Thursday, April 23, 2009

Maximize Your Savings during these difficult times

We are well and truly in the midst of a recession. Demand – both industrial and consumer, is at one of the lowest levels seen in many years, prices of most everyday commodities have fallen drastically, and the stock markets have witnessed lows, almost not seen since the time of the Great Depression of 1929.

Obviously, such difficult times require tactful ways of coping with the situation. Life cannot possibly go on the way it has been. Changes will have to be made; even with a healthy bank balance, with so much insecurity surrounding income and earnings, it is wise to bring about a more prudent and frugal lifestyle.

Of course, it is easier said than done. A lot of our spending habits have got so ingrained into our personality that we just cannot forego them, no matter how hard we try. It is like a battle that we are constantly fighting with ourselves. And with no change in spending patterns, it is we ourselves who are the losers. So, do you want to end up on the losing side? I am sure not. Follow the tips below, which will help you curtail your expenses and attune your lifestyle to the recessionary scenario surrounding us currently.

For instance, entertainment. Do you really need to go for the latest flick in town, which is playing at a theatre near you? After all, the cost of going to the movies is much more than just the cost of the tickets…there’s the gas that you will spend in driving to the theatre; once you get there, you will spend on food, and if your trip happens to be with your love interest, you will probably end up buying a gift for him or her as well. Now, if you were to watch the same movie at home, surely the cost would come down drastically – no tickets to be bought, no gas to be spent on, and no gifts to be purchased. Besides, the aforementioned, you would also save on a lot of time and effort, wasted in getting to the theatre, taking the tickets, and so on. My personal experience has been that buying DVDs or even downloading from sites such as Netflix, works out much more cost-effective. The movie remains mine forever, and I can see it as many times as I want, I can pause in between, attend to other chores, and yet at the end of it, my satisfaction from the entire experience remains the same.

There’s another front on which I have seen a lot of parents slip up drastically – their children on whom they simply continue to splurge even as they tighten up their own financial buckles. Remember, that if you are thrifty on yourself, but a complete spendthrift on your kids, the net effect would be zero or even negative, as your children’s demands will only continue to increase. Giving into their demands will encourage them to demand even more. So, remember to nip the problem right in the bud, and teach them firmly, not harshly, the importance of frugality, in the current economic scenario.

I am sure these tips would have helped you in judging the best course of action, for your own effective financial planning, in these difficult times.

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