Yes, I describe myself in my twenties there (also I still chafe badly under the suffocating burden of schedules), and the advice I wish I could go back and give to myself in my twenties is 'get over it.' If plans are constricting, debt is more so.
Whether you consciously, deliberately, and with care work to help your children develop good habits, or whether you are of the more relaxed, 'eh, stuff happens,' variety of parent, the children are developing habits. They just aren't necessarily good ones. Whether you make a financial plan or budget and stick to it, or.... not, there are going to be calls on your money, many of them not as fun as spontaneity. The thing is, spontaneity has a cost, too. It may seem, to people like me in my twenties, constricting and no fun and joyless- hey- I wanted to be free to be moved by the spirit, ya know? But here's the thing- you can make a plan to control your money, or you can let your money control you, because it will happen.
You can be constricted by the icky mean old budget, or you can be even more constricted by debt, by creditors, by so many calls on your money that it's actually all spoken for before you get your paycheck each month. And why, I wish I had asked my 20 year old self, is it somehow more 'spontaneous' and 'free' to suddenly be faced with expenses you knew were coming but didn't plan for, rather than to plan ahead so that when the bill comes due, it's not a choice between eating and having car insurance, or eating and paying property taxes, or eating and paying for any other regularly due bill? Is it really more 'free' and less of a pain to find yourself clobbered with late fees, penalties, and excessive interest brought on by poor planning and weak discipline than it is to deny yourself those little splurges, that cup of coffee here, that hamburger there, the frozen pizza because you were too sick of beans and rice, the extra gas to go to the lake because you just 'had to get away,' that indulgence, whatever it was, and however seemingly small?
I often think that somebody should have whacked us upside the head with a credit card frozen in a block of ice and asked us those questions when we were twenty, but the truth is we probably would not have listened. After all, we did know better, and we got in a mess anyway. And then we got ourselves completely out of debt and slipped back in again, anyway. Some of that was do to utterly unforeseeable emergencies of the sort you really cannot plan for, but some of it was due to just sort of giving up under the weight of those emergencies and thinking, "It's already this bad and out of my control, what difference does it make?" Still, it might have helped, and periodic pep talks and straight talk certainly haven't done us any harm.
Most of us realize, usually through the school of experience, that planning ahead means fewer emergency trips to the grocery store, fewer last minute phone calls for pizza delivery, fewer exhausted 'just this once' drives through the fast food restaurants because you really cannot figure out what to do for dinner.
Here's another way planning ahead can save you money. Paying your car insurance in one lump sum is cheaper over the long run than paying it off in monthly, quarterly, or bi annual chunks.
I'm not saying it's necessarily easy, mind you, just that the hard work and sacrifice done now will save you money later, and the habit of doing the hard work and sacrifice now will also save you money later, and just about the time you think you just cannot save and scrimp and deny yourself one more week, if you push through that week, or month or whatever, the snowball will gain momentum, seemingly out of nowhere.
1. Call around and get price quotes from insurance companies (here's a good list of other ways to save on insurance).
2. Find out how much it will cost to pay the annual insurance in one lump sum. Divide that up by the number of months between now and when you would next buy insurance.
3. Set aside that money for car insurance each month, and do not touch it.
We have done that in the past, but for the last five years or so have found that harder to do, due to the unforseen, too big to be able to plan for and looming and heavy on my heart emergency I mentioned above. But the last year or two we got more serious about returning to our former frugal ways, and started setting aside the money we would need to pay the insurance in one lump fee.
The car insurance was due this week, so we just freed up one hundred dollars by looking ahead and setting aside 1/12th of the insurance payment each month, but we did more than that. We built up our self-denial muscles while setting aside that money each month and steadfastly refusing to look at it as available funds. That extra hundred dollars we might have had to spend on car insurance is now freed up for use somewhere else. It can jumpstart our car insurance fund for next year, so this year we would set aside that hundred dollars, deduct it from what we will need to pay the insurance bill next time, and then set aside that smaller amount each month.
It could go toward another bill, paying down debt in another area in order to get out of debt sooner. It could go towards buying items for resale. It could return to the monthly funds set aside for *other* regularly occurring expenses we now plan for by paying *ourselves* each month, setting aside 1/12th of:
our property taxes
medical deductables
spending for birthdays, anniversaries, Christmas
life insurance
Insert your fee that comes up every six months or every year, one you know is coming but it still manages to ambush you every year.
I know that this is not always easy. I know that sometimes it actually is impossible- there is just no give in the budget, nothing you can pare down anymore. Believe me, we have been there, too. But if you can do this in any way at all, no matter how small, it still helps. I'll write more about why and how next Friday.
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