Choose your neighborhood carefully.
When New Yorker Yasmin Moorman finished her MBA and law degrees at Columbia University, she landed a job that paid her well enough to live in the tony Upper West Side. But rather than forking over more than $2,000 a month for a shoebox apartment, Moorman chose a fiscally smarter path: She moved to a much cheaper place in nearby Brooklyn and squirreled away hundreds of dollars a month for five years. Then, she used that savings to purchase her own converted, one-bedroom apartment in uptown Manhattan’s Hudson Heights. “By living uptown, I’m giving up some ease of commute,” says Moorman. “But I’m also saving more than $1,000 a month and living well within my means. I’m a firm believer in this rule: Your rent or mortgage payment should be no more than a third of your income.” By keeping a lid on her housing costs, Moorman, who is now looking for a job, has been able to survive comfortably on her savings. The Bureau of Labor Statistics reports that Americans typically spend a larger share of our incomes (30 percent) on housing than those in, say, the UK and Canada (24 percent) and Japan (22 percent).
Make your talk cheap.
The Wall Street Journal reports that even as Americans have cut spending in areas like entertainment and dining out during the economic downturn, their spending on telephone service has crept up. Between 2007 and 2011, the Labor Department shows that the average household’s annual spending on cell service rose from $1,110 to $12,226. When Gloria Hwang's monthly cell phone bill jumped last year, she found a way to bring it back down to earth. “I chat with my friends for free on Skype and Google Talk,” says Hwang, who lives in San Francisco. By opting for these services, she was able to reduce her monthly usage and thereby slice her bill by a third.
In a 2012 survey conducted by Coupon Cabin, 20 percent of mobile phone owners pay more for their phone service than they do for groceries. Meg Favreau, senior editor at Wisebread.com in Los Angeles, offers tips on how to slash your bill: “Consider getting rid of a land line if you have a cell. Yes, a smart phone may be the coolest new gadget, but if a cheaper phone works for your lifestyle, it could save you hundreds. Finally, read the fine print on your phone plan — you may find that you’re not using all of the features or minutes in your package, or that you’re consistently paying large overage fees."
Take a bite out of your food budget.
Chew on this: You don’t need to spend hours clipping coupons to nab savings at the grocery store. “So many bloggers now do the legwork for you,” says Crystal Paine, a mother of three and the woman behind MoneySavingMom.com. “Find a blogger who specializes in the stores in your area — I check out Denverbargains.com. Try typing in ‘coupon matchup’ or ‘deal blogger’ into your search engine to find a blogger who’s rounding up the best deals for you.”
Once she has made her shopping list, Paine also visits an online coupon database that will generate a list of coupons for the items on her list. Paine buys in bulk and freezes, especially when she finds items on sale. “On the weekends, I spend an hour preparing food to freeze: I may marinate a quadruple batch of chicken, divvy it up into four different freezer bags, and then whip it out when I’m ready to put it in the crock pot or throw it on the grill.”
Become a swapper.
Jessica StewartMaize of ThriftyFun.com suggests setting up a holiday swap party with your pals. “You can swap the ornaments and lights for an entire themed tree [all white, for example]," says StewartMaize, who lives in Portland, Oregon. "Or you can offer up decorations that you are tired of or no longer wish to keep.” And the swapping can go far beyond lights and wreaths: Penny, the creator of pennilessparenting.com, attends clothing swaps during which she and others trade their old clothes for a whole “new” closet; she says she has received clothes that are worth hundreds.
Another idea: Barter your skills. “I’m a photographer,” says Anna Newell Jones of Denver, “and I asked my hairstylist if she was up for a swap. She was: I got a cut and color in exchange for shooting an event for her.” The total for the hairstyle would’ve been about $210, says Newell Jones. “Bartering can be tricky sometimes because it's usually not an exact trade,” says Newell Jones. “The most important thing is being upfront about what you are and aren't ok with. Nobody wants to leave the exchange feeling jilted.” You don’t necessarily have to be a pro in order to offer a skill that has value for others. “You may simply have a great eye for interior decorating,” says Newell Jones, “and someone may want to trade with you.”
Take back your power.
Are your utilities bills inching up? Get the kids involved in cutting. “One mom [I know] showed her two sons the meter of how much electricity they were using,” says Paine of MoneySavingMom.com. “She told them that if they could help her get the energy usage down, she’d give them half of whatever they saved.” The strategy worked: The following bills were about 20 percent lower. “Setting up a reward system is a great way to get your children interested in saving money,” says Paine. Other power moves for slashing your utilities bills: Use the dryer sparingly and instead hang your clothes out (“The dryer is one of the home appliances that cost the most to operate,” says Paine); install weather seals to block air leaks; and adjust your thermostat up or down (depending on the season) during the overnight hours.
Click your way to savings.
Online retailers such as Amazon.com offer consumers a subscribe-and-save program that you can use for products you order regularly. “If there’s a certain lotion you always use, Amazon will send it to you at regular intervals that you select,” says Favreau of Wisebread.com. “In exchange, you get a discount on that item’s sales price.” And the online savings don’t end there: You can save for college or pay back student loans through Upromise.com, a rewards program administered by Sallie Mae; before you make a purchase. Also, look for online coupon and promo codes at sites such as retailmenot.com; or try a cash-back shopping site such as ebates.com, which makes deals with hundreds of retailers and then passes on part of the commission sales to you.
Be picky about your purchases.
Anna Newell Jones of andthenwesaved.com was once a clothes-a-holic: Every season, she bought racks of the latest fashion fads. That’s exactly how once she found herself more than $23,000 in debt. So she put herself on a year-long “spending fast” and paid off about $18,000 of her debt; the following year, she moved onto a “spending diet,” she paid off her remaining debt and built a savings. In order to stay on solid financial ground, Newell Jones has adopted a personal policy: She opts for quality over quantity. “I’ll pay more money for one thing that I really want and will wear all the time because I’m not constantly replacing the item."
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