The U.S. is a nation of spenders. According to the Bureau of Labor Statistics, the average consumer spent 2.4% more in 2016 than in 2015 on everything — from food and housing, to transportation and apparel. While that percentage might sound negligible, that’s $24 more per $1,000 spent.

The average U.S. consumer spent 2.4% more in 2016 than in 2015 on everything — from food and housing, to transportation and apparel. That’s $24 more per $1,000 spent.

This has likely left many with squeezed wallets. The best way to offset the pinch? Examining your budget and figuring out how to cut costs.


Perhaps the easiest way to save on travel costs is to use mass transit, where available, and to carpool when possible. By taking the train or bus to work, while you’ll pay for a weekly or monthly ticket, over time you’ll save money on gas, maintenance and parking. Of course, if you are able to avoid keeping a car at home, you’ll save on insurance and, of course, the cost of the car. For some, Uber and other rideshare services allow folks to forgo owning a car altogether.

If you must have a car, use a rewards credit card when purchasing gas, which can result in cash back, points or other credits. Keeping your tires properly inflated can increase gas mileage, which in turn reduces the amount of fuel you use while behind the wheel.


A sure-fire way to cut costs is to scale back on energy consumption at home. This can be done rather painlessly. The U.S. Department of Energy has identified a number of money-saving opportunities around the home; here are two examples:

  • How tightly sealed is your home? By weather sealing your home, which includes caulking, sealing or weatherstripping seams, cracks and openings to the outside, you could cut your heating and cooling bills by up to 20%.
  • You also might want to tweak your thermostat to save on air conditioning and heating bills. By dropping your thermostat seven to ten degrees for eight hours a day in the fall and winter, and turning it up in the spring and summer, you can save about 10% on your annual heating and cooling bills.

Another area to examine? Cable TV use. If you tend to gravitate to a select number of shows or channels, you may be able to downsize your plan by getting rid of extras you don’t need. Look at what you may be needlessly paying for as well. For example, if you have three TVs in the home, each with its own rented DVR box, ask yourself if you can get by with one, which can free up money paid to the cable company for both the DVR service on the other two TVs and the cost of the DVR boxes themselves. Depending on your viewing habits, you may also opt to get rid of cable entirely in favor of a much cheaper service that streams programs to your tablet, computer or phone.


The average U.S. household with any kind of debt, including mortgages, owes $131,431. While that’s a hefty sum, the good news is that there are plenty of ways to reduce that debt, beyond making your monthly payments on time. They include refinancing your mortgage and auto loans, and consolidating student loan debt.

As for credit card debt, balance transfers, when done right, can provide debt relief by allowing you to pay off one card or more by transferring the amount owed to a card with a lower interest rate. They also allow you to simplify your payments by keeping track of — and making — one payment per month rather than multiple payments.

When doing so, you want to be aware of any fees attached to the transaction, as well as when the lower interest rate transfer offer expires. You also want to watch out for fine print that may state that new purchases on the card do not qualify for the lower rate.


Whether it’s grocery bills, your child’s college meal plan or lunch brought back to your desk, the money spent on food amounts to a large part of the household budget: In 2014 (the most recent U.S. Department of Agriculture data available), Americans spent 5.5% of their disposable incomes on food at home and 4.3% on eating out.

A good way to cut food costs is to buy in bulk, which reduces the unit price of everything from pantry staples, like nuts and condiments, to meat and produce. If your family isn’t large enough to consume bulk food before it spoils, you may consider co-shopping with a family of a similar size. Buying generic can also help lower costs, as can cutting back on eating out by bringing your lunch to work and packing snacks instead of paying a premium at the movie theater or airport.

Coupon apps are another great way to save on groceries. Some, like SnipSnap, allow you to search for deals at certain stores and retailers and then download the corresponding coupons directly to your phone. Others, like Coupon Sherpa, allow you to search for product-specific coupons.

Much like buying gas, using a rewards credit card for groceries can reap benefits, including earning cash back at higher than normal percentage rates if offers are activated and used during specific windows of time.

There’s an App for That

You don’t have to go it alone when it comes to budgeting. Whether you’re trying to get a better handle on your entertainment budget, or you want to exert some self-control when it comes to discretionary spending, your smartphone can be your new best friend. Two app names that regularly appear at the top of reviewers’ lists, including that of Investopedia, are Mint and YNAB (You Need a Budget).

  • Mint, available for free from Intuit, Inc., allows you to see all your finances in one location, by linking your various accounts. You can identify trends in your spending, set up alerts for paying recurring monthly bills, and more.
  • Step up your budget management game with YNAB, thanks to its four “Rules”: Give Every Dollar A Job, Embrace Your True Expenses, Roll With The Punches, and Age Your Money. (After a free trial, YNAB charges a small monthly fee.)

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