Budget Now To Offset Holiday Spending

It's tough sticking to your budget any time of year, but the holiday season presents special challenges with so many unexpected expenses and temptations. If you sometimes fall prey to holiday overspending, you might want to look for ways to make small spending cuts in other areas of your life -- year round -- that, when added together, can result in big savings.

Here are a few suggestions:

• If you have low-deductible homeowners, renters or auto insurance, ask how much your premiums would drop by raising the deductible to $500 or $1,000 -- it could be 15 to 30 percent or more. Also ask about discounts for safe drivers, non-smokers, added security devices and buying home and auto insurance from the same carrier.
• Regularly balance your checking account to avoid overdraft and returned-check fees. Sign up for phone, text or email alerts for when your balance drops below a certain level or payments are due.
• Switch to a free checking account. You can shop rates for banks at Bankrate.com and find credit unions for which you're eligible at the Credit Union National Association's Search Engine.
• Cancel underutilized phone and cable services, magazine subscriptions, gym memberships and other "extras" you're not using.
• Before shopping at chain stores, check with online gift card resellers like Plastic Jungle and CardWoo where you can buy gift cards at a discount. Combine the gift card with a coupon or discount code to save even more.
• Kick bad habits. Smoking one $6 pack of cigarettes a day costs about $2,200 a year, not to mention additional medical and lost-work costs.
• Cut back on to-go coffee. One $3 cup a day is about $1,000 a year. Instead, buy a good thermos and bring your own. Same goes for bottled water -- buy water filters for home and work and pay pennies a day versus dollars.

• By simply lowering your thermostat 10°-15° for eight hours, either manually or using a programmable thermostat, you can reduce your home heating bill by 10 percent or more -- say, when you're asleep or at work. For a $400 monthly bill, that's $40 in savings.
• Insulate your water heater and outgoing pipes to reduce heat loss and save 4 to 9 percent in water-heating costs. (See this Department of Energy website for details.) Also, try lowering the temperature to 120° for additional savings.
• Up to 30 percent of heated or cooled air can be lost through leaks, so add weather stripping and caulking wherever air escapes. Check whether your utility company will conduct a free or low-cost home energy assessment to help locate leaks.
• Beginning January 1, 2012, traditional incandescent light bulbs will begin phasing out (starting with 100 watt bulbs) in favor of more efficient models that use 25 to 80 percent less energy. By upgrading 15 bulbs, you could save about $50 a year on utilities.
• "Energy vampires" like computers, televisions, microwave ovens and cell phone chargers use up to 5 percent of your electricity, even in standby mode. Either plug them in only when needed, or attach to a power strip you can turn off at night.
• Fix your plumbing. A faucet leaking one drop per second wastes about 2,000 gallons a year.

• Aggressive driving (speeding, rapid acceleration and braking) wastes gas and can lower gas mileage by 33 percent on the highway. By driving sensibly, you could save about $1.20 for each $3.65 gallon of gas.
• Fuel economy drops rapidly at higher speeds. For each 5 mph you exceed 60 mph, it's like paying an additional $0.29 per gallon of gas.
• Avoid keeping unnecessary heavy items in your car -- each extra 100 pounds reduces your mpg by up to 2 percent.
• Use websites like GasBuddy (which has free smartphone apps) and GasPriceWatch, where motorists share up-to-the-minute tips on where to find low-priced fuel.

• Consider generic vs. brand-name drugs; copayments are usually much lower. Medtipster.com lets you search for generics by cost, by local zip code. Also, by law, you don't have to be a member of a warehouse store to use their pharmacy.
• Ask whether your insurance offers quantity discounts for mail-order prescriptions. Often, the copayment for a 60- or 90-day supply will be the same as a 30-day supply at a regular pharmacy.
• Ask your doctor about pill-splitting. Many drugs come in double-dosage tablets that cost about the same as a lower dosage. (Caution: Some pills should never be split, so always ask your doctor or pharmacist first.)
• Ask your doctor or pharmacist about pharmaceutical companies' drug assistance programs for uninsured or low-income people. There's a lot of paperwork involved, but you could save thousands of dollars if you qualify.

• AARP's Save Money on Everything site.
• America Saves is full of savings strategies and links to other resources.
• Practical Money Skills for Life, a free personal financial management program run by my employer, Visa Inc., offers numerous savings and budgeting tools, including a Holiday Budgeting Center. (On a related note, see my previous blog, Avoid Holiday Spending Hangover.)

By trimming a few dollars here and there you're suddenly saving hundreds or thousands of dollars a year -- enough to tide you through the holidays and start a vacation fund for next summer.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

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