How to Cut Your Household Budget Painlessly

If your household income seems to come up short every month and you can't figure out where the money is going, look closely. You will likely find that money is leaking away in small and large chunks on items that you do not need or on items that can be found for less.

Things You'll Need

• Computer
• Note Pad

Instructions

1. Get a printout of your most recent bank statements, credit card statements, mortgage statements, utility bills, etc and spread them out on the table. Grab your calculator and pencil. You're about to hunt for savings.

2. Look for the hidden vampires that are sucking your wallet dry. A few examples:

   Magazines that you don't read any more but which are automatically renewed each year. Make that anything that is renewed automatically and give it a close look. Do you really need that "plus" e-mail account at $19.95 or that subscription to "Scrapbook Monthly?" Start calling and clicking and deleting these options.

   Phone service: The phone company IS ripping you off. If you have access to cable broadband then consider a service that gives you unlimited long distance (VOIP it's called) over your high speed internet. You'll have to set up your 911 address but that's not hard and the quality is just as good as Ma Bell. Savings: Around $30 to use unlimited calling each month, depending on who you call. Do you really need to surf the internet on your phone or do you just use email? If so get rid of $20 or more for broadband access on your phone. If you work for a major company, you can likely get a discount on major cell phone carriers by logging in or calling customer service and entering your work email as proof of employment. Savings: $5 to $10.

   If you can get by getting the news off of your internet home page but don't want to give up the paper completely, call and downgrade to the Sunday edition only. Savings: $20.00 (There's tons of store coupon's in the Sunday paper but we'll get to that later).

3. Check your entertainment costs. How much is your cable bill? Are you paying for movie channels that you only watch once or twice a week because they are full of reruns? Ditch the premium channels to save $20 to $60 per month. Consider a movie rental subscription such as Netflix instead.

   Cancel the satellite radio service, especially if you have an iPod. Savings: about $13 per month.

   Share an internet connection with a neighbor. If one of you sets up a Wi-Fi spot that both of you can access, you can cut your bills in half.

4. Check your insurance coverages. Chances are your homeowner's insurance has a hefty discount, typically 15 percent, for having a home security survey done by your police department (they'll usually do it for free) and another 5 percent for a monitored alarm.

   Get a full coverage review and make sure you do have enough coverage. Penny pinching is not worth being homeless if your house burns down! Ask them what things can lower your rates. A metal roof and and proximity to a fire hydrant, for example, reduce rates.

   If your car has a factory alarm, ask if you are getting credit for it. Increase your deductibles and set aside a savings account for car repairs such as broken windows. It might sting to pay $1,000 for a dent, but it will keep your rates down by not reporting it.

   Also put any junkers you have on liability insurance only.

   Ask your auto insurance company how much their discount is for a driver education course. You can find one on line, spend $25 and six hours and save up to 10 percent on your auto insurance.

   If you have over 20 percent equity in your home and a recent appraisal, chances are you can get rid of the PMI insurance on your mortgage that is sucking $80 or more a month out of your pocket.

5. Check your automotive expenses. Determine how much gas you are feeding your large automobile. If it's more that $50 per week for normal commuting, you're in trouble and it's only going to get worse as gas prices rise. If you are getting 14 MPG in the city, find a car that gets 25 mpg instead. Find a used, (never buy new) gas miser and replace the guzzler. Savings: $20 to 40 per week or more.

   Keep your tires inflated and get a tune up. Underinflated tires cost you 1 to 2 MPG.

   Stop buying premium gas and buy regular. Most new cars do not need anything but regular gas.

   Carpool or use the bus if you can.

6. Go through your grocery and household expenses. Find an online coupon site that lets you print manufacturers coupons for the items you use each week and scan the Sunday paper. Those are little $1 and half-dollar bills free for the taking. Treat them like money and save $10 to $100 bucks a month.

   Determine if all the fancy throw away toilet brushes and spray cleaners are worth the money you spend. You can find endless sites for making your own cleaners to put in those spray bottles you normally throw in the trash that work just as good as the store brands.

7. Cut down on your utility use. Get a programmable thermostat. The new ones are easy to use and let you set the temperature slightly lower at night and while you are at work. Savings: Up to $50 or more a month.

   Replace light bulbs with compact fluorescents. You might have heard that they contain mercury. That's true, but only a small quality and not nearly as much as has been proven to be released burning the coal that is needed to power an incandescent bulb. Savings: $10 to $30 per month.

   Wrap your hot water heater and put foam pipe sleeves on the hot pipe coming out of the top. Get rid of that beer fridge in the garage. It's not worth $20 a month. If you have automatic sprinklers, install a weather sensor that can tell if it is raining before it turns on the system. Insulate drafty exterior doors and add insulation. There are local and national tax rebates out there for all kinds of energy saving expenditures. When they wear out, replace washers and dryers with front loading models. They use much less water and because the washer rings more water out of the clothes at high RPM, you don't have to dry them as much. The payback will be a couple of years but they get clothes cleaner too. It might pay to replace your old HVAC with a newer, high efficiency cooling and heating system. Look for a high SEER rating of 14 or better and you can see substantial savings. Systems that heat your home with just resistance coils and not a heat pump are energy vampires. This includes electric space heaters of any kind. Just turn one on and go outside and look at the meter. It may be cheaper to run a heat pump and heat a whole house than to run three 1,500-watt space heaters!

Tips & Warnings

• Keep checking your statements for vampire bills. Those are charges for things you do not need or use. Kill them one at a time!

• Consult an insurance professional before you change coverage. Don't get caught without enough coverage.