[NTBKtrader]

My bank account isn't where I'd like it to be as I'm sure most people feel that way. I feel if the economy goes down and inflation up I will have to cut back on certain items. I have been a consuming 'junky' all my life so I've never had to cut back much and that will be a new experience for my wife and I. I was wondering if there was a list of what items people typically let go of first when the economy downturns. That way I can compare it to my list and see if mine makes sense or if cutting out certain things versus others is wiser. I realize that everyone's spending habbits are different for varying reasons but I am sure you can average out or use the middle class as a good starting point to make a list. Does anyone know of such a list? If not lets try and make one. Or is it a waste of time? Thoughts?

[mekrob]

I'm just a kid (19), so I wouldn't have the best idea for an adult or a family. But since I don't have a job anymore, I basically cut everything out: movies, games, CD's, eating out (except special occasions), new clothes, etc.

If I had to guess, movies and eating out would be big ones. Car washes or even washing it yourself (idiotic in my opinion anyway), buying books (just go to the library if possible), junk food, lots of food, more expensive food are a few others that would be on that list. Depending upon your lifestyle, cable and phone could definately be variable. Those would be two things I'd get rid of quickly. You'd have a hard time taking away my laptop though and internet.

For me, it'd be everything except food, electric, housing, soap, shampoo, laundry, water, and gas if no public transport is available.

[rwwff]

A lot of our economic activity is simply trading time for money. Joe gives some time to John, and John gives some money to Joe. Joe gives some money to Jeff who hands him cooked,ready to eat food in a throw away paper wrapper.

To reduce cost, you can sacrifice the time saved with fast food dinner in the car, and use that time to cook a loaf of bread and a stewed chicken. By doing it yourself, you do get more and better food, but you lose an hour to two hours cooking and cleaning.

Or, you can work more (hours, product, whatever) and use some of that money to "buy" even more time. Pizza delivered to your workstation, taxi to take the kids to soccer.

Problem is, I suspect that, at least for Americans, we've already pushed the "work more" button as many times as we can get away with; so maybe the next step really will be finding ways to keep our productivity at the current levels while simultaneously figuring out how to bake a loaf of bread and stew a chicken.

Sample things to axe that would fit this model.
- Restraunt food.
- prepackaged grocery store mixes (salad bags, pancake mix?!?!?!?!?)
- replacement gas powered equipment for yard and home use
- gym memberships and social clubs
- car maintenance and replacement
--- drive it till it dies, then switch to bike, scooter, bus, whatever
- yard service crews

Luxuries that could also be sacrificed
- cable/satellite subscription TV
- multiple phone/data lines
- movies
- bars and dance clubs
- consumer trash
- cold AC, warm heat
- water for lawns

[MonteQuest]

$this->bbcode_second_pass_quote('NTBKtrader', ' ') Does anyone know of such a list? If not lets try and make one. Or is it a waste of time? Thoughts?

[pup55]

I'm surprised no one mentioned smoking. Despite the fact that it is deadly for you and the people around you, 20% of adults still stupidly continue to do it. I also believe that there is a correlation between tobacco use and education/lack of, in which it is pretty obvious to anybody who can read the warning labels that the stuff will kill you. Also, in addition to being lethal, it is expensive. It will be interesting to see which addiction is stronger: smoking or driving.

Lung Association

Secondly, insurance. This has already happened at my house. I took collision off of all of my cars and thus lowered my insurance payments to liability only, with big deductibles. This has cut my insurance bill by probably 40%. Auto insurance is a scam anyway, because they do everything in their power to not pay the accident victims, and also, because the insurance lobby is strong enough to get laws passed to make their products mandatory for all drivers.

I would expect the rates to start to skyrocket to make up for good drivers like me cutting back on insurance and leaving the system to the people who wreck frequently.

Life insurance is another thing. This has already happened at my house too. Not much point in paying however many hundred per month in case of the very slight possibility that you will suddenly kick the bucket, if you can use the money elsewhere. Also, your insurance is only as good as the company that writes the policy, and there is some question as to how long these guys can stay in business without a steady supply of new customers/suckers coming into the system.

Thirdly, kid pampering: Examples: expensive birthday parties, trips to Rat World, driving them around for activities, excessive spending on toys, etc. Certain people will cut out their kids Karate lesson so that they will be able to keep driving the SUV and/or not have to quit smoking.

Fourthly, magazines and newspapers. I think we still get Cosmo and Glamour at our house, but I can see cutting back on hard copies of daily newspapers and nonessential magazines. You can get most of the content for free on the web, plus not have to deal with the resultant solid waste. Bad news for the already weak newspaper business.

I would be interested to hear any ideas about cutting back on cosmetics (mainly used to make females more attractive). This stuff is really expensive, and for many females, is marginally useful. A substantial part of the sales of many retail places such as Walgreens is the cosmetics section, which takes up half the store. Also, the phenomenon of having your "nails done" is pretty popular in my area, where you can find a nail place in every strip shop. I am thinking the usefulness of having beautiful nails, if it ever existed, will go out the door when more of these hands are engaged in useful work.

Also, I would be interested to hear any ideas about cutting down on golf. In addition to the expense of course maintenance, etc, this is the male equivalent of cosmetics, and a major budget item for some people. Where I am it costs on the order of $85 per round on some of the local highbrow courses, plus you can spend an unlimited amount of money on this activity (equipment, clothes, lessons, etc.). So, pretty easy to spend $1K per year if you golf fairly frequently.

[Ludi]

What ideas do you need about cutting back on cosmetics? "Don't use them" is the only idea one really needs.

[hippiegunlover]

I've already dropped some thins that weren't needed, but didn't impact me too much, like the "farm insurance" on our truck. The policy cost more than the truck was worth, and I've only driven it on the road twice...

Make up, nails done & hair cuts? People really spend money on that? Get a good pair of scissors and figure it out. Soap and water is all your face and nails need. My family hasn't been out to eat in months, unless you count vending machines at rest areas. I did splurge and take the kids out for ice cream last week, less than $10 for all of us.

The next thing to go at my house will be high speed internet. It's great and I love it, but I don't need it. We are getting close to this point now. Next will be sat. tv. This bites because I'm surrounded by hills and can't get anything via antennea, so it will be no tv (we get no radio stations either)

rrwwf, car maintenance is a hard one to give up. I had to spend $76 yesterday for a new battery. Without it the car is useless. No car means no work around here. Oh, and WV actually fines you if you don't have trash service, or reciepts from the dump, so we can't get rid of that bill either. (no truck to go to the dump b/c the ins)

[OilyMon]

I am an educated smoker!

I've been fighting my girlfriend on the cable issue for sometime now. I think I'm about to smash the TV - not becasue we can't afford it, but becasue it's such a waste of my precious time. I watch it if it's here, and then I get into the programming, and then I get suckered in to the flashing coloured pictures..... I rather just cold turkey it right now.....

A/C is a necessity after what we've been doing to the landscape in our city, not to meention Global Warming. Without it I probably would have died of heat exhaustion during that last north eastern heat wave. It wouldn't have been so bad if I could've taken a dip in Lake Ontario.....

I think one of the most productive thing for everybody to cut out would be driving. I'm suprised that nobody mentioned eliminating it altogether and going to a centralized transportation system with rail and diesel buses. Despite the fact that it is extremely expensive on a variety of levels, dangerous to you and your family and everybody else on the road, destructive of eco-systems, cost taxpayers trillions of dollars in road maintenance and ancilliary expenses over 80% of adults still continue to do it! I also believe there is a correlation between pick-up truck and muscle car driving and education / lack thereof, in which it's pretty obvious to anybody who can interpret statistics and extrapolate facts.

As pup mentions, ancillary costs are insane - insurance, gas, maintenance etc. If instead of driving all the money that people spend on cars went to a centralized transportation system, hw much money would be pooled to builde transporation infrastructure. Or is driving an inalienable right???

[WildRose]

Since we mentioned cutting out smoking in this list, I guess cutting out alcohol would be an important measure to save money also. A lot of disposable income disappears in drinks in restaurants, clubs, even in people's homes every month. In our home, it is the odd time when we buy a bottle of wine or a dozen beer, usually when we have company over. We have eliminated drinking when we go out almost completely.

As our disposable income has been trickling away (and as I'm sure it will continue to do so in the future), these are some of the ways we've dealt with it (family of 5, 3 teenagers):

- engage in more family outings that involve walking, biking, fishing, sports that don't cost much.

- only very occasional drives to other towns, cities

- driving less in the city we live in by consolidating errands, etc. (last couple of weeks I've used only 1/2 tank of gas in my Honda, including all social driving and work - although that was quite exceptional)

- eating out, movies, places that have "admission prices" - we use coupons, go in the afternoons (cheaper prices) , special admission days, however we can get the best deal

- grocery bill - get all the basics, but cut way back on expensive meats and prepared foods, get cheaper brands of cleaning/hygiene/ paper products, take advantage of sales as much as possible

- other purchases - clothes are usually bought new, but other stuff, like furniture, miscellaneous things that need replacing, we buy second-hand through "bargain finder" publications, sometimes garage sales, next-to-new stores. It all helps!

- gifts and special occasions - this is a big one for us - we are starting to get quite creative. We used to be big spenders in this area and realized we could trim this spending a lot.

- repairs/upkeep around the home - trying to do as much as we can ourselves, and look to trade services with friends and neighbors.

Guess that's about it!

[mekrob]

If you are really desperate for cutting down, and every dollar (or dime) counts, so how about gum and breath mints? You won't save a lot, but every penny counts, no?

[Tyler_JC]

$this->bbcode_second_pass_quote('mekrob', 'I')f you are really desperate for cutting down, and every dollar (or dime) counts, so how about gum and breath mints? You won't save a lot, but every penny counts, no?

[pup55]

$this->bbcode_second_pass_quote('', 'c')utting out alcohol

[RonMN]

I've considered the expense of smoking...so I decided to try my hand at GROWING tobacco

I have 17 turkish tobacco plants growing in my garden & i can't wait to try some at the end of the season. Granted, I know nothing about growing/curing or blending tobacco...but i guess ya gotta start somewhere.

[Waterthrush]

Interesting that so many felt that cosmetics were dispensible. I'm not necessarily disagreeing with you, but cosmetics are one of the very earliest comsumer goods, and one of the most durablely demanded. I remember being astonished at an NPR story about the Avon lady in the Amazon jungle, traveling by boat, and having a huge demand for her wares! Go figure.

A lot of the brand name lotions and potions can be replaced with cheaper alternatives, though. You have to experiment. I recently found a no-name brand of hand lotion that I really liked.

I think phone service can be drastically cut back for most people. Do you really need to call someone to tell them that you have started home? Do you really need to call someone to tell them the supermarket is out of the 8 oz size of something? Do you even really need to call someone to tell them you are stuck in traffic? Didn't people manage without this level of communication before? And, one can manage without caller id, call waiting, call forwarding, etc.

Bottled water. I hate seeing people spend money for bottled water - we need public water systems that provide good water, not bottled water. But it's almost become a sign of the middle class. If you don't drink it, you are considered poor. I don't drink it. And, I'm sick of hearing how people drink it "for the taste." No, they drink it because advertisers made them think they needed to drink it. Again, everyone managed in their childhood without it. Fill up a water bottle at home!

I agree about saving money on child-spending. Really, a baby needs t-shirts and diapers and 1 or 2 cute outfits, and that's plenty.

[MrBill]

Of course at the top of my list is to drive less. I can walk or bike to work. But also not to buy any new cars. I cannot afford the depreciation nevermind the insurance.

I get most of my information for free over the Internet, so that is important to me, but I would not cut my subscription to The Economists. That is good value for money.

Also, you can exercise for free at home - running, walking, sit-ups, push-ups, etc, - but if you do not have the discipline, I would not give up my fitness club membership where I have access to the various machines and the swimming pool. Daily exercise is just too important to skimp there. Weight gain and lethargy as well as illnesses caused by them are just not a good trade-off.

Groceries are in real terms very inexpensive. Learn to cook from scratch and avoid pre-prepared meals that are usually high in salt and sugar in any case. A balanced diet rich in fruits, vegetables and fibre and low in fat will keep you healthier. If you eat a balanced diet you can dispense with the dietary supplements and vitamin pills to save money.

Get rid of your junk and then live in a smaller house of apartment. Too many people live in a couple rooms in their house and then the rest is just for storage. All that capital invested plus heating and cooling for storage of stuff you're not likely to use in any case. That money is better off invested in income generating assets to offset higher energy prices and inflation.

Get a hold of some annuity and amortization tables and do the math. Start with a more realistic assumption, not based on the past years of unusual growth, of 3% real interest rates and 3% real growth in housing prices. Then use a house worth $150.000 versus one worth $300.000. Use a 25-year mortgage. Calculate the house that goes up in price 3% with a 6% mortgage (in real terms, not nominal rates). Then calculate investing that monthly payment amount between the high price house and the low price house at 3% per annum. You will be surprised at the difference between the two. I am not going to do it for you, but take the time and you'll see what I mean. You'll be able to afford a few packs of gum, a bottle of wine now again, or whatever!

Forget make-up. Don't skimp on your sunscreen or good sunglasses though! ; - )

[Doly]

$this->bbcode_second_pass_quote('MrBill', 'O')f course at the top of my list is to drive less.

[MrBill]

You're the mathmetician, Doly.

If your current ratio = current assets / current liabilities

You can boost your current ratio by either increasing the current assets or decreasing your current liabilities

If you tell me you can no longer decrease your liabilities because you have already cut to the bone or have no more costs to cut then you can only increase your current ratio by increasing your assets

That means earning more or saving more. In your case that might mean working more hours or taking on a second job

But I pity those who do not need sunscreeen and good sunglasses, it means you're not getting out enough to enjoy the life you're living? What's the point?