Cheap-O Economics

If you think there is more month left at the end of the paycheck you are right.

2011-04-03T23:15:00.000-07:00

If you think there is more month left at the end of the paycheck you are right.

If you are starting to feel like you are working harder and have less to spend you are not alone. In fact wages have been flat, in some sectors of the economy even going down, while prices for food, gas, heating oil and other must have things is going up and up and up.

With 13.5 million americans out of work and the average workweek running just over 34 hours a week, that paycheck is not going to be getting larger anytime soon.

So what are your options?

Find a way to live on less. Yes it takes work but it is worth it in the long run.

First, work hard at getting out of debt and not taking on anymore debt. The less you have to pay in payments the more money there is left over for food and gas and to enjoy life. That may mean driving your car another year or two, rather then trading it in and buying a new one. It might mean downsizing your home to reduce your monthly payment. It will for sure mean putting away or better yet cutting up your credit cards and their 19.8% interest rates.

Second, adjust your expectations, No you do not need that new outfit, No you do not need a new LCD HD TV, No you do not need...well the list goes on and on. Find a way to do with out and you will need less money to live.

Third, change the way you shop for food, work out a menu and stick to it. Buy the food that is on sale, buy in bulk. Stop eating out, you can eat at home for a fraction of the price and eat better.

Fourth, don't go shopping, that is the best way to not spend money. It is in fact that simple, in you aren't in the store you won't be spending the money.

You can in fact beat the paycheck game, you just have to be playing it smart.

Cheap-O Economics

2011 - The Year Ahead

2011-01-15T22:43:00.000-08:00

2011 we are all wondering what the year ahead has in store for us. We look back over 2010 and some of us are better off then we were a year ago, for a lot that is not the case. So what does the year ahead hold in store for us.

That is the Zillion Dollar Question. I have been reading the predictions of the political pundits and the Economists from the Right, the Left, the Center and some that are so far out they are not even in the ballfield, The one thing I notice, not a one of them has a clue, oh don't get me wrong, they can show projections, and charts, case histories, trends, but when it comes down to it, they don't have a clue, Even the best guessers are making less then good guesses.

So are interest rates going up, YES, they can't go down any further or they will be paying people to borrow. So once you hit bottom no place to go but up. The question is not if rates are going up,, but HOW much are they going up by. For a lot of home owners a 2% increase in interest rates would be devastating, a 4% increase would wipe them out. But you say, rates can't go up that much or that high, OH yea they can and have, check out the 19% mortgages that we around in the 1990's and how people walked away from their homes after their payment doubled, tripled or even quadrupled. My uninformed dumb luck worst guess, an increase in mortgage rates of about 2% by end of 2011.

The value of the Dollar??? Well the Canadian Dollar is a par with the US buck, and likely to be worth more as the year progresses. The US Greenback will suffer against other major currencies, BUT that could all change if one or more of the EU countries have a major meltdown and the Euro takes a hit.

Cost of Food and Fuel. Well given that China added 25 Million new cars last year and will add that many again this year and that India now has Middle Class population of 350 Million (roughly the same as the total population of the USA), the competition for quality food and protein will increase, and with more and more cars on the roads in Asia, the cost to the consumer of Food and Fuel is going to likely keep raising. Add to that weird weather, snow in Florida, floods here there and everywhere, who can even guess at how crop land and food production is going to be effected.

So plan on spending more at the service station and at Safeway, But, stores will have great specials once people are buying less, they have to keep their product moving and there are going to be some deals to be had. But you need cash on hand to grab those deals.

On that note, if you happen to have some extra money just laying around, there are going to be some great deals as stores dump inventory, as businesses go down the drain, as homes remain unsold (in 2010 there were more then a Million homes foreclosed on in the US those have to be resold to someone.), as luxury items are sold off by people reducing their debt and lowering their payments.

Employment outlook. Well in the US it is going to stay at the 10%+ unemployment range, and the longer it stays there the more and more people that won't be able to find a job. If you are a grad from college and you don't find a job in a year, guess what, next years grads are now looking for the same job you are. Statistically, the longer you are out of a job the less likely you are to get a job. Now there are a few Bright spots out there. Western Canada (not counting BC) is healthy and Saskatchewan has lots of jobs available. The clean up in the Gulf is going to create jobs. Major urban areas of the US, well don't hold your breath.

Then of course what are the political leaders in Washington, London, Ottawa, Mexico City and the other capitals going to do? Mess things up, of course. Do the worst possible thing, of course. Make matters worse, for sure. The one thing political leaders and their advisers forget is that all the theory and all the great plans won't work if no one can figure them out, and people are going to do what is in their best interest.

My suggestion, the same as it has been for the past couple of years. REDUCE, Reduce your monthly cost of living, reduce your debt, pay everything off, spend less, buy less. Reduce your dependence on a job.

DO grow your own food or at least some part of it, DO stock up on food when it is on sale, DO evaluate if you really need that gym membership, cable TV, Cell phones for everyone, 2 or 3 cars, a house that big.

Don't spend money you don't have, Don't use your Credit Cards for everyday living expenses, Don't incur any more debt, put off buying that new car or truck and NO you do not need or have to have that new wide screen LCD HDTV, or that new IPhone or that new whiz bang toy, Don't pay other people to do things you can do.

Oh and by the way, I don't have a clue, anymore then the rest of the people making predictions, my best guess is bases solely on what I see out the window and from making up my own mind after perusing the vast array of options expressed out there, BUT I do know that having taken the steps we have I can ride out things a lot better then most people.

Happy New Year
Cheap-O Economics

Can You Make Your Payments?

2010-12-14T23:04:00.000-08:00

Recently there has been much talk among governments and economists about the household debt to disposable income level in both Canada and the USA. The latest numbers show that in the USA household debt is 147.2 per cent and in Canada it is slightly higher at 148.1 per cent. That means that for dollar earned the household is caring about a buck and a half of debt. So a 2 income family earning $65,000.00 a year would have debt of almost one hundred thousand dollars.

They go on to break this down saying it is not so bad when you look at good debt vs. bad debt, and when you look at what was purchased. One economist was pointing out that it is not so bad if you did not go out and buy speed boats or motorhomes but cars and house.

A lot of talk about how things are not so bad when you look at net worth which has been going up of late.

All those discussions are totally mute in my option. The only thing that matters is CAN YOU MAKE THE PAYMENTS? It doesn't matter if your net worth is high if you can't afford to make the payments.

The scary thing is a lot of people are right on the edge, they are making the payments but just barely. If anything was to happen to decrease income, like getting laid off or downsized or have to take a pay cut, or if the cost of debt / payments was to go up, then things would not be so good. The governor of the Bank of Canada recently warned that one of these days interest rates are going to be going up. They can't go any lower, and are only being kept this low to try to spar on business investment. His comments were “When the reckoning comes, it could be swift and brutal.”

So my advise, get out of debt and stay out of debt. Keep your payments as low as you can by not spending money on things you don't need and can't afford. With Christmas just around the corner it is extra critical that you keep an eye on what you spend.

Have a very Merry Christmas and a Happy New Year, but watch what you spend and put those credit cards away.

Cheap-O Economics.

Nothing Is Ever Simple

2010-11-29T14:39:00.000-08:00

There has been a lot of discussion lately about the 100 mile diet and shop locally. That to be environmentally responsible one has to buy there food from the surrounding area and save all that fuel and greenhouse gases from trucking produce thousands of miles from the grower to your stores shelves.

As usual nothing is as simple as it sounds. I recently listened to an analyst talking about the fact that over half the greenhouse gases and fuel used was not the usage of the trucks, planes or ships that were used to transport the products, but, rather it was the 5 and 6 miles traveled from home to the supermarket that used the fuel and added so much to the greenhouse gases.

Additionally the land use issues were in favor of growing products where it was best suited. For example wheat grows best in the “wheat belt” area of the prairies in Canada and the USA, were it would take 2 or 3 or 4 or more times as much land to grow the same amount in other places. Things like lettuce and strawberries ect take a fraction of the land in California to grow as they would in places like Vermont or Colorado.

All in all a very good argument for going ahead and buying without guilt the things that have been shipped halfway across the nation. BUT only if you peddle your bike to the store and leave the car at home (not going to happen here, this morning it was -27C or 14 below Zero F) and NO WAY am I not taking the car to the store.

Like I said nothing is ever simple.

However the buy local people do have a point. Take that package of hamburger that is sitting in my freezer. The cattlemen here in our area ship cattle just over a 600 KM (400 miles) to the slaughter house, from there it is shipped another 1000KM to the distribution center and warehouse, then shipped another 1000KM back to the store that is less then 20 miles from the cattle operation where the cow started its journey. I agree that in that case far better to get to know the rancher and the local meat cutter and enjoy that fine hamburger or steak. BUT like I said nothing is simple. If we all did that, then the truck driver would be out of a job, and hundreds of people at the packing plant would be out of a job, and 100s in the warehouse would be looking for a new job and the clerk at the store would get a lot less hours.

The point I want to make is less about how far things are shipped (and something only grow in the tropics or in the middle of the ocean, some things have to be shipped if we are going to enjoy them at all) but that we know where they come from, how they are grown and under what conditions are they being grown. This would be the spot where the Free Trade coffee people, and the Rain Forest Alliance people would put an Ad.

I strongly suggest that yes you support your local Farmers Market where you can buy the best locally grown produce right from the people that grew it, in season, but in January in Canada the lettuce comes from California or Texas as the gardens here are under a couple of feet of snow. Just like the Wheat used in that dish of pasta likely came from my neighbors field.

It is the lack of awareness of where produces come from and how they get to market that is my issue. When you hear people talking about milk, bread and hamburger like they are produced in a factory and not on a farm, that just shows how far removed people are from the reality of life. When it is traumatic for a child to learn that their running shoes are the hide of a cow. When there is no connection between where it was produced or grown and the end user, we have gotten to far removed.

Cheap-O Economics.

New Wind Generator Installed

2010-11-29T14:33:00.000-08:00

At the end of last winter we had a major blizzard with winds gusting over 100 MPH and my small wind generator was ripped apart and smashed. I then went all summer without a wind generator.

This fall I installed a new Malard 800 Watt low wind unit. This is designed to start in a fairly low wind but to handle the higher winds as well. So far so good. The folks at Mike's Wind Mill Shop (http://mikeswindmillshop.com) know what they are doing. I have also purchased inverters from them. They are great to deal with.

They say the blades have been tested to 0 degrees F, so far I have field tested the unit down to -27C or about 18 degrees F below zero. I am sure by the end of the winter we will have tested the blades to 40 below zero. Will keep you posted as to how the unit holds up in sub zero temps.

Having a wind generator sure changes the way you feel about wind. Now you enjoy the wind as it is putting power into the battery bank.

Cheap-O Economics

Credit Card - what not to do if you have one.

2010-10-27T11:46:00.000-07:00

Credit Card - What not to do if you have one. Do you really need one?

Recently Marcia Frellick, CreditCards.com wrote on Yahoo fiance about 15 times you should not use your Credit Card, you can view the complete article here It is important that all Credit Card users read this. However I want to highlight a couple that I think are extra important.

You should not be using your Credit Card, If you're paying off one card with another, and it's a habit. I have seen bumper stickers that say “What do you mean I can't pay off my MasterCard with my Visa Card” If that is your thinking it is time to step back and take a long hard look at your spending habits.

You should not be using your Credit Card, If you don't have a plan for paying it off this is something a lot of people do not take into consideration. NO thought is given to how to pay off the Credit Card bill for that impulse purchase of a wide screen TV.

You should not be using your Credit Card, If you're charging things that you used to pay cash for. This should set the alarm bells to ringing, This is a sure sign that there are some issues that need to be looked at closely. This would include groceries even if you are getting reward points or even 2% cash back.

These are just three of his 15 times not to use a Credit Card. I would add to his list.

If you are just making the minimum payments on your Credit Card then it is time to put it away and not run up anymore debt. As it is it is going to take you years and years to pay off that Credit Card debt and cost several times what your original debt was.

Credit Card debt is unsecured debt, meaning that you can not sell an item to pay it off. With secured debt you can sell the item. like a house or car, and pay it off. You can not sell that restaurant meal you just eat, to pay it off, you can not sell that clothing or shoes and pay off the debt. Credit Card debt is bad debt with high interest.

I have heard all the reasons to have a Credit Card, for emergencies - I saw a sign in a business the other day that said “a lack of planning on your part, does NOT constitute an emergency on our part” the same can be said about a lot of so called emergencies, the car needs tires every 80k miles, so plan for that. The car is going to need repairs, so build that into your budget ahead of time rather then pay off the Credit Card after the fact.

For convenience, use a debit card rather then a Credit Card and when you run out of money stop spending, It is really amazing how simple that is.

There are just some things you have to have a Credit Card. - That is very true, but maybe a hard look at life style choices is needed at this point. I know you can not rent a car with out a Credit Card, but I have not needed to rent a car in the last 20 years so that is a pretty mute issue.

You have to have a Credit Card to reserve a motel room. That is can true and as well I have run across motels that won't even register you without a Credit Card, but you know what, the motel across the street will be glad to take your debit card, and yes I do have to give a deposit sometimes, but I can get by without the Credit Card,

It is possible to manage without a Credit Card, and if you can't keep a handle on your Credit Card usage then you might need to go to straight cash for a while. This is especially relevant with Christmas season just around the corner. You can't spend what you don't have if you are not carrying a Credit Card in your wallet.

Cheap-O Economics

Interesting trends

2010-09-27T22:56:00.000-07:00

Some interesting trends I am noticing out there.

The first is a survey by the Canadian Payroll Assoc. who are telling us that 60 percent of people would be in “Financial Difficulties” if their paycheck was just one week late, as well as 40 percent of people have given up even trying to save any money for emergency or retirement.

The second thing I noticed was an advertisement from a Wealth Management Company that was hosting a seminar on “Protecting Your Wealth”. Not on growing your wealth or the newest hot stock tip, but on keeping what you have.

An article on unemployment* showed that as of late last year, the average duration of unemployment surpassed six months, the first time that has happened since 1948, when the Bureau of Labor Statistics began tracking that number.

For every job opening in the U.S., six people are actively looking for work. That systemic unemployment is going to be a fact of life in a lot of geographic areas as well as within some industries.

Most recessions end when consumers regain confidence in the economy and start spending again, but for the foreseeable future, U.S. consumer demand is unlikely to propel strong economic growth. As of November, one in seven mortgages was delinquent, up from one in 10 a year earlier. Heavy debt and large losses of wealth have forced consumers to curtail their spending and to delay if not forgo large purchases.

These trends really show that while the “Experts” are saying that the recession is over, on the streets of the country the recession is in a lot of ways far from over. There are some permanent changes to the way companies will hire employees, and the lose of wealth and retirement income has forced many people that were hoping to retire back into the workplace to compete for the available jobs.

Now is a good time to step back and take a good hard look at your financial situation and see where you stand. Can you survive if were to lose your job? Do you have skills that employers will want? Is your pantry full so you can eat while looking for work? How deep in debt are you? Are your credit cards already maxed out, are you currently using credit cards to meet day to day expenses? Is your car paid for?

Time to maybe make some changes in your lifestyle so you are better prepared to face a financial challenge. Can you trade down on your car and cut your payments in half? Can you walk to work and not need a car? Can you take public transit rather then have a car?

Each and everyone of us needs to reass where we are financially, and realise that your job may not be as secure as you think. Interest rates are not always going to be this low, are you prepared for a jump in the cost of your debt? Do you have a plan B or C or D so you can deal with life in the post recession still no jobs world?

This is not the time to panic, but it is the time to pay attention and decide what you can do now to help yourself later.

Cheap-0 Economics
*http://www.theatlantic.com/doc/201003/jobless-america-future
This is an excellent read that goes into great detail about the impact of unemployment

And I thought I was a Cheap-o

2010-08-28T22:35:00.000-07:00

I pride myself on being a cheap-O, I am always on the look out for the best deal and things I can pick up for free. This last month I have gotten a piano for free, and then had to learn to tune it, as I was to cheap to pay to have it done. Then picked up a bunch of soap making supplies from some people that were moving, all I had to do was haul the stuff away.

But I was reading the news and discovered that I have a lot to learn about living without money. In a recent article on Yahoo News I read about a man that has lived for a year with NO MONEY at all. .

Michael Bolen
Yahoo! Canada News

If a serious person puts their money where their mouth is then Mark Boyle is the world's most serious man.

Inspired by Gandhi's famous words to be the change you wish to see in the world, the economics graduate from the U.K. has been living entirely without money since 2008.

He has written a book about the experience titled 'The Moneyless Man: A Year of Freeconomic Living' in order to share both the philosophy which led to his drastic decision and the tactics he has used to survive.

Living in a trailer given to him for free by someone on freecycle.org, Boyle cooks food which he either grows himself, barters for or forages from the land. He bathes in a solar shower, uses a compost toilet and even makes his own paper.

Despite his challenging lifestyle, Boyle has no plans to return to civilzation. He says the time he has spent away from money has been the happiest of his life.

That just goes to show that a person can make difficult choices and take control of their money or lack of money. I have a long ways to go to be in Marks league but every step I take in the right direction is a step closer.

Cheap-O Economics

The Great Advantage of Having NO Money

2010-05-08T22:55:00.000-07:00

The Great Advantage of Having NO Money

I know it seems weird to think of not having money to be an advantage, but it is in fact one of the biggest advantages that a person can have.

When you don't have money, it expands your horizons, as you have to find other ways to get things done. You learn to make do with what you have, you learn to improvise, you learn that time and talent can make up for lack of money, you learn to do it yourself rather then pay someone to do it for you.

The biggest advantage of not having money, is that money never is part of the decision making process. If you don;t have money then the lack of money is never a reason to decide not to do something or not to under take a task. It just means you have to be inventive and find a way.

Over the years we have done things anyway, money or no money. In fact my first business was started when the total family bank account had less then $200.00 dollars in it. I just had to find the right people (a guy that was retiring and who just wanted to get rid of his inventory and who didn't need money, just needed to get out on the golf course.) the right situation (a landlord who so badly wanted to get some one to rent his building that he made me an unbelievable deal - mind you his building had been empty for 2 years so he was very open to being supportive.)

The best part about not having a ton of money. It is so much more fun to find other ways to get a project done. So much more fun to hunt for and find that special treasure and find it at a bargain price or even better find it for free.

So when you are thinking about starting a business or buying a house or a car or undertaking a project, Don't let the lack of money stop you before you have gotten started. If the deal or the project makes sense and is something that you really want to do or that is going to benifit you and others then, stand back and think of all the ways you could get it done without money. Maybe you can trade your talents for work you need done. Maybe you can sell something you own and buy what you need. Perhaps if you ask around you can find it for free.

The list of things I have gotten for free, just for the asking or for the hauling away would run into pages and pages. The treasures that I have found at yard sales, thrift stores, and auctions would be even longer. The work I have done for other people who in turn did work for me would make interesting reading.

The bottom line, money is no object. Just that unlike the man at the Rolls Royce dealerships it is the lack of money that makes it no object, Not the over abundance of money that makes it no object.

Cheap-O Economics

When Good News is really Not Good

2010-03-03T14:34:00.000-08:00

When Good News is really Not Good

I was reading the headlines, some business articles and just had to shake my head. Since when is Bad News good? The news on the economy sounds like the Doctor that tells you how lucky you are that you only broke 4 bones, not the 8 or 10 bones they normally see in that kind of a crash.

This is the Headline U.S. layoffs fall in February
This is what it says in the body of the article.

A widely watched measure of U.S. employment came up positive Wednesday.

Outplacement consultants Challenger, Gray & Christmas announced that planned layoffs for private businesses in the U.S. fell 41 per cent in February compared with the month before to 42,090, their lowest level since July 2006.

In another employment report, ADP, a major payroll processing company, said that the U.S. private sector shed 20,000 positions during February, which was in line with expectations. It was a drop from 60,000 in January.

Last month, the Labour Department reported that the January unemployment rate in the U.S. was 9.7 per cent.

Now call me funny but planned layoffs of 42,090 people doesn't sound all that positive to me, and that is the lowest monthly layoff number since July 2006, lets see 5 months in 2006 and 12 months in 2007, 2008, 2009, and Jan of 2010, so all together that is 42 months all being higher layoffs then the 42,000 in Feb of this year. Even just using the 42K number that works out to be 1,764,000 people have been laid-off since July 2006 and that is on the way low side.

So where is the good news in that? Oh yes. that is right it could have been worse.

Now good news would have had a headline like “Jobless rate drops to 5% and private business adds 40000 new jobs in Feb.” Now to me that would be good news.

So the plan should be to pay off all your debts, stay out of debt, plan for the day that you are one of the lucky FEW that lose your job, be very careful about spending on anything that isn't necessary, and stock up the pantry. (P.S. - a new larger plasma HDTV is not a nessesity!)

We may be slowing down on how fast we fall off the edge of the economic cliff, but we are still falling, and it is going to be a long, long climb to get even part way back.

Don't just read the headlines, read the article. Don't just read the article, examine it. Don't just examine it, understand what it is talking about and do you own math and then read other articles.

Cheap-o Economics

Pollyanna Economics

2010-02-09T22:05:00.000-08:00

Pollyanna Economics
Everyday in Every way Things are Getting Better and Better - NOT!

After the melt down of 2009 I am amazed to read and to hear on TV that the economic recovery while slow in getting here is right around the corner and that by the second quarter of the year we will be sitting pretty and will all be driving brand new cars. That everything is just peachy. That like Pollyanna things are just getting better and better.

Well folks, it is time to take off the rose colored glasses and that a long cold hard look at reality. Yea I know reality bites, but it is reality and far better to be prepared then to blindly stumble into collective poverty.

Fact one. The patient (The Economy) is on life support, if not dead, it just doesn't know it yet. All that is holding things together is smoke, mirrors, compounding debt and creative accounting. That and the desire of most people to believe that all is well and that someone, somewhere has things well in hand.

The unemployment rate is at an all time high despite billions of dollars being spent on job stimulus. The number of home loans in default, range up to 25% (mortgages from 2007 are 24% in default and 2008 loan are 20% in default the FHA reported) and most loans are technology in default as the underlying value of the property is no longer able to support the mortgage.

Did I mention that no one is in control and the ones we think should be, Presidents, Prime Ministers, Finance Ministers and the heads of the Central Banks of the Major Nations, are as clueless as anyone else. It is a case of - as long as we all believe that the bubble won't bust then it won't bust, but like the little boy in “The Emperor's New Clothes”, someone is going to point out that, BUBBLE what Bubble, and it will all come crashing down.

Fact Two. The only person that can look after you is you. Repeatedly FEMA, the National Guard, Local and State / Provincial, and Federal Governments have shown that they are helpless in the face of Disaster, natural or man made. So we need to look back a couple of generations and see how our forefathers managed to survive with no phone, no power, no TV, no interstate highway system, no car. They can show us how to cope with life with no modern conveniences and ways to get things done without electricity..

Fact Three. The only real assets you have is your knowledge and the ground you can use to grow food. Everything else is only of value if you can con someone else into buying it. In economics this is known as “The Greater Fool Theory”

The best things you can do for yourself is learn a new skill, and that doesn't mean mastering a new video game, I am talking about learning to weave, or blacksmith, welding, how to build a house, auto mechanics, gardening, skills that you will need to survive and prosper in the new economy.

It comes down to being prepared for and ready to take on the challenge of a life after the bubble bursts.

Cheap-O Economics

What Does 2010 Have In Store For Us?

2009-12-30T22:23:00.000-08:00

At this time of year, one always takes a moment to look back at the year in review, so we can see where we have come from, what we have accomplished, and were we are likely to be headed.

On a personal note we have moved several steps closer to our goal of going off-grid, and each step has shown us that it is possible, and that we can make the adjustments that will make the possibility a reality. With some good planning and some diligence 2010 should be the year that we race for the main breaker and pull the plug on the power company.

But it is more then that. It is the whole process of discovering that we can get by on less, that we don't have to earn the mega income, that life can be simpler, and we can have more control over what we do, when we do it, and where our food comes from. Those are the composites that work together to make being self-reliant a realistic option.

The year 2009 has been a year of ups and downs. We have witnessed the near collapse of the US banking system, seen major companies hover on the brink, be forced to merge and have to fly to Washington and Ottawa for bail-outs. People have seen the value of their homes and pensions nearly wiped out. We have seen the weirdest weather, seen gas race up to $1.50 liter and then drop to 90 cents a liter, and watched as governments from around the world can not agree on anything.

Each of us will have to take out their own score card to see how you fared in 2009. Regardless of how that looks, we need to look long and hard at what is likely coming in 2010. Depending on where you live and what kind of work you do, even that can vary drastically.

Looking at the large picture, there will be continued recovery in the US and Canadian economy's, BUT almost every expert agrees that it will be a recovery that will not see much if any growth in the job market. The jobless rate will stay near record high, and wages will fail to keep pace with inflation.

As the recovery starts to take hold, we will see a increase in the price of gas, that coupled together with the lack of easy to get to and cheap gas will see the price of gas works its way up to the $2.00 liter area. At that price there will be people that will not be able to afford to drive, so they will end up parking their cars or defaulting on their car loans. Some have suggested that at that price for gas, upwards of 20% of car owners will abandon their cars. It will mean that the long commute will be getting less and less feasible.

Presently interest rates are at an all time low. Which has resulted in people over buying when they purchase a home. The Governor of the Bank of Canada has warned that interest rates will have to go up and that will see some people having to make much larger house payments then they are prepared for. Additionally He has stated that the biggest threat to the Canadian economy is the very high level of household debt. The debt level in the US is at or near the same level and holds the same threat for the US economy as it does it Canada.

Governments and individuals will not be able to spend their way to a recovery, despite what some “rose color glasses” wearing economists have suggested. To many people are to deep in debt for the “buy now pay late” to work. If interest rates go up even a little, the recovery could stall. I am afraid that the optimistic outlook, has overlooking the fact that discretionary spending dollars are at an all time low and about to get even lower.

What does all that mean for you and me? Well as a Cheap-O we already taking steps to pay down debt and to make sure that cars and homes are paid for or paid off as soon as possible, to eliminate the use of credit cards or at least see that they are paid off monthly. I have spent some time evaluating my work situation, and while my employment looks secure at this point, there are real reasons to look at self-employment, or the possibility of other work should things change. We have been working hard to reduce our cost of living to the point that if and when push comes to shove we can survive on one minimum wage job. That in its self helps a persons stress level stay in the safe range. We are also working on a back up plan and a back up plan for that. Call them plan B, plan C, D, E and so on.

We are making sure the pantry and freezer are full, working toward having a 6 month supply of food on hand. We are working hard to decrease the amount of driving we do by combining trips to town, coordinating with neighbors so that when someone does to town they can pick up thing for the rest of us and or the other way around, having supplies on hand so we don't have to just run to town for this or that.

We continue to find ways to reduce the ongoing monthly cost of living, we have cut back on some telephone calling features and got rid of the long distance plan this lowered our phone bill over $40 a month. We are working hard at getting the power bill way way down, the tale will be in February when we get our annualized billing, that will tell us how effective we have been, and let us know how much harder we have to work at trimming our power consumption.

More then anything we are ready for just about anything the Government or the market place can throw at us. Generations of our ancestors faced adversity that we can only imagine, they would think that we have it easy, and wonder why we are worried. But then, for some people it is a major disaster when the cell phone battery goes dead, I guess they might be right that we don't know anything about real hardship.

We can all take a lesson from our parents, grandparents, and their parents, that every challenge presents an opportunity, and that like them we can get through. They dealt with world wars, the great depression, and things we have only read about. So this bit of a bump on the road should not give us that much trouble.

As we head into 2010 lets take the opportunity for each of us to get closer to our goals.

Cheap-O Economics

Merry Chrstmas and Happy New Year

2009-12-23T22:10:00.000-08:00

I want to wish everyone a very Merry Christmas and A Happy New Year.

As we wind down 2009 and look forward to 2010, we all need to take a moment and thing about where we are headed and what we can do to take steps to best look after ourselves no matter what the economy throws at us.

Take care over the holidays and enjoy your time with family and friends.

Cheap-O Economics

Can Your Wallet Survive Christmas?

2009-11-18T17:44:00.000-08:00

Christmas is that time of year when the sound of Christmas carols is mixed with the beeping of cash registers. When Visa and MasterCard are processing hundreds of transactions a second, every second of every minute all through the Christmas season. When 60% of the years retail sales take place. Where every business is after your money with commercials showing cars gift wrapped and furniture that you can pay for 15 months from now, and the latest “hot item” that everyone has to have.

What can you do to protect your wallet?

First, put away your credit cards. Decide on how much you are prepared to spend and then use Cash or your debit card so you do not spend more then you planned. Don't forget that wrapping paper and postage are part of the cost of Christmas, so make sure you take that into consideration.

Next, rethink your gift giving. It really is true that the thought is what counts, often a small box of candy is as meaningful as a expensive “not sure what to get” gift. You should take a look at your gift list, you can suggest that the family and work draw names and set price limits for giving. It is great fun to hunt for the perfect 10 dollar gift.

You can keep a handle on your spending. It is possible to have Christmas without Tickle Me Elmo or 42 inch LCD HD TV or Xbox 360 or what ever the “have to have” gift is this year. NO your kids physic will not be damaged if they don't get everything on their wish list.

Shop early so you avoid the heavy weight Christmas marketing action. One of the best ways to not spend money during the holiday season - Don't go to the mall! Pick a time for doing your Christmas shopping and then make an effort to stay away from the stores after that. We are finding more and more that we can pick up just that perfect gift for that special someone during the year and tuck it away until Christmas.

Mostly remember that the Joy of Christmas is not buy, buy, buy. The Joy of Christmas is time spent with family and friends. The cherished moments of a new grandchild's first Christmas, where the wrapping paper is more fun then the toys. The time spent putting up the Christmas tree and getting those lights just right. Then hot chocolate and Christmas carols as you watch the lights shimmer.

This year enjoy Christmas without fainting when you open the January credit card bill.

Cheap-o Economics

That is Cheap-O, not cheapskate

2009-10-14T22:54:00.000-07:00

Yesterday I was listening to the radio. Charles Adler the radio talk show host was interviewing a guest and talking about cheapskates. I have to admit I had a pretty good laugh about some of the silly things we heard that the cheapskates did.

Today I want to clarify something. I am a Cheap-O, I am NOT a cheapskate.

My definition of a Cheap-O, is someone that is reserved and controlled in how they spend money. Who expects and gets full value out of every dollar. Who finds uses for what would otherwise be discarded items. Someone who lives in a sustainable way. Someone that knows that they, not the government are the best one to make the choices about their life and how they live. Make sure you read my article on "Being Cheap is Greener then Being Green."

I am the one laughing, as a Cheap-O I have money left over to give to charity. I can cut back on the hours I have to work to make ends meet. I can keep my money to speed on things that bring me satisfaction, as I am not speeding it on trivial things. I find pleasure in doing things for myself. In learning new skills, and in spending time doing the things I want to be doing and watching our grandkids grow up.

Don't ever confuse being a Cheap-O with a cheapskate. We are not cut from the same cloth.

Cheap-O Economics

Turn It Off

2009-10-14T00:01:00.000-07:00

Turn it Off.

Yes that is one of the best ways to save money. Turn the lights off when you are not using them. Turn off the TV if you are not watching it. Turn off the computer at night, you can actually damage the batteries on your lap top if you leave it plugged in all the time, as it is in charge mode when plugged in.

Don't just turn off the TV. unplug it or at least use a powerbar so you can totaly shut it off. It will use up to 85% of the power when turned off (it is really in standby mode not shut off) as it does when turned on. The same goes for the VCR / DVD / CD player, you have unplug them to fully shut them off.

When I visit friends I am amazed to walk through the house and find lights, radios, tvs, and a host of other electronic items turned on ....and no one around useing them. My grandkids seem to think that you have to have the light on in the bathroom - in the middle of the afternoon. You can manage very nicely without the lights on when the sun is shining and it is daylight.

I wince when I see houses with all the outside lights on, and lights on in every room of the house.

As a society we take electricity for granted and only think about the cost once a month when we pay the power bill. Well our local power company has announced that in order to meet increased demand and the capital cost of replacing old equiptment and upgrading infastructor, the cost of power is going to more then DOUBLE over the next ten years.

It is time to really take a serious look at how you are using power, the ways you can cut back on the amount of power you use.

Things you can do to decrease your power usage.

Turn off the lights
Use Compact bulbs Fluorescent or LED lights
Use timers or motion detectors on outside lights
Use power bars to totally turn off TV, DVD, CD, microwave, and other electronics
Do you really need that many TVs?
Eat by candle light
Set your hot water tank temp lower
If you are buying new appliances look for Energy Star ones that use the least power
Turn the heat in your house down a couple of degrees

Everything will add up as savings for you.

Cheap-O Economics

Welcome to Cheap-O Economics

2009-10-03T21:49:00.000-07:00

Welcome to the Cheap-O Economics Blog

I am hoping that I will be able to provide a contrary and thought provoking look at money and how you earn it, how you spend it and what you save, invest and how you plan for retirement.

I have always looked at all these issues from many different angles. But it wasn't until I started to write articles for www.homestead.org that I formalized my thoughts. Out of the original article I have written several others relating to how to be a Cheap-O.

I am hopeing to provide some ideas for some homegrown, practical, cut to the chase, try to make sense, ways to become a cheap-o.

Often the ideas and the approach will run contrary to conventional wisdom. I hope that more then anything else I will challenge you to reexamine your ideas, and that you will question the experts and really take the time and effort to find out how it applies in your case.

Not everything I suggest or observe will apply to you. But take the time to read on. You may be surprised that you may start to think twice or three times about your spending choices or how and if you invest. You may find that you are questioning your friends and offering ideas that might be a bit off the wall to them.

If that is the case welcome to the club. The club of people that think for themselves and who look behind the headlines for the underlying story. People that make their choices based on what is important to their family and what works for them. People that are not the sheep, but who are the sheep dog. People who believe that you need to depend on yourself not on the government to look after you. People who are getting prepared for and capable of dealing with what ever life or mother nature throws at them. People that are returning to the idea of living sustainable and that happiness lays not in more things but in spending your time doing what you want.

I hope you will visit here often and that I can challenge you to think about how you think.

Jan R. Cooke
Cheap-O Economics