Budget Now for Holiday Spending

It's tough sticking to your budget any time of year, but the holiday season presents special challenges with so many unexpected expenses and temptations. If you sometimes fall prey to holiday overspending, you might want to look for year-round small spending cuts in other areas of your life that, when added together, can result in big savings.

Here are a few suggestions:

Personal finances:

• If you have low-deductible homeowners, renters or auto insurance, ask how much your premiums would drop by raising the deductible to $500 or $1,000 – it could be 15 to 30 percent or more.
• Cancel underutilized phone and cable services, magazine subscriptions, gym memberships and other "extras" you're not using.
• Before shopping at chain stores, check with online gift card resellers like Plastic Jungle and CardWoo where you can buy gift cards at a discount. Combine the gift card with a coupon or discount code to save even more.
• Kick bad habits. Smoking one $6 pack of cigarettes a day costs about $2,200 a year, not to mention additional medical and lost-work costs.

In the home:

• By lowering your thermostat 10°–15° for eight hours you can reduce your home heating bill by 10 percent or more. For a $400 monthly bill, that's $40 in savings.
• Insulate your water heater and outgoing pipes to reduce heat loss and save 4 to 9 percent in water-heating costs. Also, try lowering the temperature to 120° for additional savings.
• Beginning January 1, 2012, traditional incandescent light bulbs will begin phasing out (starting with 100 watt bulbs) in favor of more efficient models that use 25 to 80 percent less energy. By upgrading 15 bulbs, you could save about $50 a year on utilities.

In the car:

• Aggressive driving (speeding, rapid acceleration and braking) wastes gas and can lower gas mileage by 33 percent on the highway. By driving sensibly, you could save about $1.20 for each $3.65 gallon of gas.
• Fuel economy drops rapidly at higher speeds. For each 5 mph you exceed 60 mph, it's like paying an additional $0.29 per gallon of gas.
• Avoid keeping unnecessary heavy items in your car – each extra 100 pounds reduces your mpg by up to 2 percent.
• Use websites like GasBuddy.com (which has free smartphone apps) and GasPriceWatch.com, where motorists share up-to-the-minute tips on where to find low-priced fuel.

Health care tips:

• Consider generic vs. brand-name drugs; copayments are usually much lower. Medtipster.com lets you search for generics by cost, by local zip code.
• Ask whether your insurance offers quantity discounts for mail-order prescriptions. Often, the copayment for a 60- or 90-day supply is the same as a 30-day supply at a regular pharmacy.
• Ask your doctor about pill-splitting. Many drugs come in double-dosage tablets that cost the same as a lower dosage. (Caution: Some pills should never be split, so always ask your doctor or pharmacist first.)

For more cost-saving ideas, check out AARP's "Save Money on Everything" site (www.aarp.org/money/budgeting-saving), www.americasaves.org, and Practical Money Skills for Life (www.practicalmoneyskills.com), a free personal financial management program run by Visa Inc. that offers savings and budgeting tools, including a Holiday Budgeting Center.

By trimming a few dollars here and there you're suddenly saving hundreds or thousands of dollars a year – enough to tide you through the holidays and start a vacation fund for next summer.