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Cost-Cutting Tips

Small changes to your budget could mean larger bills in your wallet.

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— Beau Lark/Corbis

Meals and Entertainment

Many of us love to eat out, whether it’s the daily breakfast at a pricey coffee shop or fast-food meals. Think about where you’re eating and what it’s costing you. Regularly bring your lunch to work and home-cook your meals for dinner to reduce food expenses. Movie fans can save money by renting DVDs and making popcorn at home. 

Household and Transportation Expenses

Cable television, house and cell phones, and Internet service can add up to a tidy sum every month. Compare phone plans if you’re in an area with more than one provider to ensure that you have the most economical plan available. 

Do an energy review of your home. Energy costs are climbing and will probably continue to do so. Fix drafty windows and doors with weather stripping, insulate them with blinds or curtains and, during the colder seasons, turn down the thermostat by a couple of degrees. Consider solar heating and cooling if such a system is feasible where you live. If you have central air, try to use it less. Install ceiling fans in some rooms so you don’t have to cool the entire house. During the summer, avoid using the clothes dryer, dishwasher and other appliances during peak hours so as to lower your energy bill. 

Your biggest transportation expenses probably come from one or more vehicles. Here are some ways to cut back on those costs:

  • Carpool to work with neighbors or colleagues.

  • Talk to your insurance company about ways you can lower your rate.


Thoughtful planning before you shop is a good way to reduce expensive impulse buying. Whether you’re going to the grocery store, shopping for holiday gifts or looking for a new pair of shoes or a party outfit, make a list and decide what you can afford to spend ahead of time — and don’t buy something unless you really need it.

Health Care

As health care costs spiral higher, they become a larger part of almost everyone’s budget. To minimize your costs, review what you spent on health care and insurance last year so you can make sure you choose the coverage that’s best for you and your family.  Whether you have a choice of plans offered by your employer or buy your own insurance on the open market, calculate which deductible works best for you. If you and your family are relatively healthy, a higher deductible may be the most economical choice. 

Also, see if you can save health care costs by following these tips:

  • Learn if your health insurance offers a mail-order system for prescriptions. It’s usually cheaper than buying directly from the drugstore.

  • Note the anniversary date of your insurance before scheduling routine medical appointments or tests. For example, your insurance may require you to wait a full calendar year between mammograms. If you schedule a mammogram even a day or two before the end of that year, the insurance may not pay for it.

  • If you know you’ll need several appointments or tests that are definitely not urgent, consider waiting until you choose your insurance for the next year. Then take a lower deductible so that you’ll get more of the costs covered.

Next: Luxuries and Unnecessary Expenses>>

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