7 Spending Cuts You Might Not Even Notice

With a weak recovery showing signs of faltering, it's time to prepare for more belt-tightening.

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It's painfully clear Americans are still hurting financially. Jobless claims are far too high if we're actually in any kind of meaningful recovery. Penalty withdrawals from 401(k) plans have been increasing, not shrinking. Mortgage rates are hitting 40-year lows with regularity and we still can't find a pulse in the housing industry.

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If there was a magic wand that would sharply raise incomes or reduce expenses, we'd be out there waving like mad. But that doesn't mean there aren't ways to cut and stretch. If you can afford it, give yourself some transition time to get used to spending cuts. Some will come at too steep a price in terms of your quality of life. But others may be painless, and you'll never look back.

1, Know where your money goes. This is my Number One Obvious Idea that many people don't follow. How can you possibly know how to save money if you don't know what you spend it on? There are a growing number of online budgeting sites to help you. Use one, or do this yourself. Whatever you've been spending each month, try cutting it by 5 percent. Then cut it by another 5 percent the following month. Keep it up if you can, and put the savings in the bank or pay down debts.

2. Make a grocery list and don't stray. Once you've tracked household spending, you will see how much you spend at the supermarket. What's less clear is that you also probably spend a lot of money on stuff you don't need. In our house, we began downsizing our grocery spending by seeing what we were throwing out and the items that had freezer burn and should have been tossed. This helped sensitize us to unnecessary purchases. (My mom passed away nearly 30 years ago and I can still remember her hollering at me about wasting food.) We also save money by making fewer runs to the store. Our greatest savings come when we make a weekly meal plan, create a shopping list for that plan, and then buy nothing but what's on that list.

3. Mothball a car. If your household has two cars, try leaving one in the garage for a month. See how it affects your life. With a modest amount of planning, a lot of households might be able to make do with a single car. Once you've determined that you can do likewise, sell the second car, bank the money, and also begin enjoying lower bills for auto insurance, gasoline, and maintenance.

[See Financially, We're All Conservatives Now.]

4. Try free phone service. I've bought and used the MagicJack service, which is the most popular of its type. You order a small device -- perhaps an inch and a half by three inches and about an inch thick -- and it connects to your home computer. The software that launches when you connect the device provides easy-to-follow instructions. MagicJack also links from the computer to your existing phone set. So, you are making your phone calls over the Internet but using a regular telephone to do so. I've found the audio quality higher than with products that require separate headphones and microphones. And picking up the phone is such a long-ingrained habit that there didn't seem to be much to learn. You do need to get a new local phone number, which Magic Jack will provide at no extra charge. After the initial fee, there is no charge for domestic phone calls. This switch can easily save you hundreds of dollars a year. Think about keeping your existing phone line for a transition period in case MagicJack or a similar device doesn't meet your needs. If you like the MagicJack and also have a cell phone, if could make sense to cancel your home land line and switch your home phone number to your cell. You'd lose your existing cell number but you'd at least be able to keep your old home number.

5. Trim television services. Hey, I love my cable, and millions others love their satellite dishes. But if the times demanded, I would wave goodbye to a bundle of monthly cable charges. I'd also be in mourning during football season but I'd survive. I would install a digital antenna. And I'd begin making much heavier use of free online video sites that the networks and other providers offer.

6. Recheck insurance rates. A year ago, I went out shopping to explore replacing all my insurance coverages. I wound up saving a bundle. When you've had your auto, home, life, and other insurance policies in place for several years, it's easy to forget what I call "creepage" -- those annual bump-ups in premiums. They really add up after a while. And while constantly rising health insurance rates may make it seem like premiums can only move in an upward direction, that's not true. When you do shop around, you also may discover that your coverage needs have changed. If your cars are the same ones you had five years ago, for example, you probably don't need as much collision insurance as you once did.

7. Forget about green; go brown! The summer has been brutal where I live. But with dollars at stake, I am becoming very environmentally responsible. So what if even the goats pass by my yard?

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