Penny-Pinching Consumers
The economy has spurred Americans to save money any which way they can. Here’s where we’re pinching pennies:
Purchasing more generic brands 63%
Brown-bagging lunch 45%
Going to the hairdresser or barber less 39%
Cancelling one or more magazine subscriptions 33%
Cutting down on dry cleaning 22%
No longer purchasing morning coffee 21%
Cancelling cell phone service 15%
Source: Harris Interactive (www.harrisinteractive.com)
Let’s not take for granted our right to save for the future.
Save and invest, month in, month out–it sounds like a grind, especially now, when many Americans are cutting back and saving more for retirement. But if you turn it around, you realize that just being allowed to save money and keep for yourself some of what you earn is a privilege that not everybody enjoys.
A case in point is the North Koreans, who are participating in a government-sponsored currency exchange program. All citizens of North Korea are required to trade in all of their savings–that is, the bills and coins that they have collected from private activities like sewing clothes or growing food in their back lawns.
These savings are always in the form of actual money, kept in jars or boxes, because the Korean banking system doesn’t take individual deposits the way banks do in the U.S., and there is no stock exchange for local citizens–or, of course, access to global investment opportunities.
The old North Korean money is no longer accepted anywhere. It must be traded for new bills which depict the log cabin where the Dear Leader and former Communist strongman Kim Il Sung was born.
Here’s the catch. Each family is only allowed to exchange 100,000 won–the equivalent of about $30. That, astonishingly, represents the most any private citizen will be allowed to have in total savings after the exchange, no matter how much they had before.
Let’s not take for granted our right to save for the future.
This is a great time to consider how lucky we are to live in a country where we are encouraged–and allowed–to save and invest for our future. Nobody will ever knock on our door and tell us that after a lifetime of work, the money we have set aside is no good anymore–except 30 dollars, or roughly the amount it costs to buy a large bag of rice.
Compared to that, the grind of saving has the sweet taste of freedom.
If you would be wealthy, think of saving as well as getting. Benjamin Franklin
Topic Toolbox
How do you cut costs if you are spending too much?
No matter how tightly you try to control your spending or how strictly you follow your spending plan, at some point you are likely to wonder how you can cut costs. In order to find out how to cut costs, you first need to find out where and when your spending occurs. Then you can decide whether you need to make major changes or if minor adjustments will do the trick.
Spending is a behavior, and, just like any other behavioral change, it requires monitoring while you are trying to change it. If you feel that you are spending too much, here are some suggestions for cutting costs.
Find out when you spend the most
If you track your spending for a period of time, say a month or a week, you may discover a pattern. You may be spending more when payday comes or when you are frustrated or stressed. Identify those soft points and use extra caution when you find yourself in those situations.
Identify the items on which you spend the most
For many of us, buying clothing may involve shopping around to find the right price, but looking for a sale for groceries may not even occur to us. There are certain categories in which overspending is more likely to occur. Identify those categories and try to find out how you can reduce your spending on them.
