PHOENIXIf you are sick and tired of finding both your bank account and wallet empty with days left before payday, welcome to the crowd.
With more and more Americans living paycheck to paycheck, its no wonder the average household has about $9,000 worth of credit card debt.
Many consumers have the mentality that living paycheck to paycheck is the only option. Mike Sullivan, director of education for Take Charge America, a non-profit credit counseling company, said you dont have to wait for your boss to give you a raise to have more cash on hand.
You would be surprised how much more money you could have at the end of each month by adjusting your daily spending habits, Sullivan said.
The 30 percent increase in bankruptcy filings in 2005 is proof Americans are spending outside their means.
Much of the increase was the result of a new law that went into effect last fall, which made it harder to erase credit card and other debt in a bankruptcy.
However, Sullivan said many of the cases reflect a trend that Americans are letting their wants overshadow their needs.
Fancy cell phones, MP3 players and name-brand jeans have entered the American lexicon as necessities, but they are far from it, Sullivan said. We can potentially free up hundreds of dollars in our monthly budgets by re-examining our wants and re-prioritizing our needs.
Sullivan offered the following seven tips to help consumers find extra money in their existing budgets:
1. Name brandsBuying generic brands does not necessarily mean you are sacrificing quality. In addition to saving a lot of cash, many generic foods and prescriptions contain the same ingredients as their name-brand counterparts. Why pay more for a different label? As for clothes, if you cant live without the label, try shopping at a consignment clothing store and pay a fraction of the price you would for new clothes in a department store or boutique.
2. High-tech pitDo you really need a cell phone the size of a credit card? Are you watching all 20 movie and sports channels you subscribe to? Many of us are spending hundreds, or even thousands, of dollars on high-tech items that often end up sitting in the back of a closet. For example, an MP3 player can run you about $200 or more, a camera phone is about $150 and a digital video recorder will cost another $100, in addition to monthly fees. Thats nearly $500 worth of products you can live without. You could use that money to help pay down your mortgage or student loans. In addition, when purchasing a cell phone, contract for the lowest cost plan that you need and go for the free phone.
3. But its on sale…Dont buy items you wouldnt normally buy simply because they are on sale. If you have been living without a cashmere sweater, you dont need one now that the price has been slashed 20 percent. Regardless of the price, you are still out a large chunk of money, especially if you used your credit card for the purchase. Try to remove charge it from your vocabulary. Credit cards should only be used for emergencies, especially if you are already sitting on a pile of debt.
4. Dry CleaningSuits and delicates that you purchase at a reasonable price could end up costing you hundreds of dollars in the long run because of dry cleaning expenses. You can dramatically reduce these charges by do-it-yourself dry cleaning. A quality at-home steamer costs about $150 to $200, and will last for years. You can also try a dry cleaning system that works in your home dryer, which costs about $10 for 24 garments.
5. Coffee breaksIf you think your daily Starbucks is only putting you out a few bucksthink again. If you buy one drink, five times a week, at $3, youre throwing away $60 a month. Thats money you could use to pay your cell phone bill or pay down credit card debt.
6. Eating up your budgetWhen you are spending a few dollars at a time, it is often hard to gauge how much of your total budget you are spending on food. You can save cash by purchasing non-perishable food in bulk, and eat what food is left in your pantry before running to the grocery store. Moreover, if you spend $8, three times a week on lunch, that adds up to $96 a month. Tack that onto a couple nights on the town, and you are suddenly at $200. You can save money by brown-bagging at work, as well as going on a picnic or fixing a romantic dinner at home, rather than dining in a fancy restaurant.
7. CarpoolWere heading into the summer driving season, which means gas prices could go even higher. You can save money by carpooling to work, school or soccer practice, while doing something good for the environment. Trade off driving duties week to week, and, in return, visit the gas pumps a fraction of the time.
From the May 31-June 6, 2006, issue