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Personal Finance > Saving and Spending
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15 ways to live more cheaply
graphic November 29, 2001: 9:54 a.m. ET

You can curb spending without skimping on pleasure.
By Jeanne Sahadi
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  • Bang for your holiday buck - Nov. 20, 2001
  • 5 fast, inexpensive ways to winterize - Oct. 23, 2001
  • Debt overload: 5 red flags - Oct. 8, 2001
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  • Frugal Fun.com
  • Cheapskate Monthly
  • New Road Map
  • Money 101: Controlling debt
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    NEW YORK (CNN/Money) - The opportunities to run short on cash seem to grow exponentially as your life grows more complex. Whether you've just been laid off, had a new baby, bought a house or are paying dearly for past sins, you're feeling the pinch.

    The good news is there are some easy ways to pocket more money without compromising real pleasures or cutting out too many conveniences.

    Here are 15 ideas from leading frugality experts. Using just a few, however, can make for significant savings.

    Shop sparingly: Ever go to a mall thinking you'll buy one thing then just browse and see what else you need? Welcome to the crowd, said Vicki Robin, coauthor of Your Money or Your Life. Much of the shopping we do is what she characterizes as frivolous shopping. "It's a huge money sink. It's what we spend unconsciously, habitually, impulsively," she said. It's better to keep a running list of what you need, and shop only when the tally is long enough to justify the trip. If you shop with friends for entertainment, consider other enjoyable diversions, she said: Go out for tea, take a walk together or have each other over for dinner.

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      Give creatively: You can "express love twice with one gift" this holiday season by giving a donation to a favorite charity in the names of friends or family members instead of buying them something, Robin suggested. You and the gift recipient have the satisfaction of knowing the money is being used for a good cause; and you get to take a tax deduction if you itemize. If money's really tight, consider giving "time coupons" - i.e., your time for a service, such as a series of weekly half-hour massages, suggested Shel Horowitz, author of The Penny-Pinching Hedonist. If you do plan on buying gifts, set price caps that fit your budget and stick to them. There are plenty of satisfying gifts under $25, Horowitz said, and even more so this year given that retailers are offering deep discounts.

    Get groceries for the long haul: The most expensive thing you can do is shop for food you need this week, since you're likely to pay premium prices, said Mary Hunt, founder and editor of the newsletter Cheapskate Monthly. Her suggestion: Except for food that spoils easily, shop for foods and staples when they're on sale and buy enough for several weeks' worth. For emergency short-term savings, she suggests skipping grocery shopping altogether until you have used up all the food that's been sitting in your house for weeks.   

    Use cash to pay for food: Hunt also recommends paying for food with cash. "You're a smarter shopper when you go into the store with $30 in your pocket," Hunt said. Debit cards, which draw money directly from your bank account, are a bad idea, she said, since they make more money available to you than you need and encourage impulse purchases.

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    Clip (some) coupons: Coupons are great when they're for products you regularly use and when they make those products less costly than the generic brands, Horowitz said. But buying something you don't need just because you have a coupon is a waste of money. So clip judiciously.

    Curb long-distance bills: Cancel your long-distance service and get a prepaid phone card instead from one of the wholesale price clubs, such as Sam's Club or Costco, Hunt suggests. You'll save on fees, cap how much you spend on long-distance calls and get some of the lowest per-minute rates - often with fewer restrictions than those imposed by calling plans. At Sam's Club.com, for instance, you can buy a 500-minute AT&T card for $17.35. At Costco.com, you can get a 575-minute MCI card for $19.99. In either case, you're paying about 3.5 cents per minute.

    Turn clothes to cash: Clothes you don't like, furniture and appliances you never use and that Star Wars memorabilia even you've grown tired of -- all probably have cash potential, despite the mean things your spouse says about them. Try any of the following: Donate them and get a tax-deduction; post them to online auction sites; sell them to consignment shops; or have a garage sale.

    Keep yourself entertained: Don't want to forgo dinner parties? Host a potluck supper. Dying to go to the theater or to a major sporting event? Volunteer to usher and see the event for free, Horowitz said. If you're crazy for books, magazines and CDs, visit your public library, where you can get all that and more for free. Libraries also may offer interesting lectures and entertainment for little or no admission fee.

    Drive a car you can afford: Contrary to public opinion, you are not what you drive. You may need a car, but you probably don't need the hippest, priciest model. Consider this, Robin said: There are 2,000 work hours in a year, assuming an eight-hour day and 50 weeks of work. If you buy a $20,000 car, you'll spend $5 of your net wages every hour for two years to pay for that car, not including interest payments. If you do hit the showroom, be sure to bargain, Horowitz said. He bought his last car seven years ago for $2,500 below sticker price because he told the dealer he could get a Saturn model for less but that he would buy the dealer's car that day if the dealer could match the lower price. The dealer took the bait, charging Horowitz only $150 more than the Saturn cost.

    Take in a tenant: Renting out your finished basement or spare room may make the difference between keeping your house or losing it when you're really squeezed for cash, Robin said. But be sure to get references and establish a trial period during which you may ask the person to leave if it's not working out, Horowitz said. Besides the income, there's another potential upside to having a tenant: You may make a new friend.

    Let your credit card pay you: If you pay your credit card bills in full and on time every month, be sure to have a card that rewards you for your purchases, Horowitz said. Some, for instance, offer frequent flyer miles or cash back.

    Share and share alike: Look for ways to share common expenses with others, Robin and Horowitz said. For instance, if you have young kids, consider trading babysitting services with other parents in your neighborhood, or carpool to work.

    Conserve energy: There are lots of cheap, energy-saving tricks that will cut your heating and electricity bills. Among them, Horowitz said, put rope caulk around your windows and get outlet protectors - the kind designed to prevent 2-year-olds from sticking forks in sockets. They'll cut down on drafts and prevent heat leakages. For other energy-saving ideas, click here.

    Exercise for free: Unless it's your greatest pleasure, a health club membership can be a pricey way to sweat, especially if you go infrequently. Consider forgoing the monthly expense, and go hiking or biking on your own instead, Horowitz suggested.

    Forgo some "optionals:" Lattes in the morning and lunches out. Hiring a gardener and housekeeper. Getting your nails done. All are enjoyable indulgences when you're flush with cash. But during tough times, the little luxuries may need to go. Hunt recommends looking at the money side of your life like a business. Temporary belt-tightening may be required but don't get discouraged, Hunt said. "It doesn't have to be forever." graphic

      RELATED STORIES

    Bang for your holiday buck - Nov. 20, 2001

    5 fast, inexpensive ways to winterize - Oct. 23, 2001

    Debt overload: 5 red flags - Oct. 8, 2001

      RELATED LINKS

    Frugal Fun.com

    Cheapskate Monthly

    New Road Map

    Money 101: Controlling debt





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