So many people are living paycheck to paycheck right now according to a survey I saw. Seven out of ten Americans are. This is devastating to them and to our economy. I wonder how many of them are receiving a tax return and a large one at that. Are they spending it as fast as they get it or are they saving it for a rainy day?
I don’t think anything is going to get better soon. I hate to be the bearer of bad news. But I believe that 2022 and 2023 are going to be bad years monetarily so we are planning accordingly.
Inflation is killing us. When those of us who retired planned our retirements, we took into consideration what inflation would do to our money over the years. However, we didn’t take into consideration that inflation would be SO HIGH month after month. Everyday expenses are rising so rapidly. There are so many people around me living on Social Security alone and I don’t know how they are surviving. Are they going without food to pay for medicine or shelter or vice versa? It’s a very scary time.
Just as a quick example of inflation: We retired 21 years ago this year. The latest statistics which only go through 2021 show that our money has lost over 50% of it’s value since then. This year inflation is taking an even bigger bite. Fortunately we invested well so we still have a decent standard of living. However we can’t just sit back and watch it evaporate. We have to take action so that our money lasts. Does that mean that we have to cut back? Absolutely and everyone should be! Tough times call for action.
So what would I do if I got a $ 15,000. tax return or a windfall of that amount from the lottery or somewhere else? Yes, I have heard of people getting a return that large. Believe me when I say that would not happen in our household. I do not believe in giving the government a free loan for a year. So I picked this number out just randomly.
First, if I had no emergency fund, I would put $5,000. away for that. I would not touch it for anything but a true emergency. A vacation, a new TV or computer are not true emergencies! If your car needs major repairs or you need to buy a clunker because your car dies, that is a true emergency.
Your refrigerator or furnace needing repairs is a true emergency. A dishwasher or washer and dryer needing repairs is not a true emergency because you have other ways to do those things. I think you get the idea.
Then I would take the other $10,000. and pay off your highest credit card debt or other high interest loan. When you do that, put those credit cards away. Do not use them. Cut them up if you have to. If you have no outstanding debt except your mortgage, put the $10,000. on the principle to pay it down.
Since we have no outstanding debt, I would put some of that money into food. With food inflation being so high, you will make more money by stocking up now than if you put that money in the bank. Food will not be any cheaper than it is today. So buying some food ahead of when you need it is better than money in the bank.
I know that many people are having a hard time just paying their basic bills. You have to cut back. Basic food is much cheaper than junk food. If you have followed me over the years, I have shown you so many ways to save on almost everything. I will continue to do that in the coming days and weeks.
If you truly can’t buy much food, go to the food banks so that they can help you. But if you are spending your money frivolously, don’t you dare go to a food bank. Cut back and leave that food for people who truly need it.
If you are in really dire straits, take on a second job. While I was roaming around you tube, I found a woman who really knows how to do that. When they need extra money, she works for Instacart. If I was in need of money, I would seriously consider that. I know that gasoline is expensive right now but listen to how she does it. Here are the videos that she has put up about how to do it:
I hope that her videos will be a help to someone.