Keep costs low

To stay within your budget and reach your goals, you might have to cut costs. Sometimes it can be painless to cut back -- especially if you've been spending money on unnecessary things. Even a small income can go a long way if you make minor changes such as eating in rather than dining out, using discount cards, opting for a matinee, or drinking a basic cup of coffee rather than a latte with a shot of flavored syrup and extra whipped cream.

• Find deals. Lower your monthly long-distance bill by replacing a land line with free Interent phone service, such as Skype. To find out how you also can save on cable, cell phone and electricity costs -- as well as travel and shopping -- see How to Save on Almost Everything.

• Lower insurance costs. You may be paying more than you have to for insurance. Comparison shop, consider raising your deductible and follow these other tips to lower your car insurance premium. You might also consider raising the deductible on your homeowners insurance to lower your monthly rate. And you can cut health insurance costs by pairing a high-deductible (low premium) policy with a health savings account, which lets you contribute pretax money to cover out-of-pocket medical expenses.

• Cut interest rates. You can significantly lower monthly loan and credit card payments (and the amount you'll pay over time) by getting the best-available interest rates. With credit cards, you've got a couple ways to lower rates. If you have a good credit history, call your credit card company to ask for a lower rate. Or find a card issuer that offers low fixed rates to cardholders with good credit. Or you can take advantage of low-interest introductory offers and balance transfers. Many credit card companies offer 0% interest on balance transfers for a limited time -- usually four to six months. With no interest, your monthly payments will make a bigger dent in your balance. This can be a great strategy for someone who is well organized. You'll have to keep track of when the introductory rates expire and be sure to pay up or move on.

  Your best bet, though, is to avoid using cards altogether. Find out how to escape the credit card trap.

  Refinancing your mortgage at a lower rate can reduce your monthly payments, freeing up money to pay off other debts. For example, cutting half a percentage point off a $200,000 loan with 7.5% interest can slash monthly payments to $1,322 from $1,389 and save you $8,000 over ten years. Our am I better off refinancing? calculator can help you crunch the numbers.

• Avoid unnecessary fees. You're probably well aware that you get slapped with a fee every time you're late on a credit card payment. You also probably know that you'll have to shell out a few extra bucks to use an ATM other than your own banks. But did you ever stop to think how these fees and others eat away at your budget? For example, why pay for a checking account when there are plenty of free ones out there? Even if you have free checking already, make sure you're not getting slapped with nonsufficient funds or other fees.

  If you have a brokerage or investment account, you also might be paying more in fees than you realize. For example, if you have an IRA with a brokerage or mutual fund company, you're probably paying for someone to manage the account. If you have stocks in that account, you might have to pay a commission every time you make a trade. There may be other fees, too, but you might not be aware of them because the expenses are deducted before the fund reports results to shareholders. Save on fees by using inexpensive online brokers, selecting low-cost mutual funds and making sure you are aware that some investment vehicles, such as annuities, come with higher fees.

  Boost your income

  Another way to help avoid living paycheck to paycheck is to increase your income -- without begging for a raise or switching careers. Start by adjusting the amount of taxes being withheld from your paycheck. Our user-friendly calculator can give you an idea of how many more withholding allowances you should be claiming on your W-4 form.

  Then look for other ways to keep more of your paycheck going into your pocket instead of Uncle Sam's. For example, employer-sponsored programs that allow you to contribute pre-tax money toward routine expenses -- such as health care, child care or retirement savings -- can help your paycheck go further. Or make the most of your cash by using tax-advantaged plans outside the workplace. Find out more.

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