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December 16,2017

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Save Money The Scottish Way

1. Be Utilitarian
When William Wallace led the Scots against the English in the 13th and 14th century, the militiaman's weapon of choice was more likely to be a pitchfork or scythe than a spear or sword. Why? The average Scot used a pitchfork everyday, but swords were expensive and rare.

In battle, a sharp pitchfork was just as fatal as a sword, so very few men needed swords. Many people would be well served just by learning this one lesson: buy what you need, and if your needs change, adapt. It's foolish to buy a sword if a pitchfork will do just as nicely.

Examples abound of people paying for more than they need: a polished teak table to hold up a TV dinner, a brand new laptop to send email and print photos, an SUV to drive to the suburbs and back or a huge house that is ruinous to maintain. The waste goes on and on.

Plan your purchases as you would plan a vacation. Know precisely what you need and how much you are willing to pay for it. Write it down and carry it like a talisman to ward off aggressive salespeople.

2. Buy Second Hand
Britain's economic emergence during the Industrial Revolution owed much to a single invention: the Watt Steam Engine. In 1763 James Watt, a Scotsman, got his hands on a broken, second-hand steam engine and modified it to be much more efficient. Within years, Watt went from refurbishing old models to creating his own line of powerful engines - engines that drove the factories that made up the industrial revolution. The lesson of buying second hand, while less dramatic than powering the industrial revolution, is that it can save you significant amounts of money.

Used goods were once the specialty of pawnshops - where you could get a near-new stereo for a 70% discount if you didn't mind the bullet holes and the dark stain on the left speaker. However, these goods have now become commonplace. Quality second-hand shops are popping up all over the place. These stores offer used models in good working condition at significant discounts compared to buying new. Garage sales, warehouse auctions and eBay auctions are also great places to search when you know what you want.

Another area where buying second-hand pays off is in cars. Because new cars generally plummet in value once they have been driven off the lot, a careful buyer can find a used car comparable to the showroom model at a huge discount. Japanese cars in particular seem to hit a certain price and stick there whether you own it for two years or five. This means if you find a decent used car, you may be able to sell it after a year or two for nearly the same price as you paid for it. Whether it is a car or a stereo, you can save yourself a lot of money by finding a used model with the same capacity.

3. Do It Yourself
When the Oxford English Dictionary was floundering on the edge of oblivion, the university brought in a Scotsman by the name of James Murray. Where the previous chief lexicographers delegated and did little, Murray rolled up his sleeves and began hammering away at the dictionary letter by letter. His do-it-yourself attitude saved the dictionary. He managed to keep expenses down and still produce results. This attitude will save you more money than you may realize.

You are the cheapest labor you can hire. When you pay someone to do a task such as mow your lawn, paint your house or change your oil, the service is costing you much more than the amount on the receipt. To understand what you are losing by not being hands-on, you have to look at how much income you have to earn to produce enough after-tax dollars to pay for a particular service.

For example, if you pay $1,000 to have someone landscape your yard, and you are in the 28% tax bracket, the job actually required around $1,400 of before-tax income. Getting out the shovel and doing it yourself is like adding $400 to your yearly income, let alone saving the $1,000.

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