Thursday, February 26, 2009

Dana's Tips

Great ideas, ladies! This is a VERY important topic to discuss right now. In fact, my husband and I talk about the economy and strategize for our family almost daily now. We really believe that we are in an economic downturn that will equal or exceed the Great Depression. The indicators are all there. PLEASE get your families prepared financially. The prevailing wisdom used to be that families should have an emergency cash reserve of three months’ salary. Lately that recommendation has increased to one year’s salary. Sorry to be so scary, but I think it’s important.

Here’s my two cents, so to speak...

Health care: The biggest money-saver I’ve discovered lately is for health insurance. What you do is switch your health insurance to a cheaper plan with a high deductible (at least $3,000 or so) and then open a Healthcare Savings Account (HSA). You put money in the HSA and then use it to pay all out-of-pocket healthcare expenses—anything your health insurance doesn’t cover such as copays, immunizations, and even over-the-counter medicines at the drugstore. The cool part is that you don’t pay income taxes on any of the money you put into the HSA, so you basically get 30% off all your health care expenses (or whatever percentage your tax bracket is). I have an insurance agent that set all this up for me for free.

Tax deductions: Aside from your house or apartment, taxes are probably the biggest expense. Since tax time is coming up, be sure to take ALL of the deductions to which you are entitled. If you do your own taxes, don’t forget about some of these:
--deduct all DMV fees
--deduct property taxes and mortgage interest (if you own your house)
--deduct all contributions to your church or other nonprofits, including clothes donated to thrift stores
--deduct miles you drive for charitable purposes (14 cents per mile)
--deduct miles you drive for medical purposes (27 cents per mile)

My husband owns a business, so we are able to take tons of deductions that employed people can’t take. The benefits are absolutely amazing. For example, his company buys the pricey ink cartridges for my home photo printer because Mark uses it to print out things for work. If we take a weekend trip to San Diego, we stop by one of the stores that carries Mark’s products and chat with the owner for a bit—abracadabra, a deductible trip. However, the “security” of a reliable paycheck is also a big positive, so there are good and bad points to owning a business.

Drugs: Buy generic. As long as the active ingredient is the same, it’s the exact same medicine for less than half the cost. Costco generics are especially cheap. My husband takes a lot of Benadryl for his allergies, so I buy big bottles of generic Benadryl at Costco for about $3.50.

Retirement plans: Move your retirement plan (IRA or 401-K) investments into stable money-market type funds because the stock market is still going down and probably will continue to do so for a while. The news is full of government predictions that the recession will be over by the end of this year, but I don’t believe that one bit.

Groceries: Big Lots and the 99 Cents store are awesome! Vons and Ralphs are the only local grocery chains that double your coupons. Sprouts (in Claremont) has REALLY good deals on produce in their ads, but it’s not cheap for anything else. Costco is great for many things, but don’t assume that Costco has the best price just because it’s Costco. Know the prices of the products you buy. Also, I recently read that the biggest waste of money on groceries is when we don’t use something and let it spoil—especially true for produce. That’s a big argument for planning out the week’s meals in advance, which I’ve always intended to do but it’s never actually happened. Several others have already talked about, but I want to put in my vote for it, too.

Other coupons: Someone mentioned this already, but I’ve found it very helpful to go to the websites of products I buy frequently and sign up for their email newsletters which often include coupons.

Clothes: Shop the end-of-season clearance sales. A few weeks ago, Kohl’s had racks and racks of clothes at 80% off. JC Penney’s had stuff 70% off. I get a big charge out of showing my husband what I bought and then asking him to guess how little I spent for it. I rarely buy clothes for my boys because my sister-in-law (who has a 6-year-old boy) hands down all her son’s clothes to me. See if you can make an arrangement like that with a friend or family member.

Books: I love books, but I rarely buy them new. There are tons of used book sales—each public library has one or two a year plus random other ones such as the Pilgrim Place Festival in November. Also, each county has a great system where you can request books from other libraries if your local library doesn’t have a certain book that you want to read. You just put the book on hold, the library that has it sends it over to your local library, and they let you know when you can come pick it up. To access the catalog for L.A. County, go to

Activities for kids: Parks are tons of fun and free! I read about great idea. The mom put a map of her city on the wall and marked all the parks. Every week she took her kids to a different park. The kids got to rate the park on different things, and the mom kept track of the scores. They went back to the “favorite” parks on special days. This mom had older kids and did this during summer break, but it sounds fun. Do things close to home to save gas. Hiking in the mountains is a great family activity (but I don’t go without my husband for safety reasons).

There’s a Circuit City in Montclair and a Chick’s Sporting Goods in Upland that are going out of business and have everything discounted. Also, Second Story Books in the Claremont Village.

Keep a wish list of things you’d like to have but don’t really need. Then consult the list when people ask what you want for your birthday.

Keep the great tips coming! Also, let’s not forget to praise God for the blessings he gives each of us in the midst of these hard times and keep an eye out for others who could use some help.


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