Unique ways to cut back

Whether your annual income clocks in at US$20,000 or at US$200,000, cutting down on costs is probably a high priority these days. In September U.S. consumer spending dropped for the first time in two years, shrinking by 0.3 per cent from August, according to the Commerce Department (despite personal income growth of 0.2 per cent).

However, trimming the financial fat doesn't have to mean sacrificing life's necessities. Talk to any personal-finance guru and she'll give you a slew of ideas for saving money during the downturn.

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For example, Josh Dorfman, chief executive of sustainable-furniture company Vivavi and author of the The Lazy Environmentalist on a Budget, set to be released April 2009, says that typical tips for conserving energy—and, more important, money—are great, but there are a few lesser-used hints that can save you thousands of dollars per year.

For example, while digital thermostats and low-flow shower heads work wonders, an even easier solution to cut back on home energy usage is swapping your generic power strip for one that combats the "vampire effect," or the energy wasted by leaving items plugged in while not in use.

"Most people don't know that five per cent of all energy consumption stems from the vampire effect; that definitely adds up over the course of a year," says Dorfman. "But most people find it a pain to unplug everything every time you leave the house."

Instead, Dorfman suggests investing in a couple of smart power strips that automatically cut the energy to the device when it's not in use. For US$50, Belkin's surge suppressor includes a remote control switch that cuts off or activates the power flowing to devices plugged into the outlet strip. That investment might save you five per cent of your electricity bill, which can save you hundreds of dollars per year, depending on your energy use.

Power in numbers

Conservation is all well and good, but we've still got to consume, even if it's a little. Discount-shopping expert Kathryn Finney, best known for her five-year-old blog The Budget Fashionista, suggests cutting back by creating your own co-op. Instead of plunking down US$50 or more for a price club card and even more cash for those bulk rolls of toilet paper, Kinney says to share the cost of the card with one or two friends and take group trips to your local Costco (nasdaq: COST) or Sam's Club. You can still save money per unit, but you won't overload your cabinets.

For example, one giant-sized jar of Skippy peanut butter might last two people an entire year; jars are usually sold in a two-pack. With a price-club buddy, you can split the purchase and enjoy the value without wasting money or food.

Finney also recommends going back to something that used to be a Sunday-paper ritual: clipping coupons. But nowadays the best deals are online.

"If you're buying it anyway, you might as well save money while doing it," says Finney. One of the budget maven's favourite coupon sites is Retailmenot.com, which offers coupon codes and discounts for over 20,000 stores, from Gap (nyse: GPS) to CVS to Nike (nyse: NKE). Right now, Nike is offering free shipping on everything at its NIKEiD Web site through Nov. 29, while CVS is offering US$5 off a US$10 purchase at CVS.com for an unspecified length of time.

Holiday on the cheap

If you're feeling a hint of that recession depression because next year's family vacation had to be cancelled, personal-finance expert Harrine Freeman, founder of Bethesda, Md.-based credit counselling company H.E. Freeman Enterprises, says that many timeshare companies offer free or highly discounted stays at their properties so that prospective owners can do a "test drive."

Mid-priced hotelier Marriot, for instance, offers discounts at 40 timeshare locations around the world, from Hawaii to Spain. Those willing to sit through a 90-minute sales pitch can stay at any of these properties, depending on availability, for just US$300 for four nights. And that's for up to four people, which means the experience costs just US$75 per person in a full house. The hotelier benefits because two out of 10 people actually end up buying into the timeshare, according to the American Resort Development Association. You benefit because the trip is ultra-cheap.

"You might have to sit there for an hour and a half and listen to a presentation, but it's worth it for a free vacation," says Freeman.

Whether you're looking to reduce your costs by hundreds of dollars or thousands of dollars, cutting back doesn't have to be painful. In fact, in can be quite simple.

"Budget living hasn't been something that most people have been thinking about. They don't know where to begin," says Finney. "Start with the easy stuff."

 

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In Pictures: Nine Unique Ways To Cut Back