How to Live Inexpensively

Whenever times get difficult -- either because of individual circumstances or a broader economic downturn -- it pays to tighten your belt and learn to live inexpensively. Many of us can cut back on our living expenses without too much difficulty, stretching our dollars further and making sure there's always enough in the bank account to cover our bills. It requires an eye on the bottom line and a little more care when managing your money, but once you get into the habit of it, it becomes much easier.

Instructions

1. Draw up a monthly budget for your household. Save receipts of everything you purchase and add them to your monthly bills. Break them down by category (grocery bills, mortgage, car bills, utilities, etc.), then compare them with the amount of money you're bringing in every month. That should give you a basic idea of how much you need to save and where you can make cuts.

2. Shop frugally. Grocery expenses are one of the best places to cut down on expenses. Reduce the number of frivolous groceries you buy and focus on inexpensive yet filling meal plans. Shop around and look for places where you can buy the same groceries cheaper: stores like Costco and Sam's Club offer excellent discounts on groceries purchased in bulk.

3. Reduce unnecessary expenses. Magazine subscriptions, book club memberships, even the cable bill can be dropped in order to save money. When going through your budget, be ruthless about the things you need versus the things that are simply nice to have, and learn to say "no" when you need to.

4. Cut down on your entertainment costs. Reduce restaurant trips to an absolute minimum, eating at home instead of going out. Brew your own coffee in the morning instead of stopping at Starbuck's. If you go to the movies a lot, wait and rent them on video instead of paying $10 a seat at the theater (most movies arrive on DVD within four months of their theatrical release). You'll be shocked how much money you'll save.

5. Use care and discretion when driving your car. Keep it tuned up and try to drive it as little as possible. Look into carpool options when driving to work or consider public transportation. Combine errands into a single trip, or see if you can fulfill errands by walking or biking. (Many bike shops sell trailers that let you haul groceries and other supplies.) You'll cut down on gas expenses as well as costs of repairs, new tires and the like.

6. Drop your utility expenses by saving energy. Turn off lights when they aren't in use. Close the doors to your house and consider heating or cooling single sections of the house only. Use cold water to do your laundry and let your clothes air dry instead of running the dryer. It will keep your bills in check.

Tips & Warnings

• Just for fun, try saving your loose change in an empty mayonnaise jar. Count it up every month and see how much you save. Many grocery stores offer CoinStar and similar services that let you turn them into dollar bills, which you can then use to purchase groceries.