Thursday, July 9, 2009

3 Biggest Money Black Holes

By Flea - Be A Survivor

I have found there are typically three things that people tend to waste money on or over pay for. Most people don’t even realize they are doing it, I routinely hear people saying they are struggling to pay their bills and yet they are usually in deep for all three of these money black holes.

Any survivalist will tell you to be truly free and ready to face the uncertainty of the future one must first liberate themselves from debt and consumerism. Recognizing your mistakes may be hard to do and I, of course, am to help point out the totally obvious to you. Many times I get emails that say to me what you post is common sense; I also get emails from people thanking me for pointing out those “obvious” things to them. What is common sense to one person may not be so obvious to another.

So what are you wasting a good portion of your money on?

1.) Without a doubt most Americans spend entirely way too much money eating out. People are dumping massive amounts of cash into this activity and may not even realize this is a problem. Eating out is expensive, unhealthy and HABIT forming. Once you get into the routine of getting your food out it is extremely hard to “kick the habit”.

When I was a child it was a big deal for us to go out to eat and was reserved for special occasions. Today folks have become addicted to fast food and Starbucks coffee. A typical meal out will cost you at least triple what you could have had the home made version for, if not more. A typical latte at a coffee shop is four bucks! If you spend a few bucks more you can buy a large can of coffee capable of producing a dozen POTS of coffee or MORE!

I routinely hear my neighbors complain that they are just making it and yet they eat out as a family three times a week! If I were having a tough time making ends meet I wouldn’t eat out at all!

2.) The next thing that people routinely get in over their heads on are vehicles. People buy more car than they can comfortably afford. This may come as a shock to many of my more frugal readers but it is not unheard of for people to have $500 car payments on a single car! Add to that most families have at least two cars and that adds up to a lot of money! NADA estimates that the AVERAGE car payment in America is $400. That is a staggering amount of money to have tied up in a vehicle every month. Take that with the fact that the average length of the payment agreement is five years.

That is a boat load of money to be tied up in just cars. The lesson here is match a payment with what you can afford worst case scenario not based on living month to month. Do not get a car that costs $500 a month just because you can afford it right now. Circumstances could change and you will be in BIG trouble when they do and you can only afford $280 a month.

Look at used cars, a car loses at least 15-20% of its value the second you drive it off the lot and most of the depreciation is in the first year. Let someone else take that hit for you and buy used.

3.) Everyone needs clothes right? Yep but not everyone needs clothes that sit in a closet with tags on them and never get worn. Kids also don’t need $100 sneakers they will destroy or outgrow in a few months. Don’t fall into the designer trap, run of the mill tee shirts and jeans are just fine. You will be just as warm in Lee jeans as you will be in Calvin Klein’s and you will be that much richer for it.

Clothes are like food, get the generic brand and you will be just fine. Stay away from the stores that peddle the “hip” crap because you will pay dearly for the privilege of “looking good”.

...that is all.

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15 comments:

  1. Having clothes in the cupboard with tage on them may be the sign of a prepper who does not want to run out of clothes when the big box stores close up shop.

    Michael

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  2. Michael,

    The point you make is valid but if we are really concerned about the stores shutting up permanently, would probably make sense to learn to make your own clothes.

    A relative of mine does this now and I will make sure she is part of my group when the SHTF ;)

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  3. Hi dude nice blog. But i was looking for Survivor TV Show. And through Google search i get this blog. But there is nothing about this show. But i am happy to see your blog really you have done a good job.

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  4. Miecky,

    Thanks for the kind words! No we don't do anything on the Survivor TV show but it makes me happy to know my blog can be found when searching for that subject.

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  5. Great post Flea. It is common sense (duh) but lots of people have ZERO common sense. Eating out is a huge expense people don't realize. You can cook the same food for a lot cheaper at home..

    matthiasj
    Kentucky Preppers Network

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  6. Once again, you have touched again on some things that need to be covered over and over for many people.

    I don't understand what is so hard to understand! Like I keep saying...some folks will never "get it!"

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  7. 4) Magazine and newspaper subscriptions
    5) Cable TV
    6) Carrying a credit card balance

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  8. Eating out - definitely a money-waster.

    I've heard people rationalize, "But I just LOVE eating 'fill-in-the-blank-food-item' and 'fill-in-the-blank-restaurant' is the only place I can get it!"

    Learn to cook it yourself! Go to www.copykat.com and look up the recipe. Instead of paying $8.99 to have someone else fix it for you at MegaRestaurant, make it yourself for a fraction of the cost.

    And clothes? If you can't make it yourself, there's nothing wrong with yard sale shopping, especially for kids.

    As for vehicles, don't "tote a note" if you can help it. Buy it outright - new or used. And learn to do your own auto repairs! (Invest in the Chilton/Haynes Manual when you buy the car!)

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  9. matthiasj,

    Thanks.

    Jim,

    Many people need constant reminding unfortunately.

    James,

    All good ways to save cash...good suggestions.

    TennZen,

    I always get the manuals for my vehicles as soon as I can. Lots of good info in them.

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  10. Lol, my newest vehicle is 42 years old.

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  11. My kids spent years convinced I was ruining their lives by insisting that if the words "but all the kids have them, they're the ONLY cool ones" came out of their mouth, they got to make a trip to the Salvation Army store for a similar item. I remember the year that Wally World supplied all the school clthes and they snickered all the way home over how many kids were really wearing that kind over the expensive stuff and claiming otherwise.

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  12. Busted,

    I think it is fair to say that vehicle has depreciated fully :)

    Herbal,

    I did the same to my parents, I think every kid does. It is up to parents to teach their kids that money doesn't grow on trees. You did right by them ;)

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  13. Try Wrangler jeans. Around $15 and all those rodeo cowboys can't be wrong. Compare to 30+ for Levis and just as good. Eating out might be cheaper if you get a sandwich off the dollar menu though. What can you get at the grocery store for a dollar?

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  14. Definitely agree with your assessment. One of the ways to cut down eating out cost is forego the combo and stick to the $1 menu. Burger King - get the BK Junior burger ($1.00), add a side salad ($1.39) and drink water (free) - about $2.50, and you hardly missed the greasy fries.

    #2 - keep a routine maintenance schedule on your vehicle. This will save you money down the line, catching the cheap repairs that will cost much more if ignored (they don't call it an 'idiot light' for nothing. :^))

    #3 Clothing - Good Will / Salvation Army. I used to look down on used clothing, but now shop there nearly exclusively - buy clothing waaaay less in cost there. Lots of it is hardly worn.

    #4 item to me - insurance. Ask for the high deductible and cut the cost to more reasonable price. Eat right, get some exercise, drive sensibly and stay off the roads past 11:00 p.m., when the drunks come out to play.

    Great topic - thanks for the post.

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  15. John and Anon,

    Dollar menu is great and when we eat fast food we usually hit that BUT it really isn't very good for you so while I would say yes it is a value, save it for a treat and eat at home.

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