How Do You Save Money in Tough Economic Times?

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The Consumer Federation of America recommends saving money by avoiding impulse buys; limiting unnecessary conveniences, such as entertainment memberships; and researching lower rates on essential purchases, including auto insurance, prescriptions, utilities and phone services. Tracking monthly spending habits helps consumers develop a cost-saving budget and identify repetitive purchases that quickly drain bank accounts.

Establish a personal grace period to evaluate questionable purchases, and avoid relying on credit or overdraft protection, the CFA states. Waiting gives consumers time to think over the financial consequences of a purchase and consider redirecting those funds to bills or savings accounts. If credit or debit is the only option, pay off as much of the balance as possible to prevent interest charges and late fees.

Ask about discounts and reduced rates for must-have services, and consider downgrading to the basics Thoroughly compare the out-of-pocket costs and premiums for auto, home and health insurance, and request an energy audit to lower utility bills. The CFA suggests making small adjustments, such as switching to generic prescription drugs and lowering cell phone data plans, to save hundreds of dollars over the course of a year.

Make a list of rarely used subscriptions and costly indulgences, and look for opportunities to scale down, the CFA states. Instead overspending on magazine subscriptions, concerts, sporting events or movies, take advantage of free or inexpensive local entertainment and libraries. Substitute homemade foods for expensive lunches and coffee, and bring a shopping list to stay focused at the grocery store.