America's+Cheapest+Family

America's Cheapest Family by Steve and Annette Economides Review by Yido Jang __America’s Cheapest Family__ discusses several topics that are incredibly important to any family: food, budgeting, cars, housing, utilities, debt, medicine, clothing, entertainment, vacations, kids, savings and attitudes. A variety of money saving tips and tricks are presented in each chapter. Each and every one of them is an idea from the experiences of Steve and Annette Economides, the parents of America’s Cheapest Family.

So who is America’s Cheapest Family? Why, it is none other than the family of Steve and Annette Economides. They’ve been called a variety of words depicting their frugality, but the fact of the matter is that they have been able to efficiently use their money towards the “American Dream”; they own their own home, buy cars in cash, have great vacations and put their money in savings. These are just two ordinary people who have learned how to live extraordinary lives on the cheap. The book starts by pointing out that the goal of economizing is not for the sake of skimping; it is to help achieve bigger, greater goals. In order to help achieve these goals, three main themes constantly recur through the entire book; avoid debt like the plague, live below your means, and embrace the thrifty lifestyle. Why is avoiding debt so important? This is because overuse of credit actually lowers the standard of living. After spending so much money, the money will have to be paid back eventually, normally with more than you actually spent at the time. The Economides have seen relationships and families break from the weight of debts. However, the authors also exclaim that it is possible to live debt-free. Living below your means means living in a way that uses less money than you make and getting more out of living in such a manner. It sounds incredibly simple and easy on paper, however, the book’s many stories of financially troubled families says otherwise. And finally, embracing the thrifty lifestyle means to live a life that is resourceful, efficient and practical, without caring about the people who scoff at this lifestyle. But it is okay because eventually all the scoffers will be eating your financial dust! Now, the topic of groceries is the listed first out of the thirteen sections because it is probably the easiest and most cost-efficient way to reduce family spending. Three basic themes are present in this chapter; coupons, bulk and storage. Groceries are bought with coupons as often as possible, from as many stores as necessary, and with the fewest actual shopping dates. The Economides family only goes shopping once an entire month. This expedition lasts over five hours, across several different stores. This may seem like a huge amount of time, but when compared to shopping for two hours once every week, the gains in cost, or lack thereof, and time greatly outweigh the inconvenience of one super trip. There is statistical evidence that shows that more unnecessary items are bought with more trips to the store, so one trip a month will greatly reduce the purchases of these kinds of goods. Coupons will help reduce the price of many day to day goods, and so will the removal of brand loyalty. Shopping from numerous stores will save more money than sticking to single grocer. And finally, buying huge amounts of food isn’t useful unless it is preserved in an effective way, like a large freezer. Buying seasonal foods isn’t very practical unless you own a good way of keeping it usable over long periods of time. Budgeting is an integral part of any family’s financial stability. Why do you think major corporations have budget teams in every department? Unfortunately, many families have misconceptions about budgeting, like that they don’t make enough money or income is so erratic or they have it in their heads or that budgeting is too restrictive. Even with limited funds, a budgeting system can help stretch every dollar. A written budget is probably the most effective way to smooth out the peaks and valleys of erratic income. A written plan will put the spending into black and white numbers that cannot lie. Lastly, a written and maintained budget will give financial relief, security and freedom. A written budget can be easily maintained if it is regularly checked twice a month and if spending never exceeds income. The budget book is just a list of categories where money will be spent (allowances, car, clothing, food, insurance, mortgage, savings, etc.) that adds up to equal total income. This takes out all the guess work of making sure you are not in debt. Cars are a huge investment, so when it is best to be well informed when making this huge purchase. The steps to buy a used car are to save first, to pay in cash, to research as much as possible, to compare all available options, to phone ahead of time, to thoroughly inspect the car, to get the best price and finally, to drive home. Buying a used car gets a cheaper car, and because most used cars are older, this provides a lower insurance rate. By buying the car with cash all at once, you will eliminate the extra fees that would be needed for credit. This money can be better used for insurance, car maintenance or even groceries. When purchasing a home, the authors recommend that house payment, insurance, taxes, maintenance and utilities use no more than 40 percent of your monthly income. When taking a loan, be reasonably close to your annual income. Taking a loan that is two or three times the income is a big mistake. By adding a few extra dollars to the house payment over time, you can save lots of money. The authors took a 30-year mortgage of $46,000 on a $53,000 house that should have cost $150,000 over the full course of the loan. They paid off the house in nine years. A large down payment will also help cut private mortgage insurance, shaving off some $35 to $60 a month. There is a lot more in this book to help control finances. Save money on utilities by turning off unused lights, closing doors, keeping the faucet from dripping or investing in good windows. Never get into debt by asking lots of questions, always researching, being patient and reading the fine print. Buy cheap clothing by going to consignment stores, thrift shops or discount markets. Have cheap and inexpensive fun by researching cheaper trips, staying near the home, going to local concerts and sports games, or free holiday festivals. When vacationing, pack breakfast foods, water, a slow cooker, a cooler and canned meals to cut down on costs. This is an interesting book because it offers many basic truths that are obvious once you read them. Do you want to save money on food? Buy less food and buy in bulk! Do you want to save money? Don’t use your money! Do you want a cheaper car? Buy it used! Unfortunately, this book is a testament for the impracticality of modern American society and the prevalent idea of borrowing to success. The practical ideas of this book provide insight for creative solutions that enrich your life, both figuratively and literally. Despite the books good intentions, it doesn’t help me right away, as I don’t have a mortgage, debt, groceries or even a job. Fortunately, I did learn a lot about properly managing my finances, the dangers of debt (there was a 30 year old professor with college debt. COLLEGE!), the follies of credit and the good feeling behind financial security.

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