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Simple ways to reduce your spending

October 23, 2008 12:00:00 AM PDT
With the holidays just around the corner, many people are trying to figure out how they will pay for gifts without increasing their debt. Experts say start by instituting a cash-only policy. Here's how you can make changes and put more money in your wallet.McKenna Podworski likes playing with her dad, but soon she'll have a baby sister to pal around with. The family's excited about their new arrival, but concerned about new expenses.

"We're trying to find ways to cut back," said Jamie Podworski.

But finding a couple hundred bucks in a tight budget doesn't have to be painful. In fact, financial experts at Kiplinger's Magazine say it's simple. The biggest reward may be hidden in your taxes, especially if you typically receive a refund.

"Go to your H.R. department at work. You can re-file your W4 form and have less money withheld from your paycheck," said Janet Bodnar, deputy editor, Kiplinger's Magazine.

If you're a typical "overpayer," that action alone will mean an extra $200 a month in your paycheck. Another easy way to save: Cut back on trips to the supermarket.

"A lot of people go to the grocery story three and four times a week, so if you're spending 10 bucks a week extra on impulse purchases, that's an extra 30 or 40 bucks a week," said Bodnar.

Kicking daily habits will also keep more cash back in your pocket. Ditch the drive-thru. Make your own coffee and pack lunch to save another hundred bucks. But don't deprive yourself altogether: When it comes to dining out, just cut back to one meal a week.

"The average price for a meal is about $20 a person, so for a family of four you're talking about $80. Well, if you're eating out say twice a week, maybe you just cut back to once a week and there's an $80 savings," said Bodnar.

At home, knocking off just two degrees on the thermostat can cut bills by 10 percent. That and other cutbacks have worked well for Jamie's budget.

"When you add it up, day after day, week after week, it makes a big difference," said Jamie.


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