"Save your money" has become a bit of a clichéd piece of financial advice - and it's especially grating during a recession, when many people have very little money left over after paying for basic expenses. But no matter how slim your margins, there are almost always some expenses that can be cut. Fortunately, those cuts need not be overly painful. In fact, many people pay bills month after month on things they could be paying considerably less for - or get for free.
TUTORIAL: Budgeting Basics
Everyone needs water, but if it's adding up as an expense, you probably aren't drinking what comes out of your tap. Bottled water can cost two to three times as much per gallon as gas. Tap water is just pennies a glass, plus it's probably a lot cleaner. Tap water is rigorously tested and monitored for safety and quality based on the hundreds of samples most communities take each month; bottled water need only be tested once per week and a study by the Natural Resources Defense Council found that one-fifth of bottled waters exceeded the state guidelines for microbial limits. (For tips on how to cut your tap water expenses too, read WaterSense: Saving Water And Money.)
2. Books and Magazines
Reading is a great, low-cost form of entertainment, but a new bestseller can cost up to $40. Unless you're a very slow reader, this expense will really add up over the year. Consider visiting your local library - you won't be able to show off all the books you've read, but your friends will think you look pretty smart if you're able to save this money for something better.
3. Long Distance Charges
We're not saying you should stop calling your grandma every week, but don't just pay your cell phone or land line provider for long distance services. Oftentimes, even these companies' unlimited plans can't beat long-distance calling cards for their low per-minute rates. Google Voice and Skype are other low-cost alternatives; Google Voice even offers free long distance calls with the United States.
4. Bank Fees
You'd think that the fact that a bank gets to hold your money (sometimes for years) and invest it until you ask for it back would be enough of a benefit to keep fees down. Unfortunately, bank fees have become big money and most banks aren't going to be cutting them out any time soon and for the most part, they don't benefit depositors one bit. Fortunately, there are still banks that offer low- or no-fee checking. Online banking can also be a great low-cost option for those who don't need a lot of service. (Find out more in The Ins and Outs Of Bank Fees and Online Banking: Lower Costs And Little Sacrifice.)
If your grocery list includes a lot of brand names, you're probably spending a lot more than you need to on food. Branding costs companies money - which means you pay more just for the product's packaging and advertising. To cut this cost, buy as many unprepared foods in bulk as you can, and try generic versions of your favorite packaged foods. In many cases, the generic versions are made in the very same plant as your branded favorites. In other words, you probably won't notice the difference - except in the size of your grocery bill. (For more tips on how to cut food costs, see 22 Ways To Fight Rising Food Prices.)
Insurance is an important part a good financial plan, but many people go overboard and end up paying for additional coverage that doesn't afford any extra protection. Sort through your insurance plans for overlap to ensure you aren't paying for the same coverage twice. You should also consider a higher deductible on many of your plans; it will significantly lower your premium payments. In many cases, these savings will add up to much more than the deductible you will have to fork over when you file a claim. (Find out if you have more coverage than you need in Are You Over-Insured?)
The Bottom Line
One of the simplest pieces of financial advice is cut out unnecessary expenses. Chances are, you have more of these in your budget than you think. Look into the things you pay for every month and find ways to whittle those costs down. Use the extra money for savings, to pay off debt or just to avoid having to use your credit card. When it comes to improving your financial situation, little steps make a big difference over time.