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10 Ways to Save in 2012

The combination of the rising cost of goods and stagnant pay wages have begun attacking American paychecks on both ends. Many U.S. consumers are still on autopilot when it comes to their spending

The combination of the rising cost of goods and stagnant pay wages have begun attacking American paychecks on both ends. Many U.S. consumers are still on autopilot when it comes to their spending in spite of the changes in prices and dollar value. Paychecks aren’t going as far as they used to, and Americans will be in for a surprise if they don’t adjust their habits to account for changing prices.

A release from the Census Bureau indicated that the average American household income was just over $49,000 in 2010, about where it was 15 years earlier. During that period though, goods–from food to clothing and other items–have become more expensive, but many people haven’t adjusted their spending habits to account for the changes.  This can lead to a lack of saving and even debt, two predicaments Americans would likely rather not put themselves in.

1. Eliminate Your Home Phone

Home phones have become increasingly superfluous for Americans with cellular service. If people are trying to reach you or a family member, they’ll often go direct to calling mobile. Today, over 21 percent of homes are wireless and that number will continue to rise as Americans look to reduce their monthly bills.

2. Cut off Your Cable

Most TV shows today are available on the internet and people who only watch a few of them may want to shut their cable off in favor of internet providers like Hulu and Netflix (NFLX).  People with a busy schedule can watch the show they want on their own time by subscribing to Hulu Plus, which starts at $7.99 a month. Granted, turning off cable doesn’t work for everyone but with the average digital cable customer paying around $75 a month in 2010 according to Centris, it amounts to annual savings of over $800. Purchasing the equipment to sync these programs to the television, like an Apple TV (AAPL) costs about the same as a single month of cable for some households.

This year may be an especially good time to make the switch, analysts are predicting that cable costs will continue to rise by about 5 percent on an annual basis, an added expense that many Americans swallow without thought.

3. Buy Generic

Generic brands are largely the same as their original counterparts. If you’re a sucker for expensive shampoos or conditioners, head to a beauty supply store that may sell a generic version for less than half the price for a larger quantity. The same logic can be applied to household drugs and prescriptions from pain relievers to birth control pills.

4. Buy in Bulk

Many of us are in the habit of heading to the grocery store and purchasing only the ingredients for the meal we’re making that day. Shifting habits and planning a menu in advance for the week can help ingredients serve double duty and prevent waster. Even better, buy important items you know you’ll use in bulk at places like Costco (COST) and Sam’s Club (WMT). This includes, paper towels, napkins, hand soap, q-tips, mouthwash, toothpaste etc. For consumption purposes, considering olive and canola oil, canned items like chicken and vegetable stocks, beans, rice etc. which will save you trips to the store and save you money. The exact amount buying in bulk will save varies based on the person and size of the family

5. Spend Within Your Means

Credit Cards can be great to tide us over a few weeks until that paycheck clears, but spending beyond your means will mean paying for it later in interest charges. If it’s going to be too difficult to repay your bill each month in full, it might not be worth buying it.

6. Shop Online

Our desire for designer brands has not weakened because of the recession and many of us will continue to insist that the high quality and classic designs make it all worth it. Consider purchasing big ticket items online where major discounts are often available. Sites like Amazon allow Americans to purchase high end names in areas from clothing to electronics for less. Daily deal sites can also be helpful. Sites from MyHabit to Gilt Group offer fashions and home décor from top designers at extreme discounts. Other options include picking up Groupon (GRPN) and Living Social deals which can also help consumers save money. Reserve deals on the likes of the fashion blog Refinery 29 are also worth looking into. $75 can often purchase as much as $150 in merchandise, meaning top brands at boutiques are essentially half-off for those looking for style or gifts on a budget.

Additionally, Amazon’s price check app may also be an excellent option to insure you’re getting the best deal on necessary purchases.

7. Reduce Your Car insurance Bill

If Geico (BRK.A) commercials haven’t convinced you there are ways to save money on car insurance yet, it’s time to make a change. Simple actions like raising the deductible from $250 to $1000 (you probably won’t report an incident if the cost is that low anyway) can help slash the monthly bill considerably.

8. Refinancing Your Home

Americans especially strapped for cash in 2012 may want to consider something dramatic like refinancing their home. Right now, mortgage rates for 15-20 and 20 year mortgages are at historical lows. Granted, it will be difficult to refinance for those that don’t have excellent credit and a steady job, but those who do can save as much as a full percent in interest. The frequency of people looking to refinance their homes was at one of its historical highs earlier in the year due to the attractive rates.

9. Buy Energy Saving Light Bulbs/Use Less Electricity

The cost of electricity is rising, steeply. As of 2010, the average U.S. household paid $1,419 for electricity. This is roughly $300 more than in 2005 and that number will continue to rise. Between 1990-2005 the rate was mostly flat and many Americans have scarcely realized the trend.  This surprising increase is draining American wallets on a monthly basis though. With electricity more expensive, it may be wise to try to use less of it. Buying energy saving light bulbs and unplugging items like cell phone, chargers and other items that suck up electricity even when they’re not in use, may add up long-term.

10. Use Travel Sites

In additional to electricity, the cost of jet-fuel has gone up enormously in recent years, making it more difficult to travel on a budget. For those planning vacations in 2012, buy tickets early and with sites like (PCLN). If you are able to be flexible about flight times, consider bidding on tickets for savings of as much as 40 percent. and Travelzoo (TZOO), may also help travelers get the most for their money in terms of lodging and car rentals.

The saying that there is no such thing as a free lunch is very much true for Robinhood.