Refinancing when interest rates are low can help reduce monthly mortgage payments. When O'Connor refinanced, he opted to slightly increase his monthly payment so he could switch to a 15-year mortgage and make sure his home was paid off prior to retirement. For monthly savings, O'Connor drilled into his home maintenance spending. He cut $60 a month by stopping maid service and an extra $10 from regular home maintenance.
Food shopping is an area ripe for savings, since it's easy to overspend on name-brand pasta sauce, organic apples and prepared meals. O'Connor invested some time into comparison shopping and coupon hunting – on his first trip under his new regime, he spent 2.5 hours at the grocery store — but it paid off. "You spend 10 minutes walking up and down the frozen meat aisle looking for the special on frozen turkey breast," he says.
Subsequent trips, though, did not take nearly as long because he developed his system (and gained familiarity with the store's placements). He saved about $40 for the month, and he didn't feel like he was sacrificing much. "Store-brand tomatoes don't feel any different to me than premium," he says.
Still, it's hard to spend the time to maximize deals every week, O'Connor acknowledges, especially with two working parents. He and his wife have to skip their coupon-maximizing efforts some weeks, especially when one of them is traveling for work.
The biggest takeaway from O'Connor's $1,000 challenge is to focus on recurring expenses, because when you cut them once, you keep them off the books the following months, too. So if you do nothing else this month, make a few calls to your cable, Internet and phone provider.