Seventy percent of Americans live paycheck to paycheck. Many have no emergency savings and are deeply in debt. If they lose a job most people would not be able to sustain their current lifestyle for more than a couple of weeks. Many Americans are routinely spending more than they make through the use of credit cards and borrowed money.



If you are among the majority who are not saving for emergencies first determine how you are spending. Go back through check stubs and credit card statements and determine how you are spending. Then look for areas where spending can be reduced.

While energy costs are going up, you may be able to save some on your utility bills through conservation efforts. A combination of tax credits and fuel savings might make a new furnace a cost saver over the long term, provided it is significantly more efficient than your existing furnace. Programmable thermostats might also save money. Set the thermostat at the minimum comfortable temperature in the winter and maximum comfortable temperature in the summer.

Cooking for yourself more and eating out less could also save money. Be realistic about your habits. For a busy family a supply of frozen entrees may be easier than cooking from scratch every night. If you cook only on weekends make double batches of everything that can be frozen and freeze half for a later meal. Label them with the date so that you don't waste money by leaving food in the freezer for several months then having to throw it out.

If clothing, books or other consumable products are your downfall plan activities for free time that keep you out of the mall and away from stores. If you have an overflowing closet, go through your clothes, plan your wardrobe around your lifestyle and needs, then take good quality used items to a clothing consignment shop. Use the money you get from the consignment shop to find a few good pieces that will complete a coordinated wardrobe. Give the worn and not so good extra clothes to a thrift shop or charity. They may sell the extremely worn pieces for rags, but they get some money from it and you don't have those rags cluttering up your closet and you can see what you do have to wear. Books can be taken to used book stores and a variety of other items to second hand shops or thrift stores. Keep track of everything you give away, because if you itemize your deductions you can deduct them with proper documentation.

For some people recreational spending is a problem. If you are deeply in debt you might have to sacrifice a few days on the slopes or an exotic vacation. Investigate where tourists go when they come to your area, then spend one vacation being a tourist in your own city or region. You can choose prime vacation time for that location without worrying about paying prime hotel prices.

If your debt is a serious problem and these measures won't cover it you may have to make more major changes. These changes are major because they may affect the image you are trying to project to the world or to your family. Do your children really need to go to private school? Will the public or charter schools in the area provide as good an education? If not, and scholarships are not an option, you may have to make some sacrifices in other areas. Studies have shown that graduates from Ivy League colleges do not necessarily earn more ten years later than graduate of state colleges unless they were of lower socio-economic status on entering college and made contacts and learned different values and goals in college that they wouldn't have otherwise, so if your child wants you to foot the bill for an exclusive college and that will increase your debt it may not be a good idea.

If car payments, insurance and gasoline constitute more than 15% of your income it may be time to sell your car and buy a smaller, more efficient or less expensive used car. If house payments, insurance, property taxes and other home expenses are more than 35% of your income, you may need to downsize. Americans today live in much larger houses than they did 50 years ago. Buying a smaller, older house may be just what you need to do to reduce spending so that it is within your income. You may even be able to find a smaller house closer to your workplace so that you can reduce your transportation costs.

If none of these cost reducing measures is enough to make your income meet your outgo you may need to look for other sources of income. A part-time home business, different job or a spouse returning to work may be the only solution.