Cost Cutting Essay

Most of us spend more than we need to for a lot of things. If you really can afford luxuries such as gourmet teas or designer clothing and still save for your future, you’re lucky. However, if you’re struggling to meet the financial goals you’ve set on your retirement roadmap, it’s time to look for ways to cut expenses—daily, monthly, and long-term. Start by seeing if you’d benefit from either of these big cost-cutting strategies: †¢If you’re paying high interest on a mortgage and you plan to stay in your home for a few years, consider refinancing.  Be sure to do your home- work to avoid closing costs that might make the move less attractive financially. †¢Reduce your credit card debt. Call the bank and try to negotiate lower finance charges. Then pay down the debt as fast as you can, starting with the high-interest debt. (See AARP’s Tip Sheet, â€Å"Managing Debt. †) It’s easy to spend money without realizing how much it adds up to over a week, a month or a year. So, to make other cuts in your expenses, try reviewing what habits, like eating lunch in a restaurant every day or buying expensive clothes, can add up to in the course of a year. Here are some places to look for cuts. Meals and Entertainment Americans love to eat out, whether it’s a daily break- fast at a pricey coffee shop or fast-food dinners when you feel too tired to cook. Keep track of where you’re eating your meals and what they cost. Bringing your lunch to work and cooking your meals for dinner are good ways to reduce food expenses on a regular basis. Movie fans can save money by renting DVDs, instead of paying admission to the theater and eating that expensive popcorn. Household and Transportation Expenses  Cable television, phone service—including your cell phone— and Internet service can add up to a tidy sum every month. Make sure you have the most economical plans available. If you’re in an area with more than one provider, comparison-shop. Energy costs are climbing and will probably continue to do so. Do an energy review of your home. Plug up drafty windows and doors with weather-stripping, insulate them with blinds or curtains, and then turn down the winter temperature inside by a couple of degrees. Consider solar heating and cooling if it’s feasible where you live. If you have central air, try to use it less. Install ceiling fans in some rooms, so you don’t have to cool the entire house. During the summer months, avoid using the clothes dryer, dishwasher, etc. during peak hours to lower your energy bill. Your biggest transportation expenses probably come from one or more vehicles. Here are some ways to cut back on those costs: †¢Car-pool to work with neighbors or colleagues. †¢Use public transportation. †¢Talk to your insurance company about ways you can lower your rate. On the highway, save money on gas by driving 55 miles per hour instead of faster. Shopping Thoughtful planning, before you shop, is a good way to reduce expensive impulse buying. Whether you’re going to the grocery store, shopping for holiday gifts, or looking for a new pair of shoes or a party outfit, make a list and decide what you can afford to spend ahead of time—and don’t buy something unless you really need it. In the supermarket, read the unit prices: is it cheaper to buy a 16-ounce box of crackers for $3. 0, or 12 ounces for $3. 10? For larger expenses such as a winter coat or a washing machine, check prices at more than one store before you make a decision. You should also check out thrift shops, especially if you know of one in an upscale neighborhood where you might get some good bargains. For Internet purchases, in addition to comparison-shopping on prices, check shipping charges. Some sites make you pay the whole cost; others will offer a deal to entice you to buy from them.