Summary:
Whether we are facing a full fledged recession or just an economic slowdown, it is important to save money where you can. This article provides some tips consumers can use to ride out the current downturn and emerge financially unscathed.

Details or Sample:
Economists define a recession as two consecutive quarters of negative growth, but ordinary consumers may be better attuned to downturns in the market. Whether the economic environment we find ourselves in qualifies as a recession or not, consumers are hurting, and many of them are looking for creative ways to drastically cut their spending and deal with the increased cost of living.

And there is no doubt that the cost of living has been on the rise. From double digit increases in the cost of gasoline and heating oil to smaller but still significant rises in the cost of food and other essentials, consumers are feeling pinched from all sides. As businesses begin to feel the pinch, wages are likely to be depressed, making a bad situation for workers even worse. With this kind of economy it is no wonder so many people are looking for new ways to save.

Dealing with a downturn like this one calls for strategies beyond ditching the $4 cup of coffee and brown bagging lunch every day. In order to make ends meet many consumers will have to make more drastic lifestyle choices. While not every cost saving tip listed here will be right for everyone, these tips should give everyone some food for thought.

Downsizing Transportation
The cost of a gallon of gasoline has figured largely in the pain consumers are feeling, so it only seems reasonable to start with transportation. There are some ways that workers can cut the cost of getting from here to there – some are easy to do, others are a little harder, and others may be too drastic for many workers to accept.

Option #1 – Ditch the New Car and Buy Used
One option workers feeling the pinch can consider is selling that expensive new car and seeking a more affordable form of transportation. The feasibility of this approach will depend on a number of factors, including how much is owed on the car, what it is worth and the availability of quality used cars in the area. For those who can make it work, however, this approach can end up saving hundreds of dollars a month. Some consumers may even be able to eliminate the monthly car payment altogether without sacrificing reliable transportation.

Option #2 – Become a One Car Family
Not too long ago it was rare for a family to own more than one automobile, but these days it seems like every driveway contains at least 2 or 3 vehicles. Going back to the days of the one car family can cut transportation costs significantly and help cash strapped workers deal with the current downturn. Of course this move will require a great deal of sacrifice, and it may not be a workable solution for every family. However, those who are struggling to make ends meet may want to at least consider this option, no matter how unpalatable it may seem at first blush.

Option #3 – Ditch the Car Altogether
This may be the most painful option of all for many people, and it will not be a feasible option for many workers. Public transportation options vary widely from place to place, with some communities very well served and others receiving no service at all. Even so, those workers with a good public transportation system to rely on may want to consider giving up the car and pocketing the cost savings. When calculating the potential savings of this move, be sure to include not only the monthly car payment but the cost of gas, automobile insurance and maintenance as well.

Cutting the Cord
Cell phones and telephone services are a big cost for most households, and many consumers are paying for services they do not want or need. Taking a hard look at the monthly bill for both the land line and cell phone can be a good way to cut costs in the current economic climate.

Some consumers may simply be able to eliminate unwanted or unneeded services, while others may want to consider ditching the cell phone altogether. Alternatively consumers who use their cell phones for virtually all communication may be able to get rid of the landline and free themselves from that monthly expense.

An alternative to ditching cell phone service is to opt for a prepaid cell phone. This option works best for casual cell phone users, and those who use their phones all the time may find that a prepaid service actually costs more. For infrequent use, however, it is hard to beat the convenience and low cost of a prepaid phone. Making this change can be a good way to eliminate one more costly monthly bill.

Watch Your TV Costs
With all the other monthly bills to worry about, the cost of cable television and other pay services can get lost in the shuffle, but those costs can be significant. Depending on the services selected, the cost of watching TV can head north of $100 a month – a significant sum for those struggling just to get by. For many people cutting the cable will be a drastic step, while others may be able to make the change quite easily. No matter how important or unimportant cable TV is, however, it is a good idea to at least consider the cost savings that could accrue from this simple change.

Many dedicated cable viewers have found that they have been able to cancel their cable subscription and replace it with movies by mail service like Nettle or Blockbuster Online. For a fraction of the cost of cable TV those movie lovers are able to enjoy a steady stream of the latest entertainment, and pocket the savings to boot.

Look at the Roof Over Your Head
Cash strapped homeowners may find that downsizing the home they live in is a good move, even in the current housing market. The value of the home may have fallen, of course, but that means that the cost of the smaller home down the block will have fallen as well. Since costs are down across the board in many neighborhoods, there may not be a real loss at all.

Many homeowners, especially those with children who have moved out of the home, find themselves with more home than they need. While a larger home may have made sense when the kids were still in the nest, that extra space may now be a drain on the family’s finances. After all, a larger home will be more expensive to heat and maintain, and the real estate taxes are likely to be much higher as well. By selling the existing home and moving to a smaller one, homeowners can pocket the price difference while enjoying a lower cost of living in the future.

While these options may not be right for everyone, it is a good idea for everyone feeling the pinch of the current economic downturn to take a look at the options that can make their own lives easier and more financially secure. While not everyone is ready to ditch the family car and head to the nearest bus stop, everyone can cut back in smaller ways. Learning these cost cutting techniques not only helps us prepare for the next recession but for a financially secure retirement as well.

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