Dear Readers, how are you saving on your household costs? Will you tell me your “secrets” as I invite you to contact me at martha.myron@gmail.com? Kindly state your name and whether you would like to remain anonymous. I never reveal my sources.

The recent announcement by our local utility company, Belco (yes, I’m using the old name) regarding a contemplated rate increase in electricity had to have left Bermuda families frustrated with trying to manage their own household budget.

Belco management cited more than five years of declining sales and profits as the reason for the requested price hike. Unfortunately, it appears that global oil costs will remain unpredictable according to the Financial Times, May 13, 2015, “Saudi claims oil price strategy success” (http://www.ft.com/cms/s/2/69350a3e-f970-11e4-be7b-00144feab7de.html#axzz3a9kYEyiZ).

It appears that the company has four choices to boot up the bottom line:

1. Raise revenue by selling more electricity to more new people.

2. Raise rates on the existing consumers.

3. Cut costs across the entire company, including wages.

4. Launch a debt (bond) offering for local residents and other investors. This choice would adversely affect the bottom line in the short term since interest would need to be paid to bondholders, while current shareholder dividends may also be affected. In the long-term, however, it is possible significant infrastructure upgrades could generate cost efficiencies.

Those are Belco’s issues.

Now, what about you, the electricity end-user?

You are in a tightly-squeezed employment market, with little upside for increased revenue or wage increases — given our still stagnant economy. You probably should not be a candidate for launching your own bond offering (i.e. maxing out your credit cards or a home equity line of credit), then, hoping you can pay them off some time over the rainbow. That leaves you with your only course of action — taking aggressive cost-cutting action.

Let’s face it. Managing finances is never easy even when you think you are in control of what you spend. People are blindsided when these events happen; they just feel they have no control and may be tempted to say “to h ... with it, what is the point?”

But you can still take positive steps.

You can express your opinion politely, or vehemently, or not, to the Bermuda Government Energy Commission.

Its e-mail address is energycommission@gov.bm. You can also find the list of Members of the Energy Commission on the Government of Bermuda Department of Energy (telephone 292-4595) website (http://www.energy.gov.bm/portal/server.pt).

Then, no matter the result, you must undertake to change your lifestyle again to compensate for this extra cost.

If utility rates are increased 5 per cent, and the extra topples your planned budget, then you must be equally determined to cut your usage and other costs. Your planning goals are not to allow someone else (person or business) to dictate the way you chose to live — within your means. You are always in control of your dreams for financial success, but you may have to work smarter (and harder) to stay on track.

Tracking all expenses, not just utilities, works logically.

First, you start with establishing your cost base on all expenses.

Second, you accumulate and document these costs. The Tightwad Gazette 20 years ago called this using a price book. If you are into old-fashioned pencil and paper, get yourself a small lined notebook. Each page should list a separate category: electric, gas, etc. Food stuffs — every item has its own page because you are going to be in serious price comparisons while also recording the cost of real nutrition — as opposed to Junk/Comfort “sort-of” food.

For the smart phone users, free software apps are available for both iPhone and Android called generically Price Crunchers. You don’t want to load up apps that read bar codes since that will not work correctly in Bermuda. You need the price crunching software that compares expenses on a per unit-cost basis. Plus, our stores are full of various country items, weighed / sold in confusing mixes of quantities, so the apps also have to be full capable of converting from grams to ounces, litres to pints/ quarters, metres to yards, etc.

Where do you start? Sometimes, it is best to just jump in.

Utilities. Do you know how much electricity you use? Is your usage within the normal range for your family and house size? Have you ever checked your meter from month-to-month?

For electricity, you may have old bills that you can reference for prior unit cost of kilowatt hours, or you may be able to obtain a year of usage from the utility company.

Start now by reading your outside meter at the end of every month, say on the 30/31st, for three months. How do the results — the average cost per kilowatt — compare to last year?

What happens if you decide to dry four-six loads of clothes outside for three months, while turning off your hot water heater except for two hours a day?

What happens if you put the rest on the cost efficiency measures listed on the Belco home website?

Groceries. Do you keep track of all your food items, where you bought them, and differences in same product pricing? Do you know the cost of the nutritional content in each food item? Use the same process — record every purchase for the next three months — in your book or app.

As you compile a real database of tracked items, you will find it easier to figure out even better ways to save.

Next month, we review the cost savings apps, and work through various cost saving techniques — hopefully — from you, dear readers. Send me your ideas — we know you are innovative and creative. Every idea has merit.

I’ve been exploring again various self-help resources to enable families to keep pinching every single penny. Recently, I revisited a true “frugal zealot’s” bible (The Tightwad Gazette) as it was called then, along with a couple of free grocery shopping apps for your phone that can truly help you control your lifestyle, especially food costs significantly.

The Tightwad Gazette was legendary in its time and was started by a young woman named Amy Dacyczyn. She became an expert on economising at home, without an outside job and with six children. Otherwise known as the “Frugal Zealot”, she earned a reputation for saving that was legendary.

Just a few notable items, although there are may more. She washed all Ziploc bags, again and again as well as tin foil. One original piece of tinfoil lasted two years. Her Robot Halloween costume made out of free scraps, cast-offs, and trash treasure is extraordinary. Her spouse had a modest career, but even so she saved enough cash in five years to make a substantial down payment on a decent home. She subsequently published her book, almost a thousand pages touting all of her and her readers money-saving techniques. It is still available second-hand on Amazon for a couple of dollars and well worth buying. She would, of course, support that purchase wholeheartedly (http://www.amazon.com/The-Complete-Tightwad-Gazette-Dacyczyn/dp/0375752250).

Martha Harris Myron CPA CFP JSM Masters of Law: International Tax and Financial Services, appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. President, The Pondstraddler Life™ Consultancy: international financial planning, publications, presentations for the challenging lifestyles of multinational individuals and their families residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle. Specific focus for residents of Bermuda, the premier international finance centre. Contact: martha@pondstraddler.com