It's all about priorities

My mother heard an interesting saying which she relayed to me and as some sayings do it has stuck with me for quite a while. It goes like this:

You can't tell who's swimming naked until the tide goes out.

What does it mean? Well basically when things are going well in the economy it is easier for people to keep up appearances even if their income doesn't support it. But once things take a turn for the worst, as it has the last few years, those overextended people soon become quite apparent.

I think almost all of us have been guilty of being a bit careless with money in the past. Nothing like a 'good' Global Economic Crisis to pull us all into line.

We are by no means perfect when it comes to being frugal but one thing that I am proud of is that we do not overextend ourselves with HPs, overdrafts and credit card debt. Oh we did once. It took a year to pay off that consolidated loan. Lesson learned and never again!

Anyway the 'best' thing about the current situation (apart from ongoing low interest rates) is that people are starting to get creative. There's a new surge in home made clothes and crafts. I'm sure it's no accident that Pinterest is growing so exponentially. So many good ideas there. Gardening is taking off again. Old recipes are being unearthed. People are trying new tastes - especially protein sources such as pulses and beans. Nosh has even waged a price war with the supermarkets on the price of milk. (yes I know it's a loss-leader and don't even get me started on how wrong it is that there should ever be a cause for a war on such a basic commodity...)

And yet I constantly hear of people struggling because they don't prioritise. Don't get me wrong. I appreciate it is hard out there. I am not saying that people are struggling simply because of wrong choices (thanks John Key) but there are a few that could be a little smarter. Here's a bit of 'brain spew' from my completely unqualified noggin:

• If you're finding it hard don't go nuts on label clothing for the kids. Honestly I think clothing children (shoes excluded) is the cheapest part of having them right now. If you want new stuff buy on sale for the following year. Otherwise second hand op shop stuff is usually in pretty good nick and very cheap. The retail sector is struggling - there are sales everywhere. You should not have to buy stuff at full price.

• Make use of your garden. If you don't have a garden make one in pots and containers. If you don't have the time or this isn't an option then buy at your local market. We did it the other weekend and got an entire week's worth of produce for under $20. There were 4 vege stalls to choose from. Get friendly with your neighbours and swap unused fruit for some of the end result preserves that you are going to make.

• Learn how to cook some meals meat free. There are heaps of other protein sources. Also stop with the takeouts - they're stupidly expensive. (OK confession, we still do takeouts once a week).

• Plan your trips. Walk when possible. Petrol is expensive. Also in the same vein, car servicing when possible is important. It's more expensive to fix if you wait until things go wrong. Try and put money aside for this and do it annually.

• The horrid 'B' word. Make a budget. Go and see Sorted.org (link on the side)

• Don't let the banks keep raising your credit card limits. Stay on top of this. Try to only use your credit card for emergencies and only spend what you can pay off in the month.

• And the most important one - Learn to differentiate needs from wants.
  * SKY is not a need - we don't have it. We are still alive.
  * New couch on 24 months HP. Be very careful because there is no such thing as a 'free lunch'. Also I would strongly discourage anyone from buying items with a quick devaluation on HP unless they absolutely have to. That's phones, computers and definitely cars.
  *Cloth nappies. Yes you can have too many. You don't need a limited edition whatever. It's a NAPPY. It will not feed your children.
  * Just follow the golden rule - ask yourself 'do I really need this?' This doesn't mean never treat yourself. In fact I would recommend you put money in your budget for little treats. It would be a sad world indeed with no coffee ;) Just be sensible.

Most of this is not rocket science. Most of you will probably be doing this and more now. But you would be surprised the amount of people who are not managing simply because they are not prioritising needs and wants and still trying to live outside their means. Do yourselves a favour and live frugally - you will feel freer than you would running around in a unpaid for car, sitting on an unpaid for couch and looking for all the world like a million bucks.