What have you been doing to cut costs these days? Times are tight for many of us. Any suggestions will be appreciated

Whenever one finds oneself in dire financial straits, whether economically induced or otherwise, there are only two things that can be done: 1) increase income; 2) reduce expenses. (Of course you can always try to borrow money, but I’ll leave that alone for now. Mainly because someone in dire financial straits may not be able to attract credit of any kind; but even if they could, it might not be a good idea because borrowing always involves paying back, which can also be a tricky proposition in untenable financial surroundings.)

 There are several ways to increase income, but your question pertains to reducing expenses, or “cutting costs” as you so very well put it. I have several suggestions that might help:

 1) Shop service providers for services you are using. Most service providers, cell phone companies, cable TV providers, insurers (car, homeowners, life, medical), will lure you in with attractive loss-leader pricing, then increase their fees, charges and premiums over time to eventually make up for the income they lost at the onset of your patronage, thinking you’ve become too set in your ways to even consider going through the inconvenience of moving / changing service providers. Shop around for new loss-leader pricing with their competitors. You’ll be surprised how much you can shave off your monthly budget this way.

 2) Make your current service providers compete for your business. Let your current providers know that you’re shopping their competition. You’ll be surprised at the new deals they’ll be able to cut, deals they haven’t advertised (at least not to you), in order to keep your business. That way you can get the loss-leader pricing without even changing service providers.

3) Deal with utility consumption. Next to your mortgage payment, or rent payment, utility bills comprise the biggest part of regular monthly expenses for most of us. Your electric, gas, water and sewer usage will bite big chunks out of your budget and can get out of control quickly and with little urging from you. Go green. Use water saver toilets, compact fluorescent (energy saving) light bulbs (at lower wattages), fix leaky faucets, turn the furnace down two degrees, close doors and shut off registers to rooms you don’t use, water the lawn less (you can green it up again when the economy comes back …); then, once a month, have “Little House On The Prairie Night”: turn off all electricity (except the fridge, of course) and read by candlelight.

4)  Don’t forget your garbage removal bill. You can reduce that by composting and recycling. Contact your garbage removal service provider and ask what materials can be recycled, whether they have separate bins for that, and when pick-ups might be. Then ask whether you can go to a smaller, less expensive bin for your non-recyclable trash.

5) Discontinue your lawn care service. Become a “do-it-yourselfer”; or, if you have a natural aversion to yard work (many of us do) let it go wild a little. Just tell your neighbors your “going natural” and let the foliage take over (this cost-cutting activity may run afoul of some homeowner association by-laws – if you belong to a homeowners association, disregard).

 6) Finally (and this may be most important), pay down and / or restructure your debt. You’d be surprised that credit card companies, many of them, are willing in these hard times to re-negotiate terms on their credit accounts. Call them and ask under what circumstance they would be willing to drop your interest rate to one more commensurate with today’s lower market rates. Some installment lenders are willing to drop rates and extend loan terms to borrowers who are in dire financial straits. Be careful because this can affect your credit. Be sure to ask the lender how your credit will be affected. However, depending on how dire your circumstances, it may have less of an affect than, say, becoming delinquent, or missing payments altogether. Restructuring debt can have a dramatic affect on your monthly budget. Sometimes consolidating your outstanding loans into one large account can shave hundreds of dollars off your aggregate monthly payment. Be aware that you may pay more interest in the long run, but if a bigger concern is reducing your monthly debt service to a more manageable level, this may be a good option.

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