Midyear a good time for a spending checkup

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If spending your money smarter was one of your New Year's resolutions, it is time to evaluate how much you have accomplished. Can you point to several areas of spending you've examined?

If not, maybe it is because you don't know where to start. Or maybe you don't have time to complete all the research it requires to be a smart consumer.

That's why on Dec. 31 we offered six easy, one-month tasks to set you on a path to smarter spending, from January through June.

To recap: track your spending for one month to identify wasteful leaks; stockpile non-perishable food when on sale; review term-life-insurance rates because they have plummeted in recent years; investigate the best home-phone plan to fit your calling habits; visit the library and a nearby dollar store to become familiar with what is free and cheap; and research better borrowing and savings rates for all the interest you pay and earn.

As the second half of 2007 approaches, here are six more easy, one-month tasks to help you through the end of the year:

-- July Television: Many popular television shows are in repeats during the summer. This is an ideal time to cut back your cable or satellite TV bill. This month, eliminate pay channels or drop to a lower tier of service. Be aggressive about what you cut. The reduction in service is only for one month, after which you could return to your previous level if you are miserable.

Make sure swapping services doesn't incur a fee. The point isn't to save a few bucks for one month but to feel what it is like to live with less TV service, which, if you continue, could save a lot of money. If it forces you to watch less TV, you could recapture time to spend with family, friends and hobbies.

-- August

Clothing: This month, buy one article of quality, name-brand used clothing at a thrift store or consignment shop. For the uninitiated, this is dipping your toe into the pool of secondhand clothing, a buying strategy that can save hundreds of dollars every year and allow you to dress in finer clothes than you could otherwise afford.

Purchasing one item for yourself can ease your mind about buying used clothing for others in the family, especially children. It could make you comfortable enough to buy a few back-to-school items secondhand. If the concept of used clothing is a turnoff, try a baby step by buying a secondhand-clothing accessory, such as a necktie or scarf.

-- September

Spending hiatus: On every Wednesday of this month, resolve not to spend any money. That means packing a lunch for work, forgoing your morning latte stop and other steps to eliminate unnecessary spending. This exercise will force you to plan your spending around Wednesdays and give you a feel for all your mindless daily spending. Of course, you can choose a different day of the week, but pick a typical day.

-- October

Light bulbs: Replace five of your most-used, non-dimmable light bulbs with compact fluorescent lamps, or CFLs. They are more expensive but will pay for themselves in short order because they last much longer than incandescent bulbs and use much less electricity. CFLs can last eight to 15 years and use one-quarter of the power of regular light bulbs. For the best buys, look for multipacks of CFLs at home centers and warehouse clubs.

-- November

Wireless phone: Americans spend far more for their wireless phone service than landline home service, and many are overspending. That is because with many wireless plans, airtime minutes that were paid for but unused disappear at the end of the month.

Resolve this month to right-size your wireless plan by comparing the number of minutes and features you use with what you are paying for. That will mean examining a typical month's bill and researching service-plan options offered by your provider and, perhaps, other providers. Light users who rack up less than 200 to 300 airtime minutes per month should check out prepaid plans, which probably would be more expensive per minute but cheaper overall.

-- December

Product research: During this gift-giving season, identify one relatively expensive item you planned to purchase and research it online. Read reviews of the best brands and models, using such resources as Amazon.com customer reviews and ConsumerSearch.com, which compile and evaluate reviews of products.

Then compare prices on your item. Spot-check prices at various online stores whose names you know. Use several price-comparison sites such as Froogle.com, MySimon.com, Shopzilla.com, DealTime.com and Shopping.com.

Whether you buy the item online doesn't matter. It is more important that you realize how easy it is to research products online and that you know what a competitive price is. The point is to buy better products at lower prices, the ultimate in smart spending.

Gregory Karp is a personal finance writer for The Morning Call, Allentown, Pa., a Tribune Co. newspaper. E-mail him at yourmoney@tribune.com. For additional discussion on spending wisely, see the Spending Smart blog at http://blogs.mcall.com/spendingsmart/.

Copyright © 2014, Los Angeles Times
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