I have suffered a dramatic change. I have had to move from “spending” to “not spending”. I built my personal financial system carefully over years and years of spending money, sometimes cautiously, sometimes rashly and sometimes wildly. At all times I planned, saved and budgeted, always keeping spending directly linked to earning. Now I’m in a “hold spending” period. I saved hundreds of dollars in 2011 by getting some good deals on financial products. You can do it too.

 

Years ago I fell into the habit of accompanying my wife on her trips to the supermarket. These outings ranged from ‘totally boring’ to ‘mildly interesting’ until I discovered that there’s a man’s world in the supermarket. I discovered the 10 varieties of olives, the 20 varieties of pickles and the carousel of fiery hot spices. I found the exotic cheese counter and the cheap tee-shirt rack. I bought what I fancied. My job was great, the salary package was generous and I always had money in the bank.

 

At about 9am one morning I received a phone call from the owner of the company I was managing: “We are closing down. Not enough work, blah, blah, blah… the faltering hi-tech industry, yak, yak, yak… Our shopping trips changed. I still accompany my wife. We go to the supermarket – with a list. We buy the items on the list and come home. Money saved: Considerable.

 

In the good old days when I had a problem with money, my first port of call would be the bank and my friendly bank manager who would always lean over backwards to help me. That’s gone. These days when I have a problem with money I put as much distance as I can between me and the bank. I’m just another customer and I’ve never met the manager. I changed banks recently, mainly because the bank on Pine Street offered better deals than the bank on Elm Street. If the bank can treat me a casual customer, then I can treat the bank as a casual service.  

 

I had sudden urge to make sure my “papers” were in order in case I got hit by a bus. The results were surprising. Other than stuff like life insurance, pension and savings which I regard as a ‘do not open’ box unless the agent is present, I looked at such fascinating items as household and auto insurance. It’s been years since I received these policies. If you work on the basis of ‘no claims, no look’ as I do, the years slip away. I took them out and called a couple of new acquaintances in the insurance business. Surprise! The trusty old agents I had used all these years were no longer looking after my interests. They were renewing my policies every year without looking at the premiums. I replaced these policies with a new agent and saved huge amounts of money for the same coverage. I also told the new agent that I would be shopping around for new quotations at every renewal date. If the old agents didn’t look after me do I still have to look after them?

 

 

 

My wife interrupted my writing this morning and said the downstairs neighbors had returned home and we should go and visit them. Two months ago they left to join their daughter and her children in the south of France. We found them in their living room. Sam looked okay but Susan looked terrible. She was pale, thin and her hands were shaking. “What’s wrong?” we asked. And out came the horror story.

 

“The first few weeks were wonderful. It was school holidays. We hi red a car and traveled around and saw the sights. We spent quality time with our grandchildren. We took them to Paris. We ate in a couple of real French restaurants and we saw a few shows. It was marvelous. We came home in time for school and settled into a routine in the village where we were living. One morning I woke up feeling ill,” said Susan. “As the day wore on I felt worse and worse and by evening I was practically unconscious.”

 

Sam took over. “I took her to a hospital in a nearby town. In the emergency room they started working on her and finally a doctor came out and in very poor English explained that they did not understand what was wrong with Susan and he thought they were losing her. “She seems to have an infection throughout her body. From the blood tests we think it may be septicemia or peritonitis. I don’t have experience…”

 

In the end, as a last resort in an effort to save her, they cut her open, washed her out and stitched her up. “That’s all we could do. I am very sorry. I do not think she will recover.” Sam was desperate to get her home as quickly as possible. The next morning he managed to get tickets on a flight, bundled Susan up and took her to the airport. She said, “I sat in that plane literally holding myself together. I don’t remember much of the flight.” Sam said, “It was an absolute nightmare.”

 

Here at home she is attended by doctors, a nurse comes and takes blood samples every day, a physiotherapist is working to get her back in shape and they are both feeling much happier. Susan is not out of the woods yet but she has a fighting chance.

 

Of course as long-time neighbors and as friends we asked many questions. In the end, I managed to ask the wrong one. “Sam,” I asked, “we both have good medical insurance schemes and we both pay high premiums for that pleasure. “Why didn’t you call them, when this happened? As far as I know they would have sent a doctor out to see you and to help get Susan back.” He looked at me for a minute. “I never bought travel insurance. At our ages and with both our medical histories it cost about $12 a day each. For 2 months that would have been $1450. Would you have paid that?”

 

The important keys to financial security are good habits. If you want to put yourself in position to weather any financial storm, you need to understand and follow only four good habits:

Studies show that Americans load themselves down with large debts compounding the difficulties they face in making themselves financially secure. Only those who keep their debts under control stand a chance to make themselves financially secure. Homeownership is a reasonably good store of value in the long-term. There’s nothing wrong with taking on debt to buy a car, either.

 

Consumer debts are those that people pile on to buy consumer goods such as televisions, do-it-all telephones, vacations at expensive resorts and the like. Credit card use is usually a bad idea for the individual because it leads to overspending, not to mention high interest charges if you don’t pay your balance off every month. The solution: Use cash when buying anything other than irg-ticket items.

 

Studies show that Americans work harder than most other people in the world, and what they have to show for it is an economy that creates extraordinary wealth year after year, decade after decade. People who want to make themselves financially secure don’t always love their work but they need a paycheck like everyone else. Hard work pays off in many ways. It creates opportunity, for example; in any company, it’s the hard worker who gets the difficult assignment, and it’s the difficult assignment done well that gets the raise or the promotion, or both. Hard work brings you two bonuses: The first is the satisfaction of knowing that you’ve done your best. The second is a small miracle. No matter what your job, if you master it, you can’t help but like it. And if you like your job, you’ll work hard at it.

 

At least 10 cents of every dollar you earn. The solution to the problem of putting money aside into savings is simple. If you don’t make it a priority to put money aside into your savings every month, you won’t lose your house, to be sure. You’ll just lose the chance to make yourself financially secure, and no matter what your age, study after study shows that you will almost certainly reach that goal if you put aside at least 10 cents of every dollar you make, and preferably 15 cents.

 

Protect yourself against catastrophe with appropriate insurance. No matter how good a driver you are, you can have an accident. No matter how carefully you guard your health, you can get sick. No matter how young you are, you can die. Insurance is the only way to protect yourself and your family against these risks. Find a good insurance agent, figure out what risks you face, and get insurance to cover them.