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April 18, 2008

Where to cut back

For households having a tough time in today's economy, with incomes not able to stretch to cover all spending, what can they do? What are some likely items for them to cut back on in their budget? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"First, what should you not cut back on? You should not cut back, obviously, on your mortgage payment or your rent payment. You shouldn't cut back on insurance payments. And you shouldn't cut back on money that you're setting aside for retirement, for emergency savings and for college funds for your children. Instead, what you want to focus on are these areas. First of all, I would try to eat in more and eat out less. Americans now are spending just as much on eating out as they are eating in. Eating in is cheaper because you are not paying effectively for the rent and the wages of the wait staff and the electricity bill of the restaurant because you are already doing that at home. So try to eat in more and eat out less. Wear your clothes a little longer. Don't get lured into buying the new fashions. Try to go along with the same fashions for another year. People will still like you. Plan, when you are driving, plan for multiple purpose trips. That is, if you need a quart of milk, don't jump in the car and run to the grocery store. Put that on a list, and try to plan that trip to get milk with other things you might have to do, pay a bill, go to the bank, something like that. Take more modest vacations. Try to cut spending there. And then, finally, this summer set the temperature up a little bit to save on your electric bills. It's amazing how much you can save by doing these little things."

Posted by Dave at April 18, 2008 08:16 AM