Frugality

The Lost Art of Savings

Posted March 9, 2009 by Bernz

Once upon a time in a land far far away, people put aside some of their earnings for a rainy day. They knew that there would be flush times and lean times. When things were good, they would squirrel away crops, can their own vegetables, and tuck some money away under a mattress. Inevitably, hard times would come, and those who had prepared ahead of time survived from their savings, while those who hadn’t bothered saving when times were good suffered.

piggybankThe average amount of savings per capita in the United States has declined by more than 80% in the past twenty years. What were once luxuries that people saved up for are now waiting to take home with a simple signature on a loan document. Total debt versus income has more than doubled in that same time frame. Now, instead of setting aside savings every paycheck, many people are making loan payments.

Debt represents risk. The more debt you have, the more vulnerable you are to economic shifts like the one we’re having right now. The prolonged recession we are experiencing is causing many- who live on the financial edge at the best of times- to falter. Personal bankruptcy rates are soaring as debt loads become unbearable and incomes disappear. Living beyond their means has caught up with many people and there is only more pain on the horizon.

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A Penny Saved is Worth More Than a Penny Earned

Posted February 9, 2009 by Bernz

When I was young, my grandmother’s favorite saying was, “A penny saved is a penny earned.” At that age, money was an odd, far-away concept for me so I really didn’t understand what that meant until I was older. The old aphorism simply means that money we save is less money that we have to go out and make. It seems like a very simple truth, but, in fact, a penny saved is worth far more than a penny earned.

Consider this example. You make $10 per hour at your job. You have two choices: you can work an extra hour to make an extra $10 or you can save $10 on your grocery bill by cutting coupons for an hour. Each choice takes an hour of your time so, at first glance, they appear to be equal choices. But they are certainly not.

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Bartering Away the Recession

Posted February 5, 2009 by Bernz

As the daily economic news continues to paint a bleak picture of the health of American business, consumers seek out new ways to make the dollars stretch until the end of the month. A very old way of doing business is once again gaining popularity for its frugality and simplicity. Barter has been around ever since the beginning of commerce, only becoming more scarce as money took over as a means of trade. In the past several years, however, barter has become fashionable and organized barter networks have popped up all over the country.

Barter networks bring together those who have goods and services to trade and allow them to do so with pseudo-cash. These “barter dollars” accrue in members’ accounts and can be used to purchase other available items or services offered on the network. The bartering can be done face-to-face at barter meetings or, increasingly, on the internet.

Bartering helps the under-employed use their skills for compensation from customers who might not otherwise have the cash to spend. It then lets members purchase from any other member on the network with the “money” earned.

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