Week 6 of the Bermuda 14-Week Plan to Dramatically Improve Your Finances

The Introduction to the Plan through weeks 1 to 5 can be found by visiting The Royal Gazette website under Martha Myron, starting on August 1, 2015 and each week subsequently on Saturday. http://www.royalgazette.com/article/20150801/COLUMN07/150809998

Yes, you are now six weeks into this personal review of your income and spending habits. It is quite a process, thinking about goal setting, planning ahead, while overcoming your own (and the family’s) resistance to change in the short-term while improving your lifestyle — long term.

However, bright side up, those participating readers — feedback indicates quite a few — should be starting to feel that they have more financial control. Notice, I said should — because it takes a determined gentleman, lady, and family to follow through on this exercise. Congratulations for getting this far, now let’s go the distance!

No doubt you may be greatly frustrated at this point, too. You’ve figured out what you are spending by tracking income expenses for the last 90 days. You’ve started to develop a budget using Your Bermuda Simple Budget Worksheet. You’ve hummed and hawed about setting goals because the process feels like such a large hurdle to cross — sort of like swimming endlessly across the pond — to reach the other side.

So, here we are. Let’s take three personal goal examples: two short-term, and one long-term. The first short-term — a name-withheld designer bag costs $4,400. The second short-term — a new high-tech wrist watch — cost $5,000. The third — a home of your own ($400,000) — requires a 20 per cent down payment of $80,000.

What is your decision? Should your opt for the short-term emotional lift — special accessories to make you feel better — or go for the much longer penny-pinching lifestyle? It all depends on your choices and your commitment, doesn’t it? On Wednesday, Apple executives announced massive new innovation in the iPhone, Apple TV and iPadPro. Guess what these highly paid executives were wearing. Jeans and plain shirts. Expensive clothes do not make the man/woman in today’s world.

Now, where are you going to find the money to fund your dreams?

A few areas to start: pinch pennies, scrounge, negotiate prices, barter, organise your household cost efficiently (electric, phones, internet), eat less, exercise more — walking is free — reduce your wardrobe to a few high-quality pieces, and manage your everyday cash expenditures fiercely and minutely. You are also going to find a second or third source of income.

Small stuff scrimping means big savings. Believe it. Here is a sampling of how you can save, pretty easily. It all adds up. The total of more than $700 per month, times 12 months, equals a pretty significant savings sum.

Write to me. I will send you the Excel spreadsheet so you can track your own scrimping.

Caution: Everyone is different. You make the best choices for your lifestyle.

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SMALL SCRIMPING ADDS UP TO BIG SAVINGS

Cost and savings amounts are based on reasonable assumptions. Actual prices will vary. The estimates below show the monthly savings possible from various scrimping measures.

$5: Subscribe online to your favourite magazines at $50 per year divided by 12 = $4.15 per month compared to $9.15 per magazine per month on the newsstand.

$24: Sunshine dry eight loads of laundry instead of dryer at $3 per wash.

$28: Drink plain water, not soda or sparkling water — seven cans soda per week at $1 per can, buy a Pure filter container, not bottled water.

$128: Take the bus/ferry twice a week — 48 trips in three months at $6 per round trip over parking and driving each day (cost $22 per day minus $6) produces $16 per day savings.

$36: Serve one meatless meal each week savings 1.5 pounds at $6 per pound.

$40: Pack a homemade low-cost lunch, twice a week ie egg salad/apple/banana. Savings $3-$5 per lunch over purchased lunch varies between $7 and $13.

$50: Shop at The Barn for books, school uniforms, jeans, party dresses, children’s toys, small appliances, baby carriages, etc each month.

$60: Buy groceries on discount day Wednesday — 5% on $300.

$12.50: Pay Belco before discount date 5% on balance of $250.

$56: Cut back on cigarettes, two packs a week at $7 per pack.

$50: Avoid afternoon snack break each day, coke, snack, coffee at $2.50.

$40: Use prepaid phone cards — when they are gone they are gone each month.

$80: Give up two glasses of wine at Friday events, or dinner — once a week.

$12: Grow your own bananas — ask a friendly neighbour for a few roots savings. Monthly at $3 per pound for 4 pounds.

$10: Grow tomato sets in pots or recycled coffee cans — average 12 tomatoes per pot at $4.99 per pound, 2 pounds a month.

$60: Buy washable suits (made of polyester and triacetate blends) instead of dry-cleaning — women only, unfortunately — savings $60 per month.

$28: Buy men’s high-grade polyester/cotton shirts — no iron or light press at home. Ironing versus commercial laundering at $5 compared to $12 for 6 shirts per week.

$720: Total Potential Savings — Monthly

$8,600: Total Potential Savings Annually

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A word about our local merchants retailers. Readers must not take these columns the wrong way, that I am against spending, against supporting merchants, against established business. Nothing could be further from the truth. But, if your personal financial life is in chaos, how can you spend when you have no idea where you stand financially?

When you are in control of your money, not financially compromised; then you can afford to reward yourself with that special treat.

You do, we do, in the end support our local merchants, realtors, auto dealers, entertainment, and restaurants and more.

Feel discouraged? Write to me. I want you to meet these goals. I want you to succeed. Do not give up.

And think about how much better you will feel if you take positive action!

Resources:

Bermuda Tightwad Gazette articles — Use the Search engine Royal Gazette

Frugal Living http://frugalliving.about.com/

The Power of Less: A FREE download is available now: Leo Babauta has written a companion to The Power of Less — a free e-book called “THRIVING ON LESS: Simplifying in a Tough Economy“.

http://thepowerofless.com/2008/12/free-ebook-thriving-on-less-simplifying-in-a-tough-economy/

Martha Harris Myron CPA PFS JSM Masters of Law: International Tax and Financial Services,

Appointed to the Professional Tax Advisory Council, American Citizens Abroad. https://americansabroad.org/

Principal: The Pondstraddler* Life™ Consultancy providing international financial planning, publications, presentations for Bermuda residents, their multinational families and connections. Contact: martha@pondstraddler.com