Sometimes people are too close to their own situation to make rational decisions about how to cut costs or how to make some extra money to make ends meet. Unless you paid a lot of attention during tougher economic times – or watched your Depression-era parents save everything for recycling and reuse while watching every penny – you may not know how to make better use of your money.

For many, the obvious expenses have been reduced. More and more families are eating at home; many of them are having to learn how to cook. Eating out is expensive, whether you’re eating fast food or trying to eat healthy. An added benefit of eating at home is you have better control of the health factors of what you eat. Fast food has a lot of fat and sodium, as does prepared food that you buy to fix quickly at home. Cooking at home is not only less expensive – it’s better for you! Eating out in restaurants is definitely healthy – but also more expensive. If you’re looking to cut costs, start with your food budget. Eating out at a restaurant should be reserved for special occasions.

Auto dealers are making unprecedented deals on cars and car loans – but can you really afford it? The sales pitch is the same one that got many consumers in trouble in the first place! The loan may be 0% – but you still have to make the payments every month. If you have to have a car and you’re unable to get a used car loan at a decent rate, it may make sense to buy a new car at 0% – but plan on keeping the car for a very long time, so shop carefully. Remember that new cars lose a significant amount of their value the minute you drive them off the dealer’s lot. New or used, buy a car that you trust will be reliable for years after you’ve finished paying for it. Go to the library or go online and check consumer ratings so you select a car with a good record as far as reliability and low maintenance. Your goal is to get the best deal not only in financing, but on the car price and longevity.

Reconsider entertainment costs, starting with the cable TV. Do you really watch all the channels you pay for, enough to make it worth the monthly fee? Many of us have become so adjusted to the monthly costs we pay that we’re immune to them. Re-evaluate your channel lineup and consider dropping premium channels – you can always rent the DVDs when they’re available or watch the shows online. Going to the movies is also expensive because it isn’t just the price of the ticket. Do you really need to see the latest movie as soon as it’s released? Most likely, you’ll survive until it comes out on DVD, and then you can make a family night of it and make your own snacks instead of paying for high-priced concession stand snacks.

Sit down and write down your monthly expenses so you can see where your money goes – then start sacrificing or renegotiating. You can survive the economic downturn.

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