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Empowering your money

How to live within your means

At a glance:

  • How to save money on food

  • How to save money on clothes

  • How to save money on food shelter and transportation

  • How to save money on utilities

  • Summary of living within your means

  • Practical ideas you can start with today

In bad times, most families experience financial troubles to some degree. Even in good times, they may experience these troubles.

Let’s take a look at ways to make your paycheck go further in the major areas of expenditures: food, clothing, shelter, and utilities. Saving a little here and a little there can add up over time.

How to save money on food

Make a list

Rule #1 in not overspending is to make a list. Undecided customers end up buying things they don't need.

Use coupons

There are different levels of using coupons, or couponing. The first, and easiest, level is to use the coupons offered in the flyers from your local grocery stores. Usually, the flyers are mailed to you, but if not, they should be located at the store entrances.

Make sure you first obtain the store's discount, or rewards, card from the courtesy counter, because, with it, you may not need to cut coupons at all. If your area has more than one large grocery store, check all their flyers. You may have to go to more than one store to get the products you need at a discount, but be careful not to spend more on gas than you will save shopping the sales.

For even greater bargains, the next level of couponing combines store coupons with manufacturer's coupons. These are usually mailed to you or can be found in most Sunday newspapers. Keep them organized so that you can easily check what you have when you need it. Collect them so that you can buy more than one when the store has your desired products on sale.

For help locating coupons, use the Internet. There are sites devoted to coupons, such as,, and many, many others.

Finally, there are "super couponers," who are part of the growing group of shoppers practicing "extreme couponing." By checking all the store sales regularly and scouring the Internet to stockpile coupons for every item, you can save hundreds and hundreds of dollars on your monthly grocery expenses. You have to decide if it's worth the time and effort, however, as it will take at least several hours a week just to find and clip the coupons.

You also need the time to shop and the storage area to keep your great bargains. When they find a great deal and have the coupons they need to get it for pennies on the dollar, extreme couponers will buy many of that item, and may not need to buy it again for six months to a year. Their homes have been described as "mini marts." Volunteers at church food pantries sometimes employ this kind of shopping as, for them, it is well worth the time and effort.

A woman cuts coupons from the advertising section of the Sunday newspaper. (Photo: KAREN BLEIER/AFP via Getty Images)
A woman cuts coupons from the advertising section of the Sunday newspaper. (Photo: KAREN BLEIER/AFP via Getty Images)

There are many easy ways to cut your food bill. Try these:


  • Buy your food in bulk and cook in larger quantities. You can freeze any excess and use as needed.

  • Regardless of your family size, when it comes to meat, buy the "family pack" at your local grocery store. Use what you need and freeze the rest.

  • Keep an envelope with cash set aside for food.

  • Try to only go shopping on a full stomach to reduce cravings for items not on your list.

  • Buy store brands instead of national brands.

  • Print out or save coupons and use them while shopping. Focus on buying foods that are on sale.

  • Shop at the local farmer's market.

Eating and Drinking

  • Eat healthy foods; they will cut your cravings for junk food.

  • Make your own lunches and bring them with you to school.

  • Use a refillable metal water bottle rather than buying bottled water.

  • Set a limit on the number of nights per month that you can eat out.

How to save money on clothes

Consider nice used clothing

Consignment stores offer high-end clothing for a fraction of the cost new. You can either consign your gently used clothing and get a percentage of the price they sell for, or you can buy clothing from a consignment store, or both. Doing both gives you the greatest return, as it provides money in your pocket and reduced prices.

If you haven't worn an item such as clothing or shoes, or used an accessory, such as handbags, belts, scarves, etc., then consider a consignment store before donating them. If these items are gently used, definitely don't throw them away. You might as well throw away cash.

Open an account and get to know the salespeople. In that way they can keep an eye open for something specific you are waiting for. Everyone has clothing they'll never wear again because they no longer fit or are tired of wearing. Perhaps someone with a larger clothing budget put something on consignment that you would otherwise not be able to afford.

Generally, women comb through the racks at consignment stores, but look for men's clothing, too, especially suits. It is well worth a look, as these are in good condition or the store wouldn't take them. The price of some minor tailoring is considerably less expensive than a suit costing several hundred dollars.

Thrift stores

Thrift stores give you an opportunity to make tax-deductible donations and shop for gently used clothing that is usually not as high-end fashion-wise as a consignment store.

Use the Internet to identify a thrift store in your area that is run by an eligible charitable organization. National thrift store directories such as or can get you started. To be sure your store is eligible for tax deductions, you can check it on the IRS's online publications.

Two of the better-known thrift stores are the Salvation Army and Goodwill.

Be sure to get a receipt stating the name of the organization, the specific nature of the donation, such as types of clothing or list of household goods, and an estimate of the value made in good faith.

At second-hand thrift stores you can get rid of all the clothes your family can't use anymore, you can buy at severely discounted prices, and you can get a tax deduction. While you're there, you can shop for household items and furniture.

IMAGE DISTRIBUTED FOR AIDS HEALTHCARE FOUNDATION - Marcella Jackson, of Columbus, shops with her son Evan during the grand opening of AIDS Healthcare Foundation's Out of the Closet thrift store Saturday, Oct. 19, 2013, in Columbus, Ohio. The facility is AHF’s first retail fundraising and pharmacy operation in Ohio and will serve as a hub for the organization’s HIV/AIDS advocacy in the region. (Jay LaPrete/AP Images for AIDS Healthcare Foundation)
Marcella Jackson, of Columbus, shops with her son Evan at a thrift store. (Photo: Jay LaPrete/AP Images for AIDS Healthcare Foundation)

Care for your clothes

Check the care instructions on the inside labels so that you don't ruin clothing by improper care. Taking proper care of your clothes will keep them in good condition longer.

Learning how to sew can save a lot of money. Small alterations, such as hemming a skirt or slacks or replacing a button, are easy to learn. But if you don't have the aptitude to learn these skills, these are inexpensive tailoring jobs, certainly less expensive than buying new clothes.

Clothes can be worn twice, so don't wash them if you wore them for only a few hours. Hang them up neatly. The tendency is to throw clothes that have been worn on the floor and then throw them in the laundry.

The more you wash clothing, the more wear and tear you put on it. In addition, you are spending extra money on utilities and laundry products, and working twice as hard.

Don't use the dryer if you can hang-dry your clothing. Dryers break down the threads in the material and cost money to operate, especially if your dryer is electric.

Following are some more quick and easy ways to save money on clothing:

  • Stop being brand conscious when big-box stores such as Wal-Mart and Target have good-quality, fashionable clothes without the name brand.

  • Wait for store sales. You can have the name, if you're patient enough to wait for the store's sales.

  • Use coupons. Coupons are sometimes obtained from a purchase at the store, and sometimes from signing up for the store's newsletter.

  • Pay cash for your clothes. If you don't have the cash and have to use credit, you can't afford the item(s).

  • Buy your clothes online and take advantage of cash rebates from some of the big-name stores such as Saks, Macy's, and Bloomingdales, or big-box stores such as Wal-Mart and Target, and everything in between. Just visit rebate sites such as or for rebates on every purchase. You'll find every kind of store possible, not just clothes.

How to save money on shelter and transportation

Private mortgage insurance

Private mortgage insurance (PMI) is now much more costly than it once was. That is because credit became very easy to get and, in many cases, people really couldn't afford the loans they got for their new homes.

Lending companies had to protect themselves from the increasing number of foreclosures. If you didn't put a 20% down payment on your home, your bank probably required you to buy PMI, because below that amount, the bank wouldn't make any money if you did go into foreclosure.

Not all lenders require PMI when the down payment is less than 20%, but most do. Any lender that follows the Fannie Mae or Freddie Mac guidelines probably requires PMI.

If you now have 20% or more equity in your home, contact your mortgage lender. You may be able to stop paying for PMI, putting quite a bit of cash back into your monthly budget. The initial premium is likely 1–5% of the mortgage total, with a possible additional monthly fee.

Refinance your mortgage

Refinance your mortgage now, if you can, while interest rates are fairly low. Lowering your rate by even 1% is tremendously beneficial to your cash flow. This is particularly true for those with high rates due to poor credit scores when they applied for their mortgage.

If your credit score has improved, ask your current lender for a better rate. If your lender denies you, try at least several more. You may well find a lender willing to lower your rate.


You can save big money by selling your home and renting. This idea may not seem very attractive at all, but it will likely reduce your expenses tremendously. Not only will your rent probably be lower than your mortgage, you'll also save on taxes, home maintenance, insurance and utilities. You may even get free access to a pool, an exercise room, and free Internet.

A few more tips:

  • Live with several roommates instead of just one or two, or share a room.

  • Move to a less expensive house or apartment.

  • If you go to a college or career school near home, consider living with your parents or other family.

  • Share DVDs and CDs.


Get around town while cutting the cost of doing so.

  • Carpool to save money on gas and parking.

  • If you have a car, keep the tires inflated to the proper level; this will use less gas.

  • Compare gas prices on a site like

  • Run all your errands on one day of the week.

  • Walk or ride a bike instead of driving, if it's feasible.

How to save money on utilities

Bundle your services

Bundle your services for cable TV, Internet, and phone. Combining these services allows you the convenience of one bill and a lower combined rate. One of the utility companies calls this a Triple Play. Bundling can save as much as several hundred dollars per year.

Negotiate to keep the teaser rate

Utility companies offer a lower rate to get you to sign on, but at the end of the initial period, usually one year, your rate goes up. Call your company after the year is up and ask them to extend the initial teaser rate or you'll take your business elsewhere.

With other options out there, in most areas of the country, your utility company is more than likely to agree, to keep you as a customer. If not, DO sign up with another company, at their teaser rate, and continue to save as much as $350 each year.

Do you need your landline?

If you are not uneasy relying on your cell phone, do so, and save up to $100 per month depending on the services you receive and your calling plan. This a great way to save money. Another option is to keep the bare minimum service on your land line for emergency use only.

Reconsider smartphones

Once you get into the higher-end cell phones, you may be required to purchase a data plan. With the many applications available, such as the Internet, navigator, and on and on, data plans are very attractive.

If you don't really need these services (or if you can get them elsewhere, like on a tablet), however, downgrade to a cell phone with only calling and texting, and save yourself up to $100 each month.

Consider Skype or other Internet calling for free long distance calling and have the added benefit of a Webcam, so you can see each other while calling.

Shop around for electricity rates

Even if you only have one electric company in your area, you may still be able to shop around for electricity.

Big electric companies own the power lines that bring the electricity to your house, but may not own the generators that produce the electricity. Some areas have more than one generator company. Large electric companies buy electricity three months in advance, from the lowest bidder.

As prices change, the electric company changes their source. You can do this, too, but you have to do your homework. Electric companies are required to make you aware of what the prices will be for upcoming months, so check their Website or your bill, or even give them a call.

Your savings, of course, will depend on the going rates for electricity, but could be about $50 per month.

Summary of living within your means

Food, clothing, shelter and utilities are very large areas of expense for all of us. If we look carefully, however, there are many ways to lower all of these expenses.

Start doing some homework, and you'll see how easy it can be to put more money, every month, back in your pocket.

Practical ideas you can start with today

  • Always make a list before you leave to go shopping.

  • Check the Sunday newspaper, the online newspaper and my grocery store for coupons before you shop.

  • Combine grocery store coupons with manufacturers' coupons for greater savings.

  • Locate consignment and thrift stores in your area.

  • Check into bundling my cable, Internet, and phone to reduce the total monthly expense.

  • Find out if your area has more than one electricity generator company. If so, shop around.

This content was created in partnership with the Financial Fitness Group, a leading e-learning provider of FINRA compliant financial wellness solutions that help improve financial literacy.

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