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Increasing personal cash flow during the recession

Increasing personal cash flow during the recessionBetween September 1, 2008 and October 15, 2008 the value of the Dow Jones Industrial Average decreased by over 25 percent. Believing the economy would only get worse, my wife Christine and I made changes in our spending and living habits in order to ride out the anticipated recession.

Mortgage loans and credit cards

We watched fixed mortgage interest rates drop and explored the possibility to getting a lower rate on our first mortgage. With falling home values we were not sure if we could, but in March 2009 we locked in at 5 percent and reduced the term from 24 remaining years to 20. The 30-year rate was also 5 percent, but our mortgage lender advised us not to go “backwards” on our debt.

We paid off the credit cards, VW Jetta car loan and used remaining refinancing proceeds to pay down our second mortgage. The amount of monthly consumer debt payments we made disappeared because we have not used charge cards or “convenience checks” except for the Chevron and Macy’s cards, which we pay in full every month. We are now living “paygo.”

Restaurants and groceries

Unless it is a special occasion we rarely eat out anymore. For lunches we either pack our own or take advantage of “fast food price wars.” We both really enjoy cooking and have the luxury of being able to eat dinner together every night.

For the cost of a simple relay switch we had our chest freezer repaired and now keep it stocked with items we find on sale (that we actually eat).

Appliances and utilities

This past year some appliances started having issues. In April our dishwasher started leaking Repairing the dishwasher was not cost-effective, so instead of replacing it with the same model, we purchased a very inexpensive one found during a “Mother’s Day Sale” and paid cash for it.

Our gas clothes dryer quit running. Instead of taking the dryer to the appliance repair shop, I decided to tinker with it myself. After an hour I realized that removing the motor from a gas dryer was a little more complicated than anticipated, so I put it all back together. I plugged it back in and it started working again! It has run just fine ever since.

The plastic handle on our trash compactor broke and was a safety issue. Another plastic replacement handle would cost over $75. I constructed a new handle out of leftover treated lumber we had. Sand, stain, varnish and add a white drawer knob and we have a solid wood handle, which looks beautiful and will probably outlast the trash compactor.

Heat pumps have a tendency to frost up in cool weather. Last year I noticed our heat pump was not cycling into the defrost mode. Instead of calling the HVAC repairperson, I studied the owner’s manual and researched on line via forums, blogs and discussion groups what could be causing the problem. As a result I purchased a new defrost card and heat pump thermostat and replaced them myself in less than 30 minutes. The heat pump has not frosted up since then and we saved hundreds of dollars avoiding a service call.

In order to save electricity, we installed dimmer switches and disabled half of the track lights in our basement. At most times during the winter we keep the thermostat at 70 degrees or less.

By shopping around for propane last year, we saved well over $500 by calling vendors and getting price quotes. Is there really a difference in propane between suppliers?


We like to contribute to charities, but it is difficult during tight economic times, so instead of giving cash, we give some of our time. For example, last June I volunteered as a Company Advisor for Washington Business Week mentoring high school students at Pacific Lutheran University for six days.

We purchased toys at Walmart for the November 2009 Port Orchard Chamber luncheon. 100 pecent of our gifts will go directly to children with nothing to “overhead and administration.”


In January we reserved a vacation rental cabin near Leavenworth for Oktoberfest and shared the cost with five other friends. We brought groceries from home and cooked most of our meals at the cabin as opposed to eating in town.


We quit exchanging gifts between each other at birthdays and holidays, but still buy presents for the young nieces and nephews.

We save receipts for nearly everything we purchase. This significantly increases our itemized deduction for sales taxes paid and is useful when returning or exchanging items.

We have placed on hold many home improvement project Items — like a new flat screen TV will not be purchased, even with the “super low prices.”

(Editor’s Note: Chris Mutchler is a CPA, and works for Southard, Beckham, Atwater and Berry and can be reached at (360) 876-4491 or cmutchler [at] sbabcpa [dot] com.)

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