As you are likely aware, household costs have increased tremendously since last year. Gas is up 21%, food 5%, and home energy 9%. Credit counseling agencies have been giving their clients some tips for saving on those daily living expenses.

Make a shopping list. Researchers find that making a shopping list and sticking to it will help limit impulse buying. Also, never shop while hungry or tired or you may fall to temptation. Your grocery store should have a list of goods that will be going on sale in the upcoming week. You can also subscribe to thegrocerygame.com, which will reveal sales that aren’t advertised yet. Stock up on the best deals!

Check for air leaks in your home. Use caulk, weather stripping and spray foam to seal leaks in areas like around windows and doors. Adding insulation can also save on your heating and cooling bills. Increase your heating and air conditioning unit’s efficiency by changing air filters every three months. Credit Counselors advise to save on electricity by changing your light bulbs over to fluorescent compacts as they burn out. Some appliances use electricity when you aren’t using them. Devices with standby power like TVs, stereos and DVD players should be plugged into a power strip so you can turn them off all at once.

Make sure you aren’t spending on needless costs. If you have a credit card and have always paid on time but it has a high interest rate, try getting it lowered because you have been a good customer. You can try a similar approach with your insurance company but instead, shop around and see if you can get a lower premium. If you don’t use all of your cell phone minutes, change your cell plan.

If you need budget help, most non-profit Credit Counselors would be happy to assist you at no charge.

Gas prices are high and consumers are feeling the pinch at the pump. With gas prices nearing $4.00 per gallon, credit counselors are urging you to save gas whenever possible.

You can try the following methods to maximize a tank of gas:

• Consolidate your errands and do whatever possible to limit your daily driving.
• Avoid aggressive driving. Rapid acceleration, speeding and hard braking wastes gas. It can lower your gas mileage by 33 percent at highway speeds and by 5 percent around town.
• Don’t drive over the speed limit. According to experts, you can assume that each five miles per hour (mph) you drive over 60 mph is like paying an additional twenty cents a gallon for gas.
• In households where more than one vehicle is available, when possible make sure you choose the car that gets better gas mileage.
• Limit you car’s idle running time.
• Don’t use premium gas unless your car manufacturer requires it.
• You should also take a look in your trunk. Carting a lot of unneeded items around can cost you. An extra hundred pounds in your vehicle could reduce your mpg by two percent, depending on the size of your vehicle.
• Keep your vehicle maintained. Your car’s spark plugs, air filter, fuel injectors, tires and brakes can reduce gas mileage if they are not properly maintained.

Not only will some of these steps increase your gas mileage, but also they will help to make the roads a safer place.

Credit counselors warn not to charge your gas if you cannot pay off your card every month. This might seem like a temporary solution, but paying interest on already high gas prices is costly.

When it comes to budgeting, credit counselors often advise to plan ahead.

There are many costs that are not necessarily considered monthly expenses that you may be forgetting to include in your monthly budget such as car maintenance (including city and plate license), car insurance, school clothes, school supplies, insurance premiums and taxes. These costs might only come up one to four times yearly. These may be large one-time expenses that may not be included in your balanced budget, which is why it is important to start saving now. To budget for such accounts, take the total estimated cost per year, divide it by 12 and set aside that amount monthly so you are ready or in a better financial position to pay them when they are due.

Then there are unexpected costs that may come up immediately such as car repairs, medical bills, and home repairs. These are more difficult to estimate, but equally important. In the event these saved funds are not needed, you can apply this to a high interest credit card.

If your budget allows, it is a good idea that you prepare for unexpected costs and loss of income. Credit counselors advise that you have three to six months of income set aside in an emergency fund.

If you have had trouble saving up for an emergency fund, you may want to consider putting away this year’s tax return. In addition, don’t forget about that extra stimulus refund you may be receiving later this year. It might be tempting to spend that extra money right away, but you may want to consider saving it. Credit counselors advise that the absence of an emergency fund can be a critical financial error and you will be thankful it is there if it is needed.

It’s a new year once again! Every January you get a fresh start. This is the time of year to put yourself to the test. So what is your New Year’s resolution this year? Whether you want to lose 15 pounds or to stop smoking, have you considered it might be so hard to stick to your resolution because of holiday debt? Are those holiday credit card bills pouring in on a daily basis tempting you to maybe light up a cigarette or eat a half gallon of ice cream resulting in another failed New Year’s resolution? Maybe your New Year’s resolution should be to avoid accumulating holiday credit card debt again this year.

Don’t let those holiday bills get out of control!

All of that holiday debt will not go away if you avoid opening your credit card statements. If anything, you should get ahead of the game by checking your bank and credit card accounts online before your bills even come. Don’t ignore your bills! You could incur late fees, which may cost you up to $40.00 and your interest rates could increase up to 30% annually. Avoid this by making sure you at least pay the minimum amount on each card and mail it out the same day it arrives if possible. Furthermore, be aware that your credit card companies watch how you pay your other credit cards. If your card company sees you are late paying on another credit card, they could increase your interest rate, so paying at least the minimum on all your accounts is paramount.

Stop using your credit cards!

By using cash, debit and checks (provided your checkbook is balanced), you won’t be adding to the problem of accumulating additional debt. If you can’t resist using plastic, try putting your cards in a lockbox. If that doesn’t work, a more creative approach is to freeze those cards in a block of ice so you can’t get to them, the thaw time may help control impulse buying.

Set a goal.

You need to set a realistic timeframe to eliminate your holiday debt. By paying off your cards with the highest interest rates first, you will pay less towards interest and eliminate that holiday debt faster.

Don’t let this happen again next year!

Start saving now for the next holiday season. Free up some money by cutting out expenses like Starbucks coffee; try watching TV instead of going out to the movies and bring your own lunch to work. You can use this money saved to start a Christmas club account by setting aside $25.00 to $100.00 each month so you don’t burden yourself with holiday debt next year.

Want to know why most household budgets fail? Because most Americans approach budgeting the same way the approach dieting: Cut out everything I enjoy to accomplish my goal (losing weight or financial freedom.)

What’s the problem with going on a diet in which I say I’m never going to eat chocolate again? That will probably last about three days (provided those are three REALLY good days!) and then I will “fall off the wagon” and probably eat more chocolate afterwards than I would have eaten on all the days of my diet combined. This is why more people gain weight when dieting and also why people get further into debt when budgeting.

Financial goals and spending habits require a commitment to lifestyle change just the same way as proper eating and exercise deal with issues of weight loss. Don’t expect to create a budget and cut out every thing you enjoy. No one can survive life without a little bit of enjoyment! Try to find creative ways to either reduce the frequency of spending or what you’re purchasing without cutting out your motivations for getting out of debt and setting healthy financial goals.

Bottom Line: Don’t sabotage your budget by starting out unrealistically. Take the time to create an initial budget, then spend some additional time (usually 30 days) monitoring some fluctuating budget categories like fuel, groceries and entertainment expenses to get a realistic idea of your spending habits. Then be creative in finding ways you can reduce expenses to meet some of your long term financial goals like retirement, purchasing a home or taking a vacation!