The current economic climate has been tough on Thomas Clark, owner of Renegade'Z Digital, a Northwest Baltimore store that sells cell phones and other items.
"Business is slow. We've seen less and less traffic recently," says Clark, 52, who runs the store with his son Lavar, 21. "I'd say over the last month or so, sales have gone down by 50 percent."
To keep the business afloat, he's cut back on purchasing expensive phones and is offering discount service plans. At home, "we don't buy food anymore; we can't afford it," he says, jokingly.
He then explains that he and his wife, Anita, owner of Disciplined Scholars, a program that teaches kids to read, have been forced to "stick to a budget," and do things such as unplug appliances to save on their electricity bill, and combine the telephone and cable bill to lower the rate.
Clark isn't alone in cutting costs.
Patricia Everett of Upper Marlboro had to stop whipping around town in her Jaguar because at $3.80 a gallon, gas prices are putting a burden on her budget. "I used to spend $30 to fill up a tank; now it costs $45," says Everett.
Although the 51-year-old manager at Lockheed Martin is not struggling financially, she plans her expenses carefully these days.
"I love to travel, but I realized I couldn't just jump on a plane whenever I wanted to," says Everett, who recently passed up a trip to Hawaii with friends.
Before you get caught in this economic downturn, here are some tips to help you spend wisely.
Curb your spending. "Plan your expenses before you ... cut back on eating out and going to the movies," says Sharif J. Small, a retirement and tax consultant in Baltimore. He also recommends that clients "refinance your car note for a lower rate and move the due date to the middle of the month, instead of the end," to pay less interest. Get together with friends for game night, do your own hair and nails and only shop during big sales events to save even more.
Establish an emergency fund. Although the recent tax rebates were intended to spur the economy, "many local taxpayers might be better served by building or increasing an emergency account or paying down high-interest-rate debt," says Lanta Evans-Motte, a financial adviser for Raymond James Financial Services in Beltsville. Experts like Small advise that "before you pay your bills, use at least $25 a pay period to pay yourself first, and increase the amount every three to six months by $10." So the next time the car breaks down, you'll have the money.
Take your A-game to work. If you don't want to land on the chopping block, become indispensable to your company. How? Lead new projects, arrive early (you'll get more done and get noticed) and create a cost-cutting strategy like an energy-conservation initiative. "Also, go back to school to increase your education and earning power," advises Small.
Review your household bills. Figure out how much you have coming in and how much you have going out. If you have more going out than coming in, reconfigure. Go basic on cable, "increase the deductible on your car insurance to lower your premium, and refinance your mortgage" if there is a better deal available, Small says. Also, don't be afraid to call your creditors and tell them you have a "financial hardship." Ask to arrange a lower payment plan without penalties. The key is to call before you get into trouble.
Is that negotiable?
Whether you're buying a pair of shoes or a flat-screen television, always work to get a better deal. Here's how:
Compare prices at comparisonshopping.com.
Get at least three quotes and allow the retailers to educate you about what you're buying.
Know exactly what you want (make, model, model number, price).
Ask the savvy-shopper question: Is that the best deal you can offer? Then wait for a response.
If you don't like the deal, walk away.