Trying to Cut Back on Spending? Go BIG

If you've already done the easy stuff, go for major savings.

Dear New Frugal You,

I've already trimmed back my spending the obvious ways -- no more Starbucks, no movies, the cable-TV pay channels have all been turned off. Now I'm having no fun and am still falling behind. How do I cut back further? --Getting Desperate

Dear Desperate,

Your heart is in the right place. But we'd have to say that you have been majoring in the minors. While it's a good idea to avoid expensive lattes and cut the cable, the impact will probably be minimal (unless you have a serious caffeine addiction).

According to the U.S. Statistical Abstract (table 668), the average American family spends 63 percent of all their money in three categories:

1. Housing.
2. Transportation.
3. Food.

If we want to seriously cut our expenses, we'll need to hunt where the big expenses are.

Housing

Let's start our hunt with housing, which the U.S. Statistical Abstract says accounts for 34 percent of our expenses. If you haven't already refinanced (and you're not upside down), now is the time to do it. Mortgage rates are at 50-year lows. A refinance could save you hundreds each month.

Check your homeowners' insurance. Make your insurance company prove that they're the best every year or two. Get a comparison quote. A little effort could produce a couple of hundred bucks in savings.

Then check your utilities. Most electric companies will do a free energy audit. Their gurus will tell you how much your bill can be reduced each month and how to get those savings.

The good thing about saving on your home is that they're typically big, one-time deals. You refinance today and reap the savings as long as you have your mortgage.

Transportation

Next in our big expense hunt is transportation (17 percent of our expenses). Again, check your insurance. It's easy to compare quotes online. And perform any routine maintenance (think air filters and checking your tires -- both DIY jobs).

The bad news with auto savings is that you're pretty limited. At this point, you're pretty much done unless you can carpool or sell your ride.

Food

A great place to reduce our spending is in feeding ourselves (12 percent). The reason is simple: You buy food every day, and you can make small changes that won't seriously affect your lifestyle or health. And the bonus is that you'll be affecting a fairly large portion of your budget.

For busy families, the first step to reducing food costs is to prepare more food at home. For every $1 we spend on food, 43 cents of it is either prepared or eaten out. So eating at home could save big bucks.

"But I'm too busy," you say. "How can I avoid the drive-through?" Easy: by creatively using your freezer. These two freezer strategies can turn you into a first-class kitchen wizard!

The first is cooking for the freezer. It's really quite simple. Many meals that you make freeze well. Instead of making one meatloaf when you get home tonight, make three. Trust me, it's almost no extra effort. When two of them are about 75 percent cooked, pull them from the oven and package them for the freezer. Naturally, you'll mark what they are and when you made them. They will also be listed on an inventory sheet you'll add to the fridge door alongside Missy's first grade drawings.

The next time that you're tempted to pick up fast-food gut bombs, save the 20 bucks and take a meatloaf from your freezer. Your microwave will allow you to have it on your table in a few minutes with a minimum of effort. Add a potato, veggie and salad and you have a much healthier meal for a fraction of the cost. Plus you won't be cursing the clown who's holding up the drive-through line at McBurger Queen.

The second trick is even easier. At the end of the meal, you're going to package the leftovers into individual meals. Take a paper plate and put a portion of meat, potato and veggie onto the plate. Put it into a freezer bag and mark what it is and when you froze it. You've just created a frozen dinner! Make as many plates as you have leftovers. Pop them into the freezer and add to your fridge door inventory sheet.

Now, when you pick up Sonny from soccer practice, just drive home instead of heading to get in line at your local Kentucky Fried Okra Jr. When you get there, check the inventory and ask Sonny if he'd prefer the meatloaf from Monday or the fried chicken from last week. He gets to order what he wants. He'll be happy. You save money. And, by the way, these also make great lunches if you have a microwave at work.

These two tools will greatly reduce your need for restaurants. You'll find that you can eat steak at home for the price of hamburgers out, and you won't hear "Eyewww, leftovers" anymore. Finally, as an added bonus, because you'll be constantly using your fridge, you won't find green food hiding in there. That alone should be reason to try them!