The Winter Cash Crunch: 5 Areas Where You Can Save Money

Many people find they struggle financially during the post-Christmas winter months. Holiday credit card bills come in, and combined with higher energy and other winter expenses can put a strain on an otherwise balanced household budget.  Of course, we all know that paying down those high interest credit cards is a good debt solution, but where do you find the extra cash?  If you don’t have an immediate solution to make extra money, then your next step is to stretch the dollars you do have as far as possible.

1. Reduce Your Heating Expenses
Cold weather means higher heating and electricity costs. One of the easiest ways to save on heating costs is to install a programmable thermostat. The programmable thermostat can automatically reduce room temperature while you’re at work or sleeping—and heat savings add up over time.  Make sure to clean or replace your furnace air filter too so that the fan motor won’t have to work as hard or as long to get the heat where you want it.  If you have one of the new “smart meters”, electricity costs can be reduced by paying attention to when you use electricity.  Avoiding “on-peak” times for high load activities like clothes drying can save a lot of money over time.  Even turning off lights when you are not in the room will save electricity—and save on the cost of prematurely burnt-out light bulbs. 

2.Drive Smart
Your car is another potential area for savings. Perhaps obvious, but the easiest way to save money is to drive less by combining a bunch of trips into one, or carpooling with others. You can also save on fuel by making sure your tires are properly inflated and that you’re doing regular maintenance, such as oil changes and replacing your air filter.

3. Shop Smart
Grocery shopping also relates to car expenses.  Sometimes people go out several times a week to pick up groceries, but with a little planning, they might only have to go once or twice. While it’s tempting to go to a store farther away to get a ‘good deal’, it’s important to consider whether you are actually saving money once you factor in the travel costs.  That said, it’s definitely worth looking at store flyers for sales to help figure out where you will shop that week. While some people dismiss ‘coupon-clipping’ as a way to save money, it can make a significant difference over time if you focus on finding coupons for the things you buy most regularly.  Some of these coupons are now easy to find on-line (no ‘clipping’ required!)  Premium grocery stores feature fancy displays and more unique products, but that generally means that the groceries you buy there will cost more.  Look for grocery chains that focus on providing good value on the basics.  If possible, try to buy locally grown or made products as they will often be cheaper given lower transportation costs getting those items to the store.

4. Buy Second Hand
A big challenge for parents in the winter months is the cost of kids’ clothing—boots, coats, snowsuits, and all the accessories. These items can really add up and in most cases, kids grow out of them long before they wear out.  Formal or informal clothing exchanges, organized through a local school or just through parent networks can really help reduce these costs.  Similar exchanges exist for kids’ sports equipment.  If an exchange program like this doesn’t exist in your area, maybe it’s worth getting together with other parents to start one.

5. Rethink Your Entertainment Budget
Some would say that entertainment is less of a necessity than other expenses and should be easier to reduce to save money.  Others would argue it’s a necessary distraction in order to stay sane during the long Canadian winter!  There is definitely middle ground though and there are ways to save money that won’t significantly reduce your enjoyment. Part of the solution is figuring out what you actually do as opposed to what you think you will do. Many people have extensive cable or satellite packages and pay a premium for that, yet much of the content they never watch.  In some cases, it may make more financial sense to use a pay-per-view option rather than pay for the monthly package you are not fully taking advantage of.  For those who enjoy watching older programs or re-runs, maybe an on-line provider would give you what you want at a fraction of the monthly cost of a cable or satellite provider.

While the cost savings outlined above may seem individually  insignificant, combined they can put hundreds of dollars back in your pocket each month.  That money can then be used to pay down debt and reduce your monthly interest costs.  Remember to pay down the highest interest debt first.  This is an effective debt solution strategy, and over time will put even more money back in your pocket so you can get the things in life you really want.