10 Painless Ways to Balance Your Budget

Are you scrambling to make ends meet, spending more money than you earn, or failing to save each month? If so, you're not alone�according to a recent survey, more than one-third of Americans are regularly spending more than they can afford. The good news: By following a few out-of-the-box strategies, you can manage your day-to-day expenditures, balance your budget, and get in the black in no time. To get started, check out these 10 simple tips that just about anyone can use.

1. Add it up. It may seem like a given that everyone should know exactly where their money is going. But while many people have a "ballpark budget," most aren't keeping close track of their expenditures. If you're having trouble keeping a tally, invest in an inexpensive pocket calculator and a portable journal. This way, you can keep a running tab anytime and anywhere you happen to spend. Over time, this approach will also help you identify areas where you can tighten your belt.
2. Pay in cash. According to experts, the widespread use of credit and debit cards is making it increasingly difficult for people to balance their budgets. Shoppers who use plastic rarely know how much they spent on groceries until their statement arrives. On the other hand, those who are paying hard-earned cash out of their wallets are more likely to think twice about impulse purchases.
3. Control housing costs. If you're like most U.S. homeowners, housing costs eat up more than 20% of your income, a recent Census Bureau report revealed. But while it's a necessity, that doesn't mean you can't find ways to save on shelter. If you're feeling "house poor," consider refinancing your mortgage at a lower interest rate, and if your home has decreased in value, have it revaluated by the tax assessor. In addition, do a competitive analysis to make sure you're getting the best possible deal on property insurance.
4. Save on utilities. According to the U.S. Department of Energy, consumers spend an average of 6% to 12% of their income on utilities. However, there are ways to economize, such as investing in compact fluorescent bulbs (although the initial cost may seem steep, these energy-efficient illuminators last 10 times longer than their incandescent counterparts, and each bulb can shave up to $60 off your electricity bill during its lifetime). Also consider buying a programmable thermostat and a low-flow shower head�two simple switches that can save you hundreds of dollars per year.
5. Cut communications spending. For many consumers, mobile phones are a must. But just because you've committed to a particular plan doesn't mean you shouldn't shop around to find a better deal. To begin, take a close look at your cellular plan to determine whether you're using all the minutes you're paying for. If not, you may find that terminating your agreement, paying a small penalty, and switching to a prepaid cell phone that you reload each month is a more cost-effective option.
6. Trim transportation expenses. From the cost of buying a car to the price they pay at the pump, most people find that automobile ownership is more expensive than they had ever anticipated. Fortunately, there are ways to save without undermining your ability to get where you need to go. For example, you may be able to conserve hundreds of dollars a year by using the lowest-octane gas recommended in your owner's manual. Another fuel-saving tip: Avoid revving your engine, which not only wastes fuel, but also leads to a loss of oil pressure.
7. Watch out for service contracts and warranties. Always evaluate the long-term value of gym memberships, cable plans, and other service contracts before you sign on the dotted line. In many cases, you'll find that you're paying for the bells and whistles of a premium plan when all you need is a basic level of service. In addition, consider whether extended warrantees on appliances and other items are worth the expense or whether you'd be better off stashing those funds away in a savings account or rainy-day fund.
8. Reduce personal care and clothing costs. Who says that looking good has to cost an arm and a leg? As it turns out, there are lots of creative ways to keep up appearances without breaking the bank. To cut the cost of salon services, schedule your haircuts at a beauty school or on a training night at your local salon (you'll trim hundreds of dollars annually this way). And for great deals on clothing, check out factory sales, discount stores, and online auctions�many times, you'll find stylish items for a fraction of the retail price.
9. Save on grocery bills. According to the U.S. Department of Agriculture, Americans are experiencing the worst food inflation in almost 20 years. Luckily, there are ways to save on food without compromising taste or nutrition. To begin, try store brands instead of opting for the big-name versions (oftentimes, they use the same manufacturer, but the house products cost significantly less). To save even more at the supermarket, clip coupons for the items that you regularly buy, and consider joining a bulk retailer such as Sam's Club or Costco. Although these warehouse clubs charge an annual fee, products such as canned goods, coffee, and condiments can be up to 50 percent cheaper.
10. Stretch your health care dollar. Medical costs can be staggering, but there are ways to reduce your health-related expenses and maintain the same quality of care. To save on single-use prescriptions, always ask the doctor for samples; for chronic or long-term therapy, request generics from your provider. Also compare costs at various drugstores, and consider using mail-order pharmacies�in many cases, the savings per treatment can mean big bucks in savings over the long run.

Once you've followed these 10 tips, you should be on the fast track to balancing your budget. But there are other painless ways to cut costs, take control of your spending, and get on firmer financial footing. For additional belt-tightening strategies, check out "Ways to Stretch a Dollar", and to learn more about smart money management, search for other helpful articles in CareOne's Article Library.

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