By Ron Dorner
You have experienced a winter with record utility bills and are now seeing gasoline prices a dollar higher than last year. Perhaps you have stretched your budget dollars to the point where they have snapped. “What to do next?” is the question.
First realize that higher utility bills and gasoline are with us to stay. This means each of us will need to make adjustments. Basically, each family will need to “find” $20 to $60 more per week for utilities and gasoline.
I urge you to take the conventional actions such as conservation, insulation, trip planning, etc. But for some, still more will be needed.
Your success in handling higher prices for utilities and gasoline will depend upon how you look at your situation. Stand back and review. What you will find if you are objective is that government is not acting responsibly (graft, corruption, self-interest, incorrect data, reckless spending, lack of desire to do good long-term planning).
We must act responsibly and take control of our personal finances and be very conservative. Real inflation currently is about 9.4 percent per year (the government says it is around 3 percent) which exceeds most increases in income; hence your income is shrinking.
Once you see the big picture you will see the seriousness of the issue. Secure income, wise spending, and an emergency nest egg should be primary goals.
If you cannot increase your income, the cost of higher utilities and gasoline must come by spending less on other things. Here are some ideas to help.
Would you like to buy $2.85 per gallon gas for $2.71 per gallon and sometimes have free money to spend on gas? If you use credit cards and pay your balance each month, this tip will work for you. Get a credit card which gives 5 percent off on gasoline and gives you 1 percent on all purchases as a cash rebate. The more you use the card, the more free, discounted gasoline you get. I get about $120 per year of free gasoline in addition to the 5 percent discount on all gasoline purchased.
Analyze what you pay for phone usage. New technology, competition, and conservative usage can save you hundreds of dollars per year. I pay three cents per minute and no monthly fees for all long distance and have cell phone use (limited) for $7 per month. Shop, shop and shop and you will save.
One way to cut spending is to avoid buying on credit terms (borrowing against future earnings when you have no way of knowing if they will be there). If you think buying an “economical” car on credit will help solve your gasoline cost problems, it won’t. Take the time to evaluate cost of credit, depreciation, increased insurance, etc.
The Apostle Paul said, “I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me.” (Philippians 4:12,13)
Realize that within the foreseeable future, inflation and higher living expenses will be challenging. There is no better time than now to start making necessary changes.
Ronald Dorner is director of Biblical Money Management. BMM has been helping believers handle their finances and estate planning biblically since 1984. On-line counseling is available at www.BiblicalMoneyManagement.com.