The holidays are over. Surviving Aunt Agatha's visit, Christmas shopping, tree-trimming, house-trimming, Christmas dinner and gift returns was easy. Y2K was a breeze. But restoring the shattered remains of your bank account? Now, that's another matter. With the arrival of the new year comes the resolution heard 'round the world: "I'm going to save money this year." You're going to make wiser purchases, buy in bulk and eat peanut butter out of the same 10-pound, industrial-sized can from the Super Saver for the next two years. All of these belt-tightening measures are meant to save you money for that move-up house you've been dreaming about, the remodeling job on that outdated, olive-green kitchen of yours or simply for your retirement fund, which has dwindled to a paltry sum.

Have you ever taken an inventory of your possessions? All of those knick-knacks on your shelves set you back some serious money, and do you even notice them anymore? They're collecting dust, and the only time they seem to attract your attention is when it suddenly occurs to you that living admist so much clutter is stressing you out. Deep within the bowels of your kitchen cupboards is an appliance museum: the pasta maker you had to have but never used (who has the time?), the espresso maker that was going to fill your home with the aroma of fresh java every morning (not once), the wok that was going to inspire you to begin preparing cutting-edge Asian cuisine ... and alas, the only thing it's holding is other dusty appliances.

So, in the spirit of a new century and a new millennium, you've resolved to save money. Relax ... it's not as difficult as you might imagine. The first step involves grabbing a pad of paper and a pen, and making a list of items you need and items you want. Determining what you need is relatively easy: You need food. You need transportation, clothing (although not as much as Ivana Trump), you need a roof over your head (and not necessarily one with six skylights and two chimneys), and you need occasional household maintenance (chimney cleaning, air conditioner/heater inspection and repair, pest control, etc.).

Of course, there's a lot of gray area within these needs. Transportation doesn't necessarily imply a Lexus, but it doesn't mean a tricycle, either. You don't have to live like a monk; you just have to live within your means. If a car is higher up on your list of needs -- you spend lots of time in it each day, and comfort is a priority to you -- you may choose to spend a bit more in this area. As long as that doesn't mean macaroni and cheese for a year, that's fine.

Many people find that what they've labeled "needs" are actually "wants." So they purchase expensive "needs" -- the Lexus, the house with the hefty mortgage, the personal shopper at the department store. Those needs soon translate into bankruptcy. So make sure that your needs are precisely that.

Buy in bulk, but within reason. "Price clubs" at large warehouses can be a smart solution to items your family uses constantly. But be realistic. Don't commit your family to meatballs for a month because a 5-pound bag was the smallest one they sold. When you're visiting the grocery store, be prepared to purchase items that aren't on your list (and while we're on the subject, be sure to keep a list). You'll discover some items that are on special that weren't on your grocery list. Buy them now, and set them back for later -- if they're items your family enjoys. Don't limit yourself to one brand only. Be flexible enough to buy whatever brand is on sale. Nine times out of 10, you'll find that generic brands taste just as good (Mom was right). Keep your grocery store's weekly circulars, and circle the items you need. Clip coupons, and don't be afraid to use them, especially if your store has double- and triple-coupon days. If you're always forgetting your coupons at home, keep them in your wallet or glove compartment in the car.

Consider your lifestyle habits. When you go out to lunch with friends, do you head to the hottest (read: most expensive) restaurant in town? This is hardly a problem if you're meeting your friends there on occasion -- say, once a month -- but if the waitstaff knows you by name, maybe it's time to start meeting your friends elsewhere if you're going to make these lunches a regular habit. Save the expensive meals for an occasional treat. Or go to the expensive restaurant twice a month, and simply eat out less often to compensate. All of those $10 lunches can translate into $50 dinner at an upscale restaurant. The reality is that many of those $10 lunches are comprised of foods you could have prepared at home and with minimal effort. Brown-bagging it more often will literally give you the ability to patronize restaurants that serve innovative cuisine that exceeds your own capabilities in the kitchen.

Ask about refund policies before you purchase anything, and think twice about buying items with no-return stipulations. In our competitive economy, consumers should be able to test out products before they commit to them, and savvy businesses recognize this. When you're out shopping for anything -- whether it's clothes, home accessories or bigger-ticket items like furniture or cars -- live with the idea for a while before you whip out your checkbook. For instance, browse the clothing store for a while with that item in hand, and give yourself some time to consider whether this is an impulse buy or an item you would wear on a regular basis. When it comes to major purchases and financial commitments, always sleep on it. Any salesperson who pressures you to sign on the bottom line and do it quickly should only reinforce your convictions.

And if and when you do prepare to make a large purchase -- whether it's a pricier "need" or a "want" to which you decided to treat yourself -- consider first that the item is likely to lose its initial appeal within a relatively short period of time. That's not always the case; when you make wise purchases, you often appreciate them each time you set eyes on them. But that expensive car, house, clothing item or even a pricey bottle of wine often won't seem quite as spectacular in the morning once the "honeymoon period" has worn off, the second glass has been consumed or the bill has arrived with interest. Looking into your crystal ball and considering this scenario may prevent you from making a financial commitment you'll soon regret.

You'll also want to consider whether the item you're about to buy requires an ongoing commitment from your bank account. A foreign vehicle, for instance, often requires more expensive repairs than a domestic one. A home requires outside and inside maintenance work. That "dry-clean only" sweater requires trips to the cleaners and a financial commitment beyond the price on the tag.

None of these suggestions are meant to burst your bubble. One of the great pleasures of life is treating yourself to necessities and even little extras that you've been admiring but couldn't afford immediately. However, you can lay the groundwork for a secure financial future by not making every purchase a "treat" -- by learning to distinguish between needs and wants, by scaling down in some areas to leave room for your priorities, whatever those might be.

Published: January 27, 2000

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