Cost-cutting Strategies
Smart Money Management

In these times of economic change and job uncertainty, many people are taking a closer look at how they spend their money and ways to cut expenses.

We sometimes associate cutting costs with making things from scratch or searching for the best bargains. While these strat-egies do save money, most of us don’t have that kind of time. But there are ways to cut expenses that don’t require hours of extra work every week.

Cutting Costs
If you’re interested in reducing your spending, it’s helpful to take a look at the whole picture: planning a budget, examining your attitudes and awareness about money and getting the whole household involved.

Plan A Budget
Keep track of all that you spend for two months. Almost everyone who has done this is surprised at how much they spend in certain areas. When you know where your money is going, you will be better able to make decisions about where to cut back.

Set short and long term financial goals and keep these goals in mind when you’re tempted to buy impulsively. And don’t forget to reward yourself in little ways for reducing your spending.

Examine Your Attitudes About Money
Consider these questions:

• Are you always trying to keep up with your friends and neighbors?
• Is shopping one of your main recreational hobbies?
• Do you often spend beyond your means?
• Do you look at advertising with a critical eye?
• Is your spending consistent with your values?
• Do you prefer using credit to using debit or cash?
• What messages are you sending your family and friends (intentionally or unintentionally) about money?

Involve The Whole Household
Have a family meeting and try to reach consensus. This can be a good learning opportunity for children: managing and learning about money is an important life skill. Starting at the school-age level, there’s a lot that children can learn from these discussions.

Spending Less For Food
There are many ways to cut food costs without cutting out nutritional basics. Some of these suggestions promote healthier eating as well as eliminating expensive eating habits.

• Buy generic or store brands if the quality is acceptable. Sugar, flour, salt, bleach, vinegar and ammonia are safe bets.
• Buy perishable foods in season. They are less expensive and they’ll be fresher. If space allows, freeze items.
• Buy in bulk. If you’ve got the room to store extras, you can benefit from economies of scale.
• Cut down on eating out. More than 30 percent of the average American’s food costs are incurred in restaurants, snack bars and fast food places. When you do eat out, try eat-ing out for breakfast, lunch, or catching an "Early Bird" special for dinner.
• Pack your lunch and snacks for work. Eating out during your workday is a common budget-buster that "eats away" at your disposable income.
• Try "cooking for the week." Prepare and freeze a few of the week’s meals on weekends, so you’ll be less tempted to buy convenience foods when you’re too busy (or tired) to cook.

Shopping Purposefully

• Make a weekly shopping list. That’s easy–the hard part is sticking to it. Try to shop just once a week.
• Consider joining a warehouse club. First check the prices at your usual store to make sure that there is enough of a price difference to warrant a membership fee and an extra trip.
• Pay attention to unit pricing. Packaging can be deceptive. Take a calculator to help you figure out the best buy. Become aware of the going rate for items so you will recognize a bargain when you see it. You cannot believe the sales jargon; these days almost everything is "on sale" or a "special purchase."
• Try out second-hand and/or consignment stores for clothes, furniture and household goods. Consider taking your unneeded items to a consignment store.
• Try to make major purchases when the items you need are really on sale. Or, look in the classifieds for major appliances, equipment and furniture. It’s easy to find great bargains, and many items are almost new.
• Pay with cash instead of credit. Interest payments add up over time.
• Buy clothes that don’t require dry cleaning.

Conserving Energy
Get a free energy audit. Almost half your energy bill goes to heating and cooling your house. Call your local utility company for a consultation from a conservation specialist. There is usually no charge and they can give you the best advice for your particular situation. These are some standard tips:

• Keep your thermostat at 68 degrees in winter.
• If you have a fireplace, make sure the vent to the chimney is closed when you don't have a fire, to cut off the flow of cold air from the outside.
• Bake breads, cakes, cookies when the oven is already hot (as for dinner) so you don’t pay for heating it twice.
• Install a thermostat timer so that you won’t be heating the house when you’re not home or asleep at night.
• Install blinds and curtains that help regulate heat.
• During the hot summer months, hang your laundry on a clothesline instead of using the dryer.
• Use water sparingly. Hot water is the second largest contributor to your energy bill.
• Use cold water for most laundry loads.
• Install a flow regulator in your shower heads.
• Fix any dripping water faucets and "running" toilets.
• Re-cycle: It will help conserve energy and may lower your refuse pick-up fees.

Recreation
Avoid shopping as recreation (sometimes known as "retail therapy"). Find less expensive alternatives. For example:

• Walk in the park
• Exercise
• Fly a kite
• Attend a free outdoor concert or craft fair
• Visit friends
• Throw a potluck dinner party
• Take advantage of free days at museums and other attractions
• Enroll in low-cost, accessible adult education classes at your local school or community center.
• Check-out the offerings at your local park and recreation center for hiking/biking paths, free exhibits, outdoor excursions, etc.
• Re-evaluate the benefits of subscribing to specialized cable T.V. For the cost of cable, you can rent a few movies every month and see what you want to see, when you want to see it.
• Use the library. A love of reading is one of the greatest gifts you can give your children. As adults, lifelong learning becomes more important in our ever-changing world. Many libraries also offer books on audiotape and pre-recorded movie videotapes. You may be able to cancel a magazine subscription or two by checking-out periodicals at your local branch.
• Purchase a membership to an activity that you visit often such as the zoo, science museum, or the "Y."
• Go to bargain matinees. It’s half the price and there are shorter lines. Attend local theater productions.

For More Information
Contact us for additional information on financial issues such as:

• Teaching your children about money
• Tax tips for parents
• Saving for college
• Stretching your food dollar
• Estate planning
• Financial planning/budgeting
• Resolving family conflicts about money
• Special considerations for single parents, stepfamilies and custodial grandparents
• Bibliographies on financial issues

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