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I would not recommend that you try to cut your food budget to the bone. Food becomes part of you, and good food is essential for your health. It is important to keep up morale while you are working on your savings plan, and good food makes you feel good about yourself.
There are ways to reduce food expenses without reducing the quality of your food. Cook at home, and learn to cook well so that the food you cook at home is better than restaurant food. Buying quality ingredients helps here. Spending time researching recipes and planning meals pays off. For the price of two or three meals at a good restaurant, you can eat well all week if you cook yourself.
Buy certain foods in bulk. Make sure you test the quality of the product first, and also make sure that you will use all of the product in a reasonable amount of time. An efficient freezer is very helpful. You will need extra storage space if buying products in bulk.
It may be worth it to spend a little more for quality foods that you prefer. Look for restaurant supply stores that also sell to the public, their frozen fish and chicken offerings are often of better quality than grocery store products.
When you have the time to cook, cook extra. For foods which freeze well, cook four or more times the amount you actually need, and freeze portion sized amounts to use as easy dinners later.
Have healthy convenience foods on hand for those times when you have no time or energy to cook a full meal. A microwave oven is very helpful!
One of the big questions is whether renting or purchasing a home will be a better choice for you. This will depend on the area in which you wish to live. While rental payments may seem high, do not underestimate the cost of home maintenance and home improvement. Even if you do the work yourself, materials are not cheap. As a homeowner you will be responsible for emergency repairs, where the renter just has to make a phone call.
The decision is affected by how long you plan on staying. Are you located in a place because of employment and do you plan on moving on after you can afford to leave employment? Rental may be a better option.
Are property values rising? Does the area seem to be growing in employment or are there characteristics which draw people to the area? Do you like the area and want to stick around? A home may be a good investment, if you choose the right one. Watch out for roof and furnace repair, two of the most costly home maintenance items. Make sure you have a property survey and title review by an attorney. Ask questions about any easements or lack of them, and verify water, sewer and electric services. Are the systems in good condition in your neighborhood? Can you expect a special assessment in the future for repairs?
Can you control your desire to add onto and upgrade your home? Most home improvements are money losing activities, although you may enjoy them. Think of the service life of any improvement and try to estimate the cost of the benefit you are adding. Compare the cost of purchasing a newer home that fits your needs rather than adding on to your existing home. It might be a better financial choice to purchase a bigger, better home than to upgrade an older home.
If you own your home, do your pay off the mortgage early or invest the money? Remember inflation works for the debtor. Your actual cost is your mortgage rate less the rate of inflation. Compare it to the investment rate of return less the rate of inflation. You should try to pay off the mortgage in about 15 years, which reduces the overall interest you would pay in comparison with a 30 year mortgage. The payments for a 15 year mortgage are not that much more than the 30 year mortgage. The 15 year payoff also fits the 15 year investment financial plan timeframe. When your investments are at a point where you can live from them, your expenses will be dropping as your home mortgage is paid off.
Telephone: Shop around, these plans keep changing, you have to keep looking for the best deals.
Electricity: Purchase only the most efficient appliances. Use only what you need. Some appliances stay on and draw power all the time, try to avoid this type.
Home heating and cooling savings: Caulk and insulate your home. Use an automatic thermostat which lowers the temperature at night or when you are gone during the day. Use alternative energy sources where they will payoff the purchase and installation cost in less than 10 years, and which have a service life of at least 20 years.
Water and Sewer: Limit water use by planting garden species that can handle dry periods. Reduce your water heater temperature to the temperature of a hot shower.
Identify household items which you have chosen as strategic purchases. When reviewing the purchase of a product, consider the following:
Note that price is last on the list. Nothing is more expensive than buying a product which is not suitable for its intended use.
List the household goods that you think you will need over the next few years. Prioritize the list. When you happen to be out shopping, compare prices and features and take notes. By the time you are ready to make the purchase, you should have decided on the type and brand of item, and should know where to find the best price.
When you select a job, look at residential neighborhoods within a mile or so. One of the biggest cost savings that you can make is to walk or ride your bicycle to work. You then have the luxury of being able to take care of car repairs at your convenience, delaying until you have the money to repair the car instead of having to get it done immediately so you can get back to work. Daily walks or bike rides to work are also very healthy. All you need to start riding your bike to work is a bike with fenders, light and a lock, rain jacket, gloves, cap and a bag or backpack to carry your lunch in. It will cost you less than two car payments for everything. Make sure the bike has a reasonably low gear ratio so you can take it easy on the way to work. That way you can avoid showing up sweaty and smelly.
Another important consideration is having a car repair garage within walking distance of your home. You can drop off your car and walk home, it is far easier than having to ask someone for a ride.
It is difficult to do shopping without a vehicle. Except for a few urban locations in North America, it is difficult to live without owning a vehicle. You also miss being able to drive around and see the lay of the land without a vehicle. A vehicle is also an entertainment expense if you enjoy sightseeing and travelling.
You can reduce your vehicle costs by keeping a vehicle for a long time. Every time you change vehicles, it will generally cost you a premium to do so. Taxes, sales commissions, shifting insurance coverage and registration of the vehicle all put a penalty on changing from one vehicle to another. It is almost always cheaper to do major repair work on a vehicle rather than sell it and buy a new one.
There is a balance between fuel efficient vehicles and safe vehicles. Sometimes bigger cars are safer.
Make sure that the type of vehicle that you choose can be used in different ways, that it can haul groups of people, building materials, boxes of stuff, etc. I have found that station wagons can often hold more items than pickup trucks.
A vehicle that is not reliable is worthless. Maintain your vehicle with reliability in mind. I don't mind a few scratches in the paint or rust spots, but I keep quality tires on the machine and tend to any lights, brake or motor problems immediately. As the vehicle gets old, I tend not to worry about windows that don't roll down, radios that don't work, dents and dings, etc.
Your goal should be to purchase a vehicle that will get you through 10 to 15 years of a savings plan. This means that a low mileage used car 2 to 4 years old is a good choice. Choose the right vehicle, pay it off in two to three years and then drive it as long as it remains reliable.
When an older car has mechanical problems, you need to assess whether it is worth it to continue to repair the car. One way of doing this is to find a suitable replacement vehicle and calculate the cost of sales tax, registration costs, increased insurance costs and financing costs. Compare these costs to an estimate of your maintenance costs with the existing vehicle. Its somewhat of a guess, but at least you have a value to compare it to.
Eventually, an older car will need to be replaced. When considering replacement, remember that every additional month that you can get out of the car adds to its service life, and the longer you drive it, the better deal you made when you originally bought it. However, there will come a time when its resale value as a usable vehicle today will be better than its salvage value at a junkyard tomorrow. You will have to use your instincts to know when that time has come. Don't sell to friends, family or neighbors!
Avocation means hobbies and learning, activities with a focus outside of your career and occupation.
It is extremely important to continue to develop personal interests when trying to save money. If your entire focus is on saying "no" to everything, such as "no" to spending, or "no" to any activity that costs money, for example, you will soon become depressed and will likely fail to continue your savings plan. You need to continue to occupy your time with things that fascinate you. The key is to choose personal interests that don't cost large amounts of money.
Most people seem to satisfy their need for entertainment by going out shopping, or purchasing something like a video, and consuming it. I maintain that this consumer orientation to life is a sickness and an addiction. The satisfaction is short lived and leads to a need for more items to consume. You can gain a far deeper satisfaction through activities that promote personal and social development.
Hobbies and learning are important. They keep the creative juices flowing and help rejuvenate you from work related stress. Often hobbies are closely related to your personal goals and objectives in life.
Explore hobbies that develop you as a person. Artistic work requires some basic instruction, a modest amount of material, and a lot of personal effort to develop your skills of expression.
Explore hobbies that help you learn. Technical hobbies, such as computers, internet, ham radio and electronics all can expand your abilities and can even lead to a technical career. Hobbies where you build something, such as cabinetry or model building provide a great deal of satisfaction, particularly if you work at an office job.
Explore hobbies that make you fit and healthy. Biking and other fitness activities are important to your health.
Once you have decided to invest your time and money into a hobby, do research and find out the best way to break into a hobby and make sure your first purchase will last you a long time. Sometimes beginners equipment is lower quality and after the first experience the hobbyist immediately recognizes the need for better equipment.
Try to avoid your impulse to purchase a high price item to get into a hobby. There are many hobbies that do not require much of an investment. Try an alternate hobby, for example decide to try to learn to play the recorder rather than the flute. For far less of an investment you will be able to find out if you are musically inclined.
Avoid "Gear Tripping", which is a focus on the equipment needed for an activity, rather than on the activity itself. Research ways of getting into a hobby cheaply, or look at the equipment you already have and use it!
Avoid hobbies that cost a great deal to provide temporary thrills or entertainment. While there is a place for an occasional visit to a theme park for a roller coaster ride, purchasing a jet ski or quad runner for thrill riding is a bad investment.
It is very easy to get caught up in a hobby and spend a lot of money on it. At the time it seems to be the most important thing in your life, something that you identify yourself with. A few months later, you may or may not even be interested in it. It may be worth your while to satisfy your curiosity by talking to others who are into the hobby.
One of the most important things about a personal interest is becoming part of a group of people that have the same interest. Choose an interest wisely and work on maintaining a long term good relationship with others who share that interest.
If you are going to enjoy your financial freedom, you need to preserve your physical and mental well-being. You need to be avoid the epidemic of obesity, and you need to make sure you have proper healthcare.
Food as poison
Obesity and heart disease are rapidly becoming the most dangerous epidemic in North America. Lack of exercise, overeating and eating greasy, high calorie foods are the cause. It is extremely important that you learn to control your intake of food, much in the same way that you control your expenditures with a budget.
It is heartbreaking to see how the affluence of many Americans has led them to poison themselves with food.
Conscious choice of food intake
The human body seems to crave greasy, high calorie food. It tastes good and makes you want to eat your fill.
To a certain extent you have to work against your inner appetite and consciously take control of what you eat and how much you eat. Only with discipline and planning can you overcome compulsive eating.
The key is to learn which food is healthy, plan your meals and control your portions.
Healthy food that tastes great
The consensus among diet experts is that obesity has reached epidemic proportions. This is caused by overeating, lack of exercise and by eating inappropriate foods.
An example of a healthy meal is fish, fowl or vegetable protein of about the size of your hand, plus as much fruit and vegetables as you care to eat. Avoid filler foods such as potatos, pasta, white rice, and products with white wheat flour. Foods with sugar should be avoided at all costs.
In order to easily cook healthy foods, it helps to have a freezer stocked with chicken breasts, fish filets and vegetables.
Tea is an excellent beverage and some teas may have health benefits.
Walking or riding a bicycle to work is an excellent way to get some motion and and activity into your daily life. Walking to do errands such as going to the post office or shopping for small items is a very satisfying way to get some exercise. Walking to a park or a coffeeshop to meet friends, or better yet meeting friends to go for a walk makes the time more valuable.
It does not take a long time to get a little exercise in. Often when taking a bicycle ride, I have gotten the impression that I have traveled a long way, seen a lot and passed through a lot of places, yet upon returning less than an hour has passed. You just have to get yourself started, set the ball in motion and then the fun begins.