by Raven Lebeau

Created on: March 19, 2009   Last Updated: January 30, 2010

We could all save money by wearing rags, eating nothing but dried beans, and living in a cardboard box, but no one wants to live that way if they have a choice. The best way to save money is by finding strategies to cut costs without making too many sacrifices in lifestyle. Here are few tips for saving money without missing out on the good things in life:

1. Pay down debts.

It's important to have an emergency fund, but once you have a savings cushion, paying down debt is the next step to financial health. By paying off credit card debt, car loans, and home mortgages early, you will spend less on interest overall and will save thousands of dollars in your lifetime. Paying down debts is usually better than putting money in a savings account because the interest rate you are paying on your debt is usually higher than what you are earning in your savings account. Putting a large amount of money in a savings account earning 3% interest while paying 5% interest on your mortgage is not logical.

2. Pick either a cell phone or a land line.

Most households can get by with only one or the other. If you use your cell phone a lot, cancel the land line to cut back on your monthly bills.

3. Consolidate debts.

If you are paying on a high interest credit card or personal loan, you may be able to save by consolidating it with your mortgage. If possible, continue making the same high payment you are making now after you consolidate. The motivation for doing this is that you will be paying more toward the principle than you were before, which means you can pay off the debt at a faster rate.

4. Cut heating and cooling costs.

Most of us overspend by heating and cooling our home to an ideal temperature even when no one is home. Instead of heating your home excessively in the winter, wear a warm sweater instead. In the summer, keep the thermostat high and wear cool clothing. If you have a basement, use it for activities such as watching TV or exercising; the basement will be naturally warmer in the winter and cooler in the summer, which means you can be comfortable there without spending a lot on energy.

5. Shop for clothing on end-of-season clearance.

If you must have new clothes, try to purchase them out of season. Buy your shorts in August and your sweaters in March and you will pay a fraction of the original price. Avoid ultra-trendy outfits and stick to classic fashions to avoid looking out of date.

6. Make home repair a hobby.

Fixing things around the house can be challenging, but it can also be personally satisfying, especially when that do-it-yourself repair saves you money. Just be sure not to get in "over your head," especially when it comes to electrical or plumbing repairs.

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