First, create a budget. Most people don't have budgets. They think of them as diets, hard to follow and not much fun. But having a budget, knowing where your money is going, knowing that you're on top of your finances is very empowering. So create one and to follow it. Take a couple months, track everything that you spend. Write it down in a journal. It will be enlightening. You'll see where you're spending and where you can cut back.
Also, use the web to help. There are lots of free web sites out there that can help with household budgeting. Mint.com is a good one. It can help you track your investments, like your 401(k) as well as create budgets for specific expenses like groceries. Another good web site is one called Wesabe, which also offers all sorts of budgeting tools and let's you see stats on other people's budgets. The idea is that you can see how other people are managing their money and learn from it.
And now is the time to cut grocery bills. Groceries are obviously a big part of any household budget, and a big way to save here is to go generic. It used to be that generics were cheaper and you knew why: they weren't good. But today you can save as much as 50% off of the band names and often not notice a difference in quality. One really good category for this is over-the-counter medications, like aspirin. Today there's even generic organics, on items like milk, which is a great way to save, because organics aren't cheap.
Also, cut household bills. Now is the time to review your phone, cable and internet plans. Chances are you're wasting your money on something. You may be consistently paying for cell phone minutes you never use. You may be paying for cable channels you never watch. Maybe you're ready to ditch your landline and go cell phone only. A quick review could save you serious money.
And finally cut your winter heating costs. Thanks to spiking fuel costs earlier this year, the average U.S. household will spend an additional 15% on home heating this winter. So now is the time to install that programmable thermostat. Set your thermostat just one degree cooler for an eight-hour period each day during the winter heating season, and cut your bill by up to 5%. You also want to get some calk and plug up any small leaks that are letting your heat escape. One afternoon of handiwork can pay off big over the next several months.
by Stephanie AuWerter