How to spend less on the big three

We all need food, clothing, and shelter. Here are actionable tips to save money on these basic needs …

We may think that we need a lot of things.

We may think we need cable TV, our morning coffee and bagel, a couple of pints at the pub each Friday, or a really big house with a mortgage that the lender had to “make work for our income.”

Needs vs. wants

These aren't really needs when we get down to it, of course. They're wants.

The stuff we really need — after air, of course! — are (a) food (and clean water) in our stomachs, (b) clothes on our backs, and (c) shelter over our heads.  To this, you might add basic medical care, education, and a few other very important things.

Most people (especially if you're reading this now, and especially me) can stand to cut out a lot of non-essential items if needed. We can downsize and simplify.

Doing this isn't necessarily fun, but it can be done. Moreover, what's spent on the essentials can be trimmed down as well by doing the little money-saving things again.

Spend less on food

Here are a few ways to get by on spending less for food:

• Consider generic brands over name brands. Generic or store brands are usually (but not always) cheaper than the name brand, and for some products, they're comparable or even better than the name brands. I prefer store brand diet soda in some cases because I like the taste of one sweetener over another.
• Use coupons for items you buy anyway. You can get them a number of places, like your weekend newspaper, from magazines, online at the websites for the products, or online at places like MyPoints.
• Substitute less expensive foods. How about oatmeal instead of cereal? How about eggs instead of meat? How about rice and beans?
• Buy food that requires more preparation or reconstitution. As in dried beans over canned beans, dehydrated milk over milk in a carton, raw oatmeal over instant oatmeal, or big bags of rice over instant rice. The other advantage of reconstituting food is that it may keep longer than the “fresh” food.
• Buy food with less packaging.  Packaging means extra cost, and the food tastes the same if it can be resealed and consumed in time. Binder clips work fine to keep “family-size” snack bags shut. Reusable storage containers are great for all kinds of food storage.
• Buy in bulk if the price is right and if you know you'll use what you buy. We buy rice 50 pounds at a time, and use it. I buy the big Costco-size box of oatmeal and eat it. It usually saves money to buy in quantity.
• Spend more at the grocery store and less at the restaurant. The cost savings is clear here. Eat in with friends as opposed to eating out with friends.
• Learn a few easy, cheap recipes. I know how to cook rice well enough so that I can prepare a cheap, filling lunch (and dinner sometimes) merely by putting a few ounces of beans over the top with some Worcestershire sauce. Heck, adding rice to a can of soup works, too.
• Be diligent about consuming leftovers. Odds are you'll only be eating the same stuff a few days in a row at most. (Except at Thanksgiving: It's turkey leftovers for at least a week!)

Save money on clothing

Cut your clothing bills, too:

• Make your clothes last. Making things last can be a money-saver.  My wife is an excellent sewer and has given some of my clothes an extra life. But even before that, be kind to your clothes in the washer and don't dry them too much.
• Check out yard sales. We've found great deals on baby clothes at yard sales, as in maybe a dime apiece for a bagful. Teen and adult clothes aren't quite that fire-sale, but the prices are still great. We usually look for clothes there.
• Check out thrift shops. Sometimes the donated clothing has hardly been worn.  The bigger ones usually have a good selection of sizes.  Sometimes they run sales to make room for things. Sometimes the organization in the thrift store isn't the best, so it may take a while to find things. The prices are usually a fraction of what they'd be new in a store.
• Check out consignment shops. These are perceived as a little higher-brow than thrift stores but the premise is the same: buy used and save.
• Check out the clearance racks in department stores. Some department stores perpetually mark things up just to mark them down, but there are still good deals to be had at places like Macy's or Kohl's. Since my wife has a Macy's store charge card she gets special coupons that get her some really good deals. Wal-Mart's hard to beat, too.
• Check out eBay. There's always eBay! They've been getting much more buyer-friendly these days. Buyers cannot receive negative feedback anymore, and eBay is also waging war against inflated shipping charges (which is in their interest, but that's another story).

Cut costs on shelter

Cutting costs on shelter can be a touchy subject but please remember, it boils down to a roof over your head:

• If you're renting, think very carefully before buying a house. Owning a house is a worthwhile goal but it can be very expensive.  During the real estate bubble times of the past few years, it was more expensive to own a house than it was to rent. Or, if it was affordable to own a house, in some areas, it would become too expensive later (adjustable rate mortgages). The start-up costs can be a bit of a shock.  Plus, you're a lot less mobile in a home than in a rented apartment.
• Reduce operating costs of your living space. Keep the temperature warmer in the summer and cooler in the winter. Use compact fluorescent lightbulbs where you can.  Seal cracks where heat (or cool air) can escape. Don't use the clothes dryer for one pair of socks. And so forth.
• Reduce financing costs of your living space. Pay the mortgage (or rent) on time. Consider paying the mortgage down a little faster.  Consider refinancing an adjustable-rate mortgage to a fixed-rate mortgage to remove interest rate risk and take advantage of a depreciating currency. Work to get rid of private mortgage insurance as soon as possible.
• Test the waters for signs of trouble. Is the checkbook balance going down month by month? Why? Is it due to increasing costs associated with your living space? Is it possible to move into a cheaper living space if the costs of your current living space are getting out of control? (A good friend realized this. His family had built a larger house and had been renting their original, smaller house. The costs of the larger house were too much, so they are working to sell off that one and move back into their original house. Hey, it happens, but they recognized what the problem was and are fixing it.)
• Can someone share your living space?  Can you take on a boarder or a roommate?  An unmarried woman at work has a house and has taken on a roommate to subsidize her housing cost.  Alan Corey did this to great benefit; he took the smallest room in the house so that he could rent out the larger ones for more money.
• No affordable options in your area? Since moving is costly, it's usually easier to cut other expenses before contemplating a move, especially one out of town to a less expensive area. But if nothing else seems to work, this is an option. It may mean leaving friends and family and finding another job, but the housing cost issue can go away if the price difference is large enough.
• What if the worst happens and you lose your living space? There are some options. They're not great options, obviously, but better than nothing. Living after foreclosure or eviction might mean moving in with someone who will take you (and your family if they're involved).  It can mean finding a church or other group that will take you as a “shut-in.” It could mean taking whatever job you can and renting by the week (Barbara Ehrenreich, author of Nickel and Dimed found this to be a tough life ). Even more simply, it could mean pitching a tent or sleeping in your car. This kind of living isn't something I'd wish on anyone, but unfortunately, more people will be thrust into this kind of situation. And in any case, it doesn't have to be forever.