Author Steven Lake

Making ends meet: It's not rocket science
Saturday, June 30th, 2012 11:11am
Keywords: (None)
On Facebook today someone brought up a very interesting point.  Namely, how it's so hard to make ends meet these days.  Yes, I agree, it's increasingly harder to make ends meet.  However, I don't think it's so much to do with prices, or less pay, or other things.  A number of our ancestors lived life years ago on what we would call "pocket change" these days.  These were people who lived on what one would call a wage that was less than the current minimum.

Yes, things were cheaper back then, but if you look at the actual value scale of products and resources over time, prices have not changed at all in the past 200 years for the most part.  The only thing that has changed is the value of the money which we trade with.  It's value has gone down, thus making it appear as though everything costs more.  In reality they don't.

For example, to use silver as a benchmark, one ounce of it buys the same amount of gas today as it did in 1920.  That should immediately tell you that prices have not actually gone up.  The only thing that has changed is that our money buys less and less these days.  But that's expected.  It's also not the point of this post.  I only added it as a way to point out that prices are not the reason for our diminishing buying power.

But here's another thing.  Inflation like this has happened numerous times in the past, and each time the value of the money used in that period has also deflated.  The bonus to all this is, once that money hits the top of its bubble, that bursts and its value goes up, and subsequently prices go down.  It's happened before, and will happen again, and again, and again.

So ultimately the only thing that's really changing is how much you're making in comparison to the economy.  But since that can't be figured in numbers, it's hard to qualify without throwing dollar values at it.  But I digress, as that's a whole other topic.  As I said, I just wanted to point out that things are not getting more expensive.  You're just making less value wise.  Which brings me to my primary topic.

What do you really need?

That seems to be something which has gotten lost on people these days.  In the land of plenty, the line between needs and wants has become highly blurred.  Especially when you are faced daily with an utter barrage of advertisements, product placements and much more that are created with the singular and solitary goal of making you buy their products.  The people who do this don't care about you, your family, or if you can put dinner on the table.  All they want is your money, which is to be expected in today's world.

So what are the things you really need.  Above and beyond all things, you need God in your life.  Without him everything else is pointless, futile and vain.  But with him you can do an incredible number of things.  Even the impossible.  God created everything and has said he will meet your needs.  All you have to do is let him.  So what are some of these needs he's promised to provide?  Well, that depends on a lot of things.  But here's a simple list of the basic needs of every human being.

1.  Shelter.  (you can't live more than a day or two without this as exposure to the elements will typically kill you.)
2.  Water.  (you can't go more than 3 days without this.)
3.  Food.  (you can't go more than 30 days without this.)
4.  Transportation.
5.  Security.

These five are the most elemental physical needs a person has.  Have you fully and reliably meet all of these needs in your life?  If you have not, then you need to drop or discontinue anything else that does not meet these needs.  That means canceling your cable/satelite and/or internet, stop smoking/drinking, going out to eat (it's cheaper to buy raw food and cook at home, and healthier), buying lottery tickets, stop buying snack food or vending machine food, stop buying new phones, computers, tablet pc's, electronic games, the latest and hottest cloths, etc.

In other words, STOP spending on every little thing that crosses your path, be it big or small, and start focusing on just the basics you need.  If you must, cut up your credit cards, stop taking loans, and make an 80/10/10 spending plan and stick to it.  An 80/10/10 plan is a system of money management that's simple.  80% goes towards bills.  10% goes into savings for rainy days.  The other 10% is set aside for giving, be it to your local church, or if you're not a Christian, to your preferred charity.

The system I prefer is the 50/25/25 plan.  It's incredibly hard to achieve, but it can be done.  What it requires is some incredible sacrifice and discipline on your part.  The idea here is to remove as much from your life as you can to reach a point where only 50% of your weekly paycheck is going to bills.  If that means downsizing, do it.  Get an older model car, a smaller house, sell the boat, the motor home, vacation at home, shop at a thrift store, and any number of things.

See my point here?  Living within your means is NOT ROCKET SCIENCE.  Okay, so you can't make ends meet now.  If you sacrifice a little, or a lot, depending on how much you have to give up, you will quickly find that your resources will stretch farther, and your buying power will increase.  But you first have to focus entirely on your needs first and foremost, and leave your wants to a time when you have the freedom to do so.

So if you're having trouble making ends meet, find out why, create an airtight budget, stick to it no matter what, sacrifice, downsize, and do what you must to make things work.  Another great way to save money is to grow a garden.  Yes, it's work, but the payoff is huge.  Plus, if you ever run into a financial snag, the money you'll save on food alone will help carry you through that rough time.

Either way, making ends meet is as simple as taking your eyes off the toys, dislodging the "keeping up with the Joneses" mentality, and focusing on just your core needs.  If you do that, you will discover that not only can you easily make ends meet, but it can actually become fun.  One example I know of is a lady who actually made a game out of it.  She liked game shows, so instead of getting her thrills watching them on TV, she set up a series of challenges for herself and then strove to achieve them one at a time.

So that may be one way you can work to make ends meet.  Personally, I agree with the idea.  The best way to solve a difficult problem is to make a game out of it.  Our parents did it to us as kids (and so did we to some degree), and it worked then, and it'll work now.  So here's my suggestion for making a game out of this, if that's the route you want to take to achieve a balanced budget.

  1. Don't spend money to save money.  The ultimate objective of this game is to save money by reducing costs.  So to spend money to save money is silly.  You need to take what you already have an use that to help you reduce costs.  Only if and after you've exhausted all other options can you spend money to try and save some.
  2. Become a do-it-yourselfer.  The more you can do for yourself, the less you have to pay others to do for you.  This can include either products or services.  For example, make your own bread by hand. (the exercise and experience alone will be worth it)  Mow your own lawn.  Improvise, recycle or re-purpose things around your house to meet any needs that may come up which would otherwise require you to buy something to meet that need.
  3. Monetize a hobby or learn a saleable skill.  This is a good way to bring in extra money.
  4. Downsize your gear.  If it's paid off, but expensive to run/own (ie, gas, insurance, etc), sell it and get something smaller and cheaper to run/own.  Bank any extra money you gain from the sale.  If it's not paid off, either sell or return it (if you can) and pay off the debt, then get something smaller and more affordable.
  5. Do your own laundry.  If you have a washer/dryer, see how efficient they are.  If they're not, get rid of them.  If they are, consider saving drying costs by hanging cloths on a cloths line outside, or an improvised one indoors.  If things are really bad, consider hand washing.  If nothing else, the exercise will do you good.
This is just the beginning of the things you can do to save money.  You just have to be willing to do them, and don't cop out or go the lazy route.  If you do these things, and stick to them, you'll find that not only can you make ends meet, but you'll have leftovers.  Another thing to remember.  Don't dip into your savings until you absolutely have to.  The more you can put away, and the less you have to touch it, the better.  This way later on in life, should you need something, such as a new car, new roof, etc, you can pay for all of it with cash, and won't ever need to take out a loan, even one for a house.

PS, if you have loans, I suggest dumping as much as you can on those loans and pay them off as quickly as possible.  Do whatever you have to, sacrifice whatever you must, and get them paid off or eliminated via some of the suggestions given above.  The sooner they're paid off, the sooner you'll find yourself in good financial condition.
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