14 Ways to Slash Your Expenses in the New Year

Boost your bottom line in 2014 with these budget cuts.

Couple sitting at kitchen table discussing bills
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By Teresa Mears

With the new year approaching, it's time to get your financial house in order.

No matter what mistakes you made in 2013, you get a do-over in 2014. The beginning of the year is a great time to make changes that will boost your bottom line going forward. But before you can make a plan to save money, you have to find out where your money's going. If you use an online budget tool or computer program to track your spending, run some reports and evaluate where your money went. If you don't have any records, write down every penny you spend for a month.

"It's hard to figure out where you're overspending until you know where you're spending," says Jean Chatzky, author of "Money Rules: The Simple Path to Lifelong Security."

Once you've got a record, do some analysis. The first question, obviously, is whether your outgoing funds exceeds your income. If you've got a mountain of credit card debt, and every month you spend more than you take in, you need make some changes.

"This can happen to smart people, to anybody, to responsible people," says Beverly Harzog, author of the new book "Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made." Her problems were caused by overspending when she was young,
but others have ended up in debt because of job loss, medical problems or other issues beyond their control. Solving the problem, however, is up to them. "It is your problem and you have to fix it, regardless of how it happened," Harzog says.

Even if your expenses don't exceed your income, drilling down into your spending may reveal places you can painlessly cut costs to have more money for retirement, a home down payment or an exotic vacation.

The best spending plan for you may not be the best plan for your neighbor. We've all heard the cliche about cutting out the morning latte, but that isn't going to work for everyone, especially those who never buy lattes. "If you value that takeout coffee -– if it puts a little joy in your day -– I don't believe that's what you should cut," Chatzky says.

For some people, cutting out the morning latte won't make a dent. They may have to look at more painful cuts, such as moving to cheaper housing or choosing public rather than private schools. "Sometimes the little trims here and there aren't enough," Chatzky says.

Here are 14 ways to slash expenses in the new year:

Cook more at home. "We eat so frequently on the go these days," Chatzky says. "The evidence is gone before you get home." Anyone who can read can cook, and the Internet is full of websites with easy, healthy recipes.

Save on groceries by shopping store sales and using coupons. It's true that a lot of coupons are for junk food, but that doesn't mean you can't save with coupons, particularly on personal care and cleaning products. Store sales can provide even bigger savings. Many products go on sale every two, three or six months. Watch the sales cycles on products you use, and stock up when prices are lowest.

Look for happy hours and restaurant deals. For many people, drinks and dinner with friends are a big part of socializing. If you don't want to give that up but you want to spend less, find restaurants with 2-for-1 drinks and free or cheap appetizers and make those your dinner. Join restaurant email clubs to get coupons you can use to cut the price of restaurant meals.

Call your cable TV and Internet provider and ask for a better deal. As more users abandon cable and more competitors get into the market, companies want to hang on to customers. That means they're ready to make a deal. You'll get the best deals from the customer retention department, which is where you call to cancel. "The last time I did this, I saved close to $50 a month," says Liz Weston, author of "Deal with Your Debt: Free Yourself from What You Owe."

Investigate cheaper cellphone plans. Many carriers are offering new no-contract and pay-as-you-go plans. If you find a plan you like, and your contract is up, ask your existing carrier if it will match the price or give you a better deal.

Cancel your landline phone. Many people find they rarely make calls on their home phone. If you're not using it, why are you paying for it? Ask about bundling your phone with your cable and Internet service –- but be warned that a cable phone won't work in a power failure.

Review your insurance costs. Call your insurance agent and make sure you're getting all the discounts to which you're entitled. Make sure your coverage fits your current circumstances. If your teenage driver moved out and got his own car, get him off your policy. You might also want to get quotes from other companies on auto or home insurance.

Call your credit card companies and ask for lower rates. Or do balance transfers. Credit is loosening up and card companies are sending more offers. If you get a good offer, call your existing company and see if it will match the new offer. If your credit is good and you make all your payments on time, you're in a good position to negotiate. "All they can do is say no," Harzog says. "Consumers have more power than they know."

If you are in debt, make a plan to pay it off. Paying $200 a month in interest charges is a waste of money that would be better used toward retirement savings, your kids' braces or a trip around the world. Some experts advise paying off the smallest balances first, although Harzog recommends targeting those with the highest interest rates. Either way, start paying off those cards, one at a time. Make the minimum payments on all cards, but target one card at a time and make bigger payments so you can pay it off. When you've paid off one card, go to the next.

Look for a cheaper health club. Are you paying $75 a month for a gym membership you never use? Maybe you should cancel and take up walking, biking or hiking. Perhaps you can get a gym membership that's equally good for half the price at a YMCA or community center. Shop around.

Look at the fees associated with your bank and investment accounts. If you don't have free checking, ask your bank what you can do to get it. If your bank doesn't offer free checking, find one that does. If mutual fund fees or stock account fees are eating into your returns, move your accounts to a discount brokerage, especially if you're not getting personalized advice.

Don't shop for recreation. If you're not in the stores, you won't be tempted to buy. That goes for yard sales and thrift shops, too, Weston says.

Be careful of online purchases. It's easy to shop online in the wee hours of the morning, but that spending can add up. Unsubscribe from email alerts that urge you to spend. Get yourself off stores' online mailing lists and restrict your online shopping to things you really need, when you need them.

Make a budget and stick to it. Give yourself a realistic allowance for discretionary spending and don't spend any more than that. "It sounds quaint," Harzog says, but having a budget works.

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Gregory Freeman

I made my girlfriend as frugal as me. Now were BOTH cheap!

January 21 2014 at 8:13 AM Report abuse rate up rate down Reply
Cao Rainy

"Watch the sales cycles on products you use, and stock up when prices are lowest." Yes, I love to shop for the most discount price items and enjoy it. I'd find and compare different coupon sites like anycodes, RTM for as many coupon codes as possible.

January 07 2014 at 3:43 AM Report abuse rate up rate down Reply
Phil Collins

Ladies and Gentlemen start taking all your Change and put it in a Can or Jar and always pay with Paper Money, so far we have put over $3000 away for our kids College Fun in just 2 years. This is Money we would have never saved and it was painless too.

January 02 2014 at 7:34 AM Report abuse rate up rate down Reply

A great way to reduce your health care costs is to improve your health. Most plans don\'t include dental - one crown or implant can cost you 1.800 to $2,500. Always buy the best electric toothbrush made, best toothpaste, best floss, and best anti-cavity mouth rinse. It will save you thousands in the long run, not only in dental but with better health. When your teeth and gums are healthier you chew your food better so it digests better sending more vitamins and nutrients to your body.
Plus, better chewed food takes less energy to digest leaving more energy for you making you feel better and have more vigor. Even you heart has to work less. Did you know most people with poor gums also have heart issues ?

January 02 2014 at 6:16 AM Report abuse rate up rate down Reply


January 02 2014 at 6:05 AM Report abuse +3 rate up rate down Reply

If you cut coupons you use;
that uses up Time.......
It only works out if the Time you use up
could not be used more profitably by making money elsewhere.

January 01 2014 at 11:59 PM Report abuse -1 rate up rate down Reply
1 reply to YourFtr's comment

Look out for printing coupons on your computer. Most ink cartridges cost about $75.00 for the pair - color and black. They print around 75 pages or including the page of paper about $1.02 per page. If you print a \"dollar off\" coupon you are losing 2 cents.

January 02 2014 at 6:33 AM Report abuse rate up rate down Reply

I get free gasoline at the airport service center and the salvage yard from wreaked cars. I put my kids up for acting in commercials and modeling , that alone paid for my range rover cash. Food is free at every grocery store & restaurant dumpster.
My ol lady pays alimony and I send my kids to the grandparents when they ain't working, I was looking to gigilo but nobody wants std. Staying stoned all days saves a lot of money, but it inthinated my klibber.

January 01 2014 at 10:20 PM Report abuse -4 rate up rate down Reply
1 reply to Beautiful's comment

anweres line by line:
old "free" gas- it may be ruining your Range Rover's motor
Pimping your kids?
dumpster diving... really?
living off your 'ol lady' Nice- NOT
your parents want you to come and get your kids!
And after coming out of the dumpster who would want you as a gigilo?
Who's paying for you being 'stoned' all day
And what is "inthinated my kelbber"?

January 04 2014 at 5:37 AM Report abuse rate up rate down Reply
1 reply to stvhndyman's comment

That was suppose to be "answers" line by line

January 04 2014 at 5:38 AM Report abuse rate up rate down

In answer to Tom. I find that whenever I ask the person who makes a comment regarding
purchasing Affordable Health insurance, never seems to get a valid reason.

Please state your reason for your comment.

January 01 2014 at 9:50 PM Report abuse -1 rate up rate down Reply
1 reply to lou7162's comment

I checked on Obamacare. My monthly payment would have more than doubled, and my deductable would have doubled. So, there is your valid reason.

January 01 2014 at 11:13 PM Report abuse +2 rate up rate down Reply

Maybe they should send this info to Congress?

January 01 2014 at 9:27 PM Report abuse rate up rate down Reply

Don\'t buy Obamacare.

January 01 2014 at 7:49 PM Report abuse +2 rate up rate down Reply
1 reply to Tom's comment

I saved a TON of money with Obamacare! I went from $850 a month to $250. So be careful dispensing advice.

January 01 2014 at 8:16 PM Report abuse +2 rate up rate down Reply
2 replies to fallinsky's comment

And what is your deductable now compared to before?

January 01 2014 at 8:44 PM Report abuse +3 rate up rate down

I agree you saved 7,200 a year and if your yearly maximum deductible is below that or don't use your insurance at all you win big. If you fall below income requirement and shop for right plan by doing some math you'll save some good money.

January 01 2014 at 10:39 PM Report abuse rate up rate down