Wednesday, October 8, 2008
Dylan Ratigan from CNBC opened the show via satellite to give more information to viewers about the current economic emergency. Everyone at CNBC has been dealing with processing information and trying to get it out to people to understand what is going on with the country. This economic crisis is a wake up call to everyone to be more responsible with their own financial decisions. A warning to everyone is that if a deal looks too good to be true, then it is and turn it down. If people were to talk to their grandparents about how loans worked years ago, today's systems didn't work then and don't work now.
The problems that are occurring are because everyone - individuals, corporations, the government - borrowed more than they could afford to pay. Now the US has maxed out credit and owes trillions to other countries and needs money to improve services. The stock market is a reaction to the fear of the banks and a reflection of how everyone is feeling right now. From here, we all need to understand the problem and do our part to stop borrowing more than we can afford to pay back. Understanding when going in for a loan that if it seems unreasonable, there is someone making money off of it and choose another loan.
6 Skypers shared their secrets for how they save money including:
- Friends Cassandra and Stacy redecorated their living rooms by trading furniture with each other. Stacy also started bartering services as a dance teacher giving dance lessons in exchange for meals at the other family's restaurant. Instead of spending $300 making Christmas candy, Cassandra used the plums in her yard to make jam and packaged it as gifts for just $30.
- Rhondalyn saves money on her electric bill by unplugging everything when it's not in use - including the televisions. Her monthly bill went from $260 to $60.
- The Marvel family spent $1500 last year on an annual camping trip. Instead of spending that money again this year, the family set up camp in their back yard and vacationed at home.
- Felicity, who is pregnant with her fourth child, budgets her money by taking out a predetermined amount of cash and dividing it between 6 envelopes for allowance, gas, groceries, takeout and everyday use - when the cash is gone from the envelopes, no more can be spent for the week.
- Kristi, a mother of 5, saves money and the environment by riding bikes to take her children to school and even buy groceries.
- Andrea and her family were hit hard when both she lost her job and her husband lost hours at work - they now live on 1/3 of their old income. The family has adjusted by taking a calculator grocery shopping with them, packing coffee and lunch instead of buying and Andrea even volunteers to teach aerobics to get her gym membership for free.
Sue and Brett Heinz were named one of Parade Magazine's thriftiest families in America. Sue is a stay-at-home mom of 4 and the family's net income is $58,000 a year. The family saves money by using a prepaid cell phone plan at $5 a month, having Brett carpool saving $122/mo, Sue cutting the family's hair saving $550/yr, doing their own home repairs saving over $6,000 and making budgeted homemade dinners for 6 for $4 a meal. The family has $70,000 in savings and says they became thrifty out of necessity. They wanted to own a home and have a large family and set their priorities to make it happen.
Vicky and Mark Sandberg always enjoyed having 2 incomes and the lifestyle that their jobs provided for their family. 4 months ago, Vicki lost her job and the family income was decreased by 40% - the family fears losing what they have worked hard to provide for their 2 children.
Oprah had the Heinz family help the Sandberg family by going through their monthly budget and finding ways to cut spending. The Sandberg's budget totaled $8,744 per month - more than what they were bringing in. This budget included $650/mo for department stores, $350/mo for restaurants and $190 for phone/internet/cable.
Sue started by having the Sandberg's keep daily receipts in a basket and recording them each day in a journal - the money spend would be divided into needs and wants. The Sandberg's also cut up all but 1 credit card to be used only for emergencies and began using a debit card with reward points.
Vicki and Sue went to the grocery store with weekly sales and coupons in hand to create a meal for 4 for under $5. Sue's meal included: chicken $2, potatoes $.62, veggies $1.40, olive oil/BBQ sauce/lemon juice $.50 - for a total of $4.52. Brett showed Mark how packing lunch with dinner leftovers can save $120 a month.
Sue helped the Sandberg's research local restaurants the offered free kid's meals and drop their home phone line and switch cable providers to save $100/mo - in total, the Heinz family helped the Sandberg cut $2,000 out of their monthly budget. Sue's ultimate tip - make the most of your local resources.
Money Saving Tips - CouponMom Stephanie Nelson:
With grocery prices rising, Oprah challenged the "CouponMom" Stephanie Nelson to buy a week's worth of food and cut the total cost in half. Stephanie recommends:
- Plan meals around what is on sale for the week
- Use the internet and newspapers to find deals
- Buy fresh produce when it's on sale or in season, if not, use frozen
- Stock up on chicken/beef/fish when it's on sale to never have to pay full price
- Look for manager's special sale items
- Ask about double coupons
- Get the store's BOGO Free policy - do you half to buy 2 to get the deal or can you get 1/2 off one item?
At the end of Stephanie's shopping trip, she had purchased $127.18 worth of groceries and after her loyalty card and coupon she reduced the price to $37.16 - a difference of over $88 or 71%! Stephanie says her techniques are do-able for any family and the key is having an efficient system. Keep planning to 30-60 minutes a week, buy 2-3 copies of the Sunday paper and only cut out the coupons you need, print coupons from the internet or load electronic coupons to your loyalty card.
Money Saving Tips - Thrifty Ways to Sell Your House:
Viewers shared interesting and creative ways that they sold their houses that other viewers could try. Jennifer needed to sell her house and had no offers after 5 months. After 2 days on Craigslist, it was sold. Karen worried about selling her home and decided to raffle it off for $100 a ticket with any money over the appraised value going to charity - 6,000 tickets were sold and a local charity received $200,000. Couples Mike & Pam and Laura & Ryan swapped houses by finding a match using the internet - both couples got the house they wanted to move to and the price they wanted for their old home.
