Simple cost-cutting steps that won't compromise quality of life

If you think living on less money will require a painful change in your lifestyle, think again. With a little research, you’ll find it’s possible to save money and still live well A savvy bargain hunter can cut costs and save money by following these six simple steps:

1) Figure Out Where Your Money Is Going

You can’t find ways to live on less if you don’t know how you’re living now--and most Americans don't. A scant 40 percent keep track of their monthly expenses, according to a survey conducted by the Princeton Research Associates International.

Keep a journal of every nickel, dime and dollar you spend for at least two weeks. Use those tallies to analyze your cash flow and decide where to rein in your spending.

Once you document your spending patterns, it's a lot easier to start taking control and cutting back where needed.

2) Start a Budget

Although it may sound like a torture device, a budget is simply a way to keep expenses steady so you don't overspend. The trick is to make sure your budget covers your basic fixed expenses (rent or mortgage, car payments, insurance, etc.) while also helping you to control the variable ones (groceries, utilities, entertainment and so forth).

Variable expenses and the money you shell out for unexpected events (a computer crash, car repair) are typical budget busters. Two ways to stay on track:

3) Enjoy Low-Cost Luxuries

Just because you need to tighten your belt, it doesn't mean you must renounce all creature comforts. Some tips for enjoying high-end treats at bargain prices:

4) Spend Less, Eat Well

If you think of your mother when you hear the words “clipping coupons,” that’s because she knew what she was doing: Manufacturers want you to buy their products and stores want your dollars, so both regularly offer you a lower price through coupons. Take the time to find and use them.

Pick up the weekend papers, grab local grocery flyers, or visit a website like www.couponmom.com to find deals available at stores near you.

Don't worry--you won't get stuck eating ramen and Rice-a-roni. Most stores and even gourmet food shops offer better cuts of meat, cheeses and produce at reduced prices on a regular basis. Keep your eyes peeled for the filet mignon markdown.

5) Buy Used, On Sale, and Online

"Never pay full price," as the saying goes. These days, bargain hunters have no end of options.

Online retailers offer great deals: Some, including half.com, sell new items at discount prices. Others, like Amazon.com and eBay, offer a plethora of used goods as well as brand-new products.

Craigslist.org is a great resource for people in your area selling everything from furniture and stereo equipment to sports gear and computers—all used. Freecycle.org can even connect you with people giving away a wide variety of useful goods for free.

6) Seek Out Free Events and Entertainment

Whether you attend a talk at a local university or hike in a nearby state park, there are countless ways to enjoy yourself for little or no money.

Next time you’re considering a night on the town, look in your local paper for a concert in the park or an art gallery opening.

Aim to have more fun at home. Host a movie night with friends: You make dinner and rent a movie, they bring drinks and voila! This provides a great time for a lot less cash than the usual night out.

THE BOTTOM LINE

Through a combination of keeping a close eye on your finances, shopping around for great values and being proactive about looking for savings, you can live well on less money. There’s no need to go without--just be smarter about how you spend.