Buying skills cut living costs —some steps to success

Press, 7 March 1978, Page 13

Buying skills cut living costs —some steps to success

To make money go further the extension department at Otago University suggests a number of steps. Buy to a plan Make money work for the family in buying the life you want to live. Just as our parents gathered their possessions round them over the years, we must set up a spending and saving plan so that the income covers present and future expenses. Be realistic, think things through and talk it over before deciding how to divide out the money. Buy needs first When the income is small and the needs great, little will be left to satisfy wants. Buy food, clothing and shelter first and protect the family with life assurance before buying expensive stereo equipment and other non-essen-tials. Ask “Do we really need it?” and “Are there other things we need more?” to help decide your priorities. buy at lowest cost Here are three steps to consider: — (1) Where to buy. Wholesale markets and discount stores provide standard goods at less than the usual retail price. Supermarkets give price advantages, too, though service is reduced. Remember to add the cost of travel when deciding which shop to patronise. (2) How to buy. It pays to buy in bulk to get the benefit of lower unit' prices. If the quantity is more than enough for your family, share such purchases with friends and neighbours by forming a buying group.

(3) How to pay. Pay the cash price whenever possible. It costs more to use. a monthly account as prices are usually higher to cover operating expenses. For major purchases it may be best to spread the cash payments over three months otherwise it is sometimes hard to get service if faults develop. Buv when the price is right Wait for sales and other special offers to get stan= dard goods and make costly purchases. “No extra for terms” periods spread payments but avoid credit charges. During sales many large stores offer 10 per cent off the price of non-sale goods. This is the time to make any large purchase set down in the buying plant. Buy to suit your needs Advertisers and promoters try to persuade us that we need the goods they are selling. This may be true but first ask yourself if it is a real n-eed or one created to meet the producer’s interests rather than your own. Buying skills include knowing what to buy as well as how to get it. Buy the simplest form.

When cash is short, we cannot afford to pay for other people’s labour but must use our own skills. Families can perform the tasks of making clothes and furnishings, tending a garden, servicing the car, painting the house, and cooking, baking and preserving food. Where these skills are absent, arrange to exchange your abilities with those of other families. Entertaining, sports, games and holidays have

all become expensive items in family budgets. Consider less costly alternatives that family and friends can still enjoy, like picnics and pot-luck dinners. Make use 'of the local facilities we all own together, such as the public library, swimming pool and concert hall. Buy for value. We must make sure we always get value for money when we shop. Learn how to read labels and understand what the product is made from, what it will do and how to use and care for it. Know the signs of quality in fresh foods and other unlabelled goods so you can judge their value in the absence of shopping aids. Buy credit wisely.

There are times when goods are needed and we cannot wait until the cash accumulates in the bank.

Credit services can come to our aid, but we must watch not to become overcommitted with too much of the family income earmarked to repay the creditor. Think about all possible sources of credit, not just hire-purchase and other high-interest loans. Consider using you own savings which are earning less interest than is charged on a hire-pur-chase agreement. Other alternatives are to borrow within the family, arrange a personal loan 'from a banlr or apply to your credit union or other cooperative which makes loans to members. You may not succeed in taking all these steps to control the cost of living. But if you can keep the rise in your costs below the level of inflation, then you are on the winning side and your family finance is in good hands.