Cutting Your Spending

Where are some good places to look for spending cuts in terms of food costs?

Well, the biggest thing with food costs is the restaurant meals - the meals away from home. I think most American families would find that, that is just an enormous leakage of cash. So if you could eat out just one night a week instead of three nights a week, or if you could go to a less expensive restaurant, that's where you're going to save the big bucks. Or, if you're going to go out, use the coupon books - you know, the entertainment coupon books that you can get, and go to those restaurants. People who use those really swear by them. Of course, that doesn't mean you eat out seven nights a week, but it means you eat out judiciously. Another thing is to shop at a big-box store or shop in bulk if you can, if that makes sense for your family. That really saves you a lot of money in food. I think those are the big areas when cost cutting with food.

Where are some good places to look for spending cuts in terms of housing?

The biggest money that you're going to save as far as housing is concerned would be if you were to refinance your mortgage and you would have lower payments. That would save you a lot of money. Also your homeowner's insurance. You should always shop around for policies just in general because you can often get good deals on policies but if you raise the deductible on your homeowners insurance that can save you a lot of money. Another thing is look into the energy cost that you're house in consuming. Have an energy audit done. Your local utility will come and do an energy audit for you and tell you where you can save money. You can have your thermostat adjusted automatically. That's a really good way to go. So between saving money on your house payments and your insurance and then also on your energy cost, you can really save a lot.

Where are some good places to look for spending cuts in terms of transportation?

If you're going car shopping, look for a car that's being sold at the end of the model year. You're probably going to get a good deal on that. Look for a used car, one that's coming off lease; you could probably get a nice car that's coming off lease. Another way is to simply buy a very fuel-efficient car. You're going to save a lot of money on gas mileage. This isn't necessarily a hybrid car, which might actually cost a little more up front: you can save hundreds of dollars a year on your gas costs just by using a plain old fuel-efficient car that gets good mileage. Insurance is a big area. Always shop around for your car insurance. If you raise your deductible, again, your premium is going to go down. And you may be entitled to all sorts of discounts. If you have your homeowner's and your car insurance with the same company, you could be entitled to a discount. If your teenage child goes off to college you could be entitled to a discount. If your teenager gets good grades you could be entitled to a discount. Take advantage of them all.

Where are some good places to look for spending cuts in terms of clothing?

Clothing is interesting. Consignment stores, shopping at consignment stores, or used clothing stores and certainly low-cost but trendy retailers is a great way to save on clothing costs. But I think the biggest problem with clothing costs is the impulse expense. So I think you have to play psychological tricks on yourself to keep yourself from going overboard at the trendy discount stores or at the consignment stores. There are a couple things you can do. You can give yourself a cooling-off period. Like if you're trying to decide whether you should buy something, give yourself a twenty-four hour cooling-off period; say "I'm gonna come back tomorrow". If I still want it, I'm going to get it. If not, then I've saved myself some money. Another strategy is, if you're using your credit card and you're making charges on the card, note those charges down in your bank account as soon as you get home, so that you are actually keeping track of how much money you're spending throughout the month, and it doesn't come as, "Oh, my gosh, I spent $2,000 at the bargain consignment store this month." Which isn't a bargain after all. So that's another cool thing to do. Just play these little psychological tricks on yourself. Then of course the classic one is to put your credit cards on ice, you know, freeze them in the freezer so you can't use them, or at least you have to wait before you have to use them.

Where are some good places to look for spending cuts in terms of entertainment?

Entertainment is kind of interesting because of course Netflix and popcorn at home is always going to be cheaper than going out to the movies. But entertainment is such a personal thing, it's going to - it depends on what you want to do. I mean, look around your hometown, you know, have a picnic in the park, take advantage of museums, that sort of thing. What is it that you like to do? Use the coupon books, the entertainment coupon books that might give you discounts if you go to the theater on a certain night, or if you eat out on Wednesday night instead of a Friday night. Look up those kinds of things, and don't always think that entertainment has to be really expensive. Because again, a nice little candlelit dinner and a movie at home, can't beat that.

Where are some good places to look for spending cuts in terms of vacations?

There's a nice little website called kayak.com which tracks airfares. So if you're looking for airfares, what it will do is search airfares at a lot of different sites for you. If you're looking for a low cost airfare, that's one way to go. If you're taking a trip to an expensive location, for example you want to go to Europe, abroad, even if you want to go in this country, consider doing a house swap instead of paying expensive hotel bills. People who do this really swear by it. They save a lot of money. They cook in, which helps a lot, plus you get to perhaps meet someone who lives in a different country and live like the real folk do. That's another interesting thing. Have a frequent flyer card. A lot of people complain of course, that you can't always get to fly with the frequent flyer miles when you want to, but if you build up the miles and if you're flexible, and if you know what the terms of the card are, you can get some really good deals with airfare that are still available. These are good ways to cut spending when booking vacations.

Where are some other good places to look for money to pay down debts?

Well one thing is you want to maybe redo you're W-4 form. Which is the form on your tax form on which you claim a certain amount of exemptions. If you claim more exemptions that means more money in your pocket; and you would rather have it in your pocket then giving it to Uncle Sam, you know. So that's one way of getting more cash in your pocket. Also, just making sure that you're claiming all of the tax deductions that you're entitled to. Those things can all really add up to hundreds of dollars you know, real money. Insurance is always a good way of or a good area in which to save money. Life insurance, for example, the rates on life insurance have just keep, for the last decade they have just keep going down, down, down, down. So if you just keep half life insurance but you haven't bought it in a few years; chances are you can get a much better deal on that. Also, cash back credit cards. Instead of fooling around with frequent flyer miles or some other rewards program, just get a card that gives you cash back for the money you spend, and then you can use that to paying off other debts. Buying and selling online. You know selling things that you don't need online or shopping online. Google has a function called Froogle which actually does internet comparison shopping so that you can see what different site, if you're looking for a particular product you can actually compare prices online and that's really a good way to go to get the best deal.