FINANCIAL PLANNING IN STRANGE ECONOMIC TIMES
By Ronald D. Rudich, CPA, MCBA, CVA/ABAR/MAFF
MAY 18, 2022
Whether you’re still working or retired, now is a good time to pay even more attention to your household expenses. By doing this type of review, you may be able to ‘target’ some expenses that you may do yourself, may do without, and may seek to find it elsewhere cheaper.
Prepare a list similar to the one below and see if in these tough financial times where you may save time and money!!
Garages like to put on the oil change sticker for you come back after 5,000 or 6,000 miles particularly if you use a synthetic oil. Most cars don’t need the oil changed until 7,500 miles has occurred. This equates to two (2) oil changes per year of ‘normal’ driving.
Don’t fall for ‘Upcharges’ at the garage. Changing the fluids in the radiator and brake lines are usually NOT needed at all!
If you can, rotate the tires yourself, especially if the garage is going to charge you extra for that service. You may switch the tires in a front to back pattern or in an “X” pattern. Don’t forget to check with a neighbor or relative so that you may do each other’s cars together.
Don’t forget about car-pooling; to schools, church, shopping, work, birthday parties, family meetings, etc. and taking turns to do so.
If you have more than one car (or want to do this with a neighbor), buy one or two ‘five-gallon’ gas plastic cans and fill-up when you get gas. This will save time and gas when you want to fill the other car(s). Read the directions on the can to ensure that you will be able to open the nozzle and then how to properly fill your car with the gas to reduce spillage.
Change your own oil and filter (if you’re able and maybe with a neighbor). The best prices for these products in my area is Walmart. They sell the oil in 5-gallon jugs and a larger variety of oil filters.
If you belong to a ‘warehouse store’ like Costco, buy in quantity when it goes on sale. This warehouse is best for clothing, vitamins, lighting, bakery, produce, milk, eggs, frozen foods, TP, etc. and medicines.
Although, Costco charges an annual subscription fee, you will more than make up that charge by the savings in gasoline and sales items.
STOP buying cakes, cookies, potato chips, ice cream, desserts, etc.; they are expensive (the sugar, icing, etc.) and you might even lose weight in the process.
With summer coming, you may find the best deals for fruits and vegetables are purchased from a Farmers Market nearby.
Shop the newspapers and circulars for sales on grocery items and for specific coupons on those products you use. If the item doesn’t limit you to one or two at most, stock on as many as you would use over a long time especially if it the item is non-perishable.
Try to see if you may continue to work from home. If your boss wants more of you to come back to the office, see if you’re able to negotiate still working from home as many days as you can.
Don’t forget to lower your thermostat at least one (1) degree or two (2) degrees; this will save on electricity.
Also, when leaving a room, turn off the TV and turn off the lights.
If the climate is reasonable and comfortable where you live during the day and night, turn-off your heat/air conditioning altogether to further save electricity and $$.
Cut your own grass and prune your own bushes, if you’re able.
Places like Home Depot and Lowes conduct workshops for home repairs. If you want a specific workshop that is not listed, ask for some help from one of their assistants. By doing this yourself, not only will you save money (if you don’t have to repair it twice!!); but the reward is self-gratification of a job well done.
Please don’t tackle electrical and/or plumbing problems if you are the least bit unsure. You could severely hurt yourself and/or someone else and cost you a lot more $$ than you would with a professional.
MONEY – HOUSEHOLD INCOME
If this is the year you become 62 and you need money, even if you’re working you may file for Social Security Benefits (“SSB”). They define a work-year as a “work credit.” The maximum work credits that are considered at age 62 is your highest earned 40 years of service.
The SSB rules are so very complex, you NEED to make an appointment to see a government specialist or the HR person where you work in order to receive some basic information that is available to you. THIS IS VERY, VERY IMPORTANT.
You need to find out if it will benefit you to file and collect once you become age 67 or wait and receive a ‘bonus’ when you become age 70.
Don’t forget to find our what options you have in your state by way of a Grant. A Grant is money that you have to report as income, but do NOT have to pay back
Also, check with your house of worship to see how they may assist you with your needs.
STOCK PORTFOLIO OR OTHER INVESTMENTS
NOW is NOT the time to sell any investment when the markets are down at least 25% to 50% from 2021. The stock market has historically decreased from its “high” fifteen times and has come back even stronger by surpassing that previous high.
Only sell if your you have no other choice to cover your family needs.
Now IS the time to SAVE CASH in order to wait and buy the same investments to ‘average-down’ (lower the average total costs of your investment) what the market does start to make that move up again.
Unless you need something immediately, don’t forget to shop Online at a site like Amazon or eBay. Most items you may receive in one or two days. Taking the time to shop online and comparing prices is the best way to assure you will be saving some very hard-earned cash.
There are many other independent “stores” that have the products you use every day. So don’t forget to enter the ‘product’ you’re researching to realize how many vendors are listed to expand your knowledge and cost awareness.
Most important is to understand if shipping is included in the cost of your purchase. Shipping today is much more expensive because most trucks use diesel fuel which is the most expensive. A product on one site may “appear” to be the least; but once you checkout you may then see how much more expensive it actually will be with the shipping costs. This goes for companies that charge for handling/processing in addition to shipping. You must become “sharp” buyers when using the Internet.
Your money belongs to you so spend it wisely during these times. We just don’t know how long this economic situation will last. If the present condition gets worse realizing we are in a Recession, it could last until sometime in 2024.
A technical Recession is defined as a period of temporary economic decline during which trade and industrial activity and services are reduced and generally identified by a fall in the country’s Gross Domestic Products (GDP) in two consecutive quarters.
So, when and if this occurs you will hear the news media state the country is in the depths of a recession. By observing the above issues in order to protect your funds, you will be prepared for the future. However, if the recession doesn’t come but it still takes time for people to go back to work, the supply-chain issues have been resolved, there are no more wars in the world, fuel prices “come back to earth”, etc. you will have been prepared and not hurt as much….and that’s a good thing!!