I may have fallen back into old habits. Several years ago, when I was refreshing my life and beginning to control my finances, I made deep cuts into my expenses. I took on three roommates, paying only $325 a month for my portion of rent. I didn’t own a car and relied on mass transit for most of my transportation. When I did move out on my own, finding one of the least expensive apartments in town, I eliminated all but the most basic cable television.

There was more I could have done had I wanted to reduce my expenses, but I reached the point at which I was consistently investing and saving money every month.

As my income has grown over the past few years, I’ve allowed my expenses to follow. I moved into an apartment I actually like and feel comfortable spending some cash on unnecessary things I like, such as amateur coin collecting, amateur photography, and amateur high-definition entertainment enjoyment.

I’ve already thought of some ways to reduce my expenses by $10,000 a year. Consumer Reports has some suggestions for finding another $6,000 a year, but only a few apply to me. How about you?

Find cheaper auto insurance. I mentioned that several years ago I didn’t have a car. That wasn’t quite by choice; my license was suspended when I was younger for failure to pay speeding tickets. It would be easy to say that I received those tickets thanks to a stressful job working 100 hours a week and my failure to pay was because I had no money, but I should have been more responsible. Until I got rid of the car, my insurance was about $4,000 a year if I remember correctly. Now my insurance is about $1,500 a year, and I could only find that rate by shopping around for a while. It’s been several years since I’ve shopped around, so that’s something I will consider. I need to add renter’s insurance as well—something I’m sad to admit I’ve never had despite its reportedly low price.

Optimize your life insurance. Right now, my cat Rupert is the only living being that relies on my income to survive. I have not opted for life insurance yet as it will be generally unnecessary until I have a (human) family. According to Consumer Reports, insurance premiums have decreased on average, so it may be a good time to replace your policy with a new one. You may be able to get the same coverage for less.

Shop smart for food. Buying food for a single guy is not simple. Food is usually packaged for families. This means I usually end up spending more per meal and eating larger portions that I should be. I don’t enjoy spending time preparing and cooking dinner. I have accepted my failure at brown-bagging my lunch and moved on. Consumer Reports’ advice is tailored to a family, indicating on average an household could save $190 a month by shifting to less expensive food. My entire monthly grocery bill is about $190, though eating out (and ordering in) matches that.

Plan menus around sales on fresh poultry, fish, meat, dairy, and produce, and make use of leftovers. Avoid costly prepared meals. Eat more low-priced, high-nutrition foods such as beans and potatoes… Shop in lower-cost stores such as Aldi Foods, PriceRite, Costco, Trader Joe’s, Wal-Mart, and Sam’s Club, but be sure to compare prices. Try less-expensive store brands. Sign up for store discount cards. Stock up on sale-priced staples.

Stop paying bank fees. This is one of the most unnecessary expenses for just about everyone in the United States of America. There is rarely a reason that you should have to pay incidental or monthly fees for any basic banking service if you manage your money. Avoid overdraft fees or over-the-limit fees by being aware of your account balances. Avoid monthly or yearly maintenance fees by taking advantage of only free accounts—there are many to choose from if your bank insists on charging you a fee for your banking. Avoid cash withdrawal fees by using the right ATMs.

According to Consumer Reports, 52% of consumers don’t pay any bank fees, but the rest pay lots.

Optimize your telephone service. I don’t spend that much time on the phone. I could probably save a lot of money if I were to choose a prepaid cell phone plan. However, I chose a Blackberry plan with Verizon Wireless, which I use more for business, and I don’t intend on changing the plan.

I’ve helped other people look at their telephone usage habits and choosing a plan that better fits the amount of time they spend on the phone. On many plans, going over the allotted number of minutes can be very expensive. If you’re consistently exceeding your limit, you can save tons of money by switching plans.

Pay off your credit card. According to Consumerism Commentary, “On average, consumers who carry a balance owe $2,200, on which they pay 15.2 percent in annual interest charges.” Paying that much interest negates any progress you may be achieving with your savings or investments. To get rid of credit card debt, stop using the cards and then apply the Debt Avalanche.

It’s been several years since I’ve paid interest on a credit card, but I still pay about $30 a month on my student loan interest. I still have a student loan because several years ago, I applied some tuition reimbursement towards expenses rather than my loan. I probably should have done whatever possible to avoid that, but for whatever reason, it was the choice I made. At the time, the interest on the student loan was about 2% and I was earning more in my savings accounts, but that’s no longer the case. Therefore, I have been increasing my debt repayments every month this year, with the goal of vanquishing the remaining balance by the end of the year. If I decide that goal still makes sense, I’ll have to accelerate in order to achieve it.

According to Consumer Reports, the average family can save $500 by making the changes listed above. I have a feeling that many Consumerism Commentary readers are already optimized.

Cut your spending by $500 per month, Consumer Reports, August 2008 (subscription required)

I produce a lot of garbage, and I’m not talking about just my writing. Here’s one reason: Even though the grocery store is only about a block or two away from my apartment, I tend to take large shopping trips infrequently rather than smaller trips more frequently.

Here are the problems with this approach.

I’ve been going through a large number of plastic bags, producing more garbage than necessary. Formerly, I saved the plastic bags with the intention of reusing them for the next trip, but I never did so. This usually resulted in a ball of increasing size underneath the sink in the kitchen, consisting of crumpled plastic bags. Every once in a while, when I decided one particular ball of bags would never be used, they would go in the garbage and the process would restart.

Also, because I wait long between trips, I have a lot of food and paper products to buy, more than I can carry in one trip. Rather than walking two blocks to the store, I drive from one parking lot to the next to pile the full bags into my car, transport them back to my apartment, and carry them up to my second-floor apartment in multiple trips.

I’ve solved the first problem. Stop & Shop, my local grocery store, offers reusable fabric bags for sale. They cost $0.99 each and one fabric bag holds more than one plastic bag, and it does so more comfortably. Every time you bring a fabric bag back to the store and use it for your shopping, the cashier will provide a $0.05 credit per bag on your receipt.

I purchased ten bags in a recent shopping trip to help reduce my plastic usage. In order for this purchase to “pay off” for me, I’ll need to buy 198 bags of groceries. My initial purchase was probably too high—I didn’t realize the bags were so capacious. For one of my large shopping trips, I use only five or six bags. At that rate, it will take 33 to 36 trips to the groceries, or about three years, for me to “break even” on my purchase.

More importantly, I won’t be producing as much plastic garbage.

In terms of the second problem, my girlfriend suggested I purchase a cart to transport my groceries to eliminate the necessity of driving. It’s not a bad idea. It would reduce the short trips I take in my “gas-guzzling” Honda Civic and provide me with more exercise. I’m just about out of storage space in my apartment, however, so I’m not quite sure where I’d leave the cart when not in use. I understand there might be folding carts available, in which case, I could probably store the cart in the closet, so I’ll have to research this further.

RIS News, a retail technology publication, announced some interesting findings recently related to consumer shopping behavior.

According to Deborah Weinswig of Citi Investment Research, the recession is creating more bargain hunters and transforming our shopping style in four key ways:

1. “Trading Down” to Private Label
There’s a cost benefit to going generic, and store brand sales are increasing at stores like BJs, Costco and Target. People are becoming less willing to pay 20% more on average just for a label. Of course, this means the marketing folks out there are trying even harder to build brand loyalty to justify their premium prices.

2. “Trading Down” to Lower-Priced Products
Higher food costs (5.8% inflation in January 2008) are causing consumers to examine their grocery bills more closely, and grocers are commenting on a shift from “steak to chicken.” The USDA is forecasting more increases in the near term, so you may be seeing less filet mignon and more ramen noodles on your dinner table soon. Luckily, there are some great sites out there to help you achieve great culinary feats with less expensive ingredients.

3. “Trading Down” to Cheaper Channels
Not only are consumers buying less expensive goods, they’re also visiting more discount stores. RIS details how Wal-Mart is again trumping Target:

Around the last recession, Wal-Mart outcomped Target almost every month (5/00-7/03) and that reversed when the economy strengthened (8/03-11/07). Now for 3 months in a row, we have seen Wal-Mart outcomp Target and we believe this is the beginning of a longer-term trend.

4. “Trading In” From Restaurants
Cooking at home is becoming a more appealing option for many, as I myself can attest after spending $40 on 2 Pizzeria Uno chicken salads for dinner. (What was I thinking?)

2007 brought the greatest year-over-year increase in at-home food sales since the 1940s, a 240 basis point increase. After remaining flat since 2001, dining in grew to 53.2% of total food expenditures last year, and to 54.6% in January 2008. Perhaps we should thank Rachael Ray and her cult of the 30-minute meal.

Have your shopping styles been affected as the economy slows? What changes have you made?

Cost-Cutting Consumers Trade Down from Steak to Chicken [RIS News]

In 2007, the price of milk at the grocery store increased 12%. Spending on milk accounts for 12% of the “average” American household grocery budget, so this was a significant increase.

This year, the agriculture industry is predicting that milk prices will level out or even decrease thanks to an increase in supply. However, some analysts believe that any reduction in wholesale prices may not find its way to the grocery shelves.

I’m not an “average” American household. I purchase food for myself only. Not only that, I’m lactose intolerant, so I only use small amounts of milk in cooking, and I never drink the stuff.

I buy Lactaid brand 2% reduced fat milk, usually one quart per month. Today’s retail price at my grocery store for this brand is $4.19 for a half gallon. This is compared with the Tuscan Farms brand of milk (including lactose) at $2.69 for a half-gallon.

My milk is more expensive, but I don’t buy much of it. That limits my exposure to last year’s price increase.

Did you feel pain in the wallet last year as a result of increased milk prices and did you cut back on your milk purchases?

Image credit: fiskfisk
Holy cow! Consumers get a milk break [CNN Money]