How to Cut Expenses and Live More Frugally

Many people have felt the bite of an economic downturn; maybe you've been laid off or had unexpected medical bills. Maybe you just want to figure out how to send your kids to college on what you make right now. Whatever their situation, most people could stand to cut their expenses and learn to live a bit more within their means.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Detailed record of all expenses for 3 months
• Willpower
• Creativity

Evaluate Your Situation

1. Document every dollar you have spent for the past 3 months. Divide the total by three to figure out what you are spending on average for each item on your list.
2. Look at your monthly expenses and evaluate which items fulfill actual needs (for example, food and shelter) and which represent wants (eating out, going to movies).
3. Figure out alternatives. For example, if you have a car for every driver in the household, maybe you could manage with fewer if you use public transportation, carpools or a bicycle.

Budget Your Money

4. Make a budget. See the related eHow titled "How to Set Up a Family Budget" for more information about developing a budget that works for your household.
   
5. Stick to your budget. (This is harder than it sounds.) One good way is to pay cash for everything, either directly or by using debit cards. See the eHow, "How to Live Within Your Budget" for some tips on this topic.
6. Monitor yourself. Use debit cards and online banking, if possible, to keep careful track of how much you spend. Even a pencil and paper list will do; write down the exact amounts and keep a running tally.

Cut Your Expenses

7. Look for deals. Buy the least expensive product you can live with, if it doesn't have to last (like food). Clip coupons—but only for items you would be buying anyway and only at stores that give the best deals to begin with.
8. Make or grow food rather than purchasing costly pre-made or pre-mixed food. If you have space, plant a vegetable garden; even window boxes can hold quick-growing spices that will liven up your budget meals.
9. Recycle and reuse what you can. Remember the old maxim: "Use it up, wear it out, make it do or do without." They are words to live by—frugally. Your local Freecycle group can help you find things you need.
10. Look for food-buying clubs, co-ops and bulk discount offers from groups in your area to help cut your food expenses.

Lift Your Spirits

11. Keep your Internet service if you can, even if you don't keep your cable television or long-distance services. The Internet provides entertainment, news, communications and many ways to save money and find resources.
12. Check out what free programs your city offers. In addition to parks and bike trails, your city may hold free festivals, art exhibits and other fun activities year-round.
13. Visit your local library to find free entertainment and resources in the form of books, movies, story time, Internet access and more.

Tips & Warnings

• Try to look at your expense list from your creditors' point of view. Or pretend the list belongs to someone else. Think about what you'd advise a friend to cut out.
• If you find you have to spend extra on one item, cut that amount from some other expense.
• Plan your meals ahead of time and buy only what you need. You'll be less tempted to overbuy if you have a list of these items.
• If you have a microphone and speakers (or can afford an Internet phone), you can use free Internet calling services such as Skype. Email can also keep you in touch with faraway family and friends.
• If you are in serious financial straits, don't go it alone. Get all the help you can. Many government and charitable programs are in place to assist those who need it.