With smart money habits
Beyond knowing where and how to shop for the things your family needs, to really take being frugal to the next level, it's key to pick up smart money habits.
"The first thing I recommend is to save all your receipts for one month, and write it all down in categories," McCoy says. "And take a very honest look at what you really spend. You will see how much fat is in there."
Tracking spending is the first step to establishing a budget, and can help you recognize and quash poor spending habits. When you see your daily $8 lunches adding up on paper, you may be stopped in your tracks -- especially when you realize how much you could save by brown-bagging it.
We live in the age of plastic. It's easier to spend money than it ever has been before, and the money itself is practically invisible, says Gutter.
"One of the ways (families) budget is to buy everything with cash," he says. "It's extreme, but it works."
Another not-so-extreme, but maybe equally hard, way to cut costs is to simply let go of keeping up with the Joneses, Gutter says. It may be hard to resist temptation when your neighbor buys a big-screen TV or your son says he's the only kid at school without the hot new gaming system. But at these times, remembering your priorities -- whether your frugality stems from a desire to save for college, retirement or even a memorable family vacation -- can really help.
And don't forget to get your kids in on the action, Gutter says. He recommends showing your children how you pay bills and that things such as electricity and cable have to be paid for. When shopping, he suggests letting children pick out small items or giving them a price limit. At the grocery store, try giving your children two quarters each and allowing them to buy two gumballs apiece, Gutter says.
"Kids catch on to that sort of thing, and need to appreciate that money is not unlimited," Gutter says. No need to terrify them, he says, but be realistic. You might tell your little ones, "we can go bowling tonight, but tomorrow night we have to stay home."
- If you do a lot of brand-name shopping, a Upromise account can be helpful in funding a 529 plan. When shopping online or at a store with a Upromise symbol, a specified amount of the earnings from the purchase all go into the 529 account.
- Use online budgeting sites to help track where your spending is going and show where you can save more. Sometimes having a visual of your spending helps.
- If your child asks for a big-ticket item, draw up a "payment plan." For instance, tell your child that eight weeks of mowing the lawn and helping with yardwork can be exchanged for a $200 skateboard.
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