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.

It’s official! Our government has approved tax rebates that we can expect to start seeing around late May to early June. Those who are single, with no children, can expect around $600.00 and married couples with children can expect about $1,200.00 plus an additional $300.00 per child. Credit counseling agencies are urging their clients to spend their money wisely.

Here are some suggestions to stimulate the economy if you decide to use this extra money as it is intended:

• Are you currently spending money every day on expensive coffee? Investing in a gourmet coffee maker should save you in the long run if you use it instead of purchasing a $3.00 cup of coffee from Starbucks or Caribou everyday.
• If you go out to the movies frequently, invest in a home theater system and watch movies at home instead of going to the movie theater.
• Home improvements are another good investment and could help to lower your utility bills if you purchase new windows or insulation.
• With gasoline prices at an all-time high, perhaps getting some vehicle maintenance done will improve your car’s performance, which should improve gas mileage.

Credit counselors also suggest saving your money or reducing debt as an option.

• Always pay off credit cards with high interest rates first. The idea is to pay down debt that could increase due to fees and high finance charges.
• Deposit the money for an emergency fund. Credit counselors suggest having at least 3 months worth of saved income set aside for emergencies.
• Start a college fund. This is an opportune time to start a college fund, especially since you may be receiving an additional $300.00 per child.
• Have you started saving for retirement? If not, this is a perfect time to start, especially if your employer offers something like a 401(k) plan that matches a part of your contribution.

Opportunities like this are not likely to be offered again so we should make sure we make the most of this one-time payment from the government. Credit counselors warn that there are scams already out there. As always, be careful anytime someone asks for personal information like bank account info or your social security number as the IRS has announced that they will not be contacting you for this information through email or telephone. If you receive a questionable e-mail, do not open it! Be sure to forward any questionable e-mails to phishing@irs.gov.

If you have joined the over 40 million Americans (according to Forrester Research) who have joined the 21st Century and ventured into the world of online banking, congratulations! For those of you who haven’t – let’s talk…

Traditional “brick and mortars” with high overhead costs can’t compete with a virtual bank when it comes to interest rates. If you’re shopping, you’ll be lucky to find an interest rate for a savings account at a traditional financial institution collecting even 1% annually. Compare this to the 4% - 5% interest from virtual savings accounts and you’ll see the significant difference. A balance of just $5000 could mean an extra $250 per year in interest.

You’re thinking, “There must be lots of restrictions and high minimum balances requirements,” right? Wrong. In many cases you have the same access to your funds as with traditional accounts with the same minimum balances.

Bottom Line: As with any opportunity, it won’t be for everyone. If you’re not internet savvy, if you haven’t dug your way out of debt to even begin your emergency fund savings, or if you’re lack of close relationships encourages you to know your bank teller by name, then internet savings might not be for you. Review your options with your current financial institution and make an informed decision based on what’s right for your individual financial goals.

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!

Beginning February 18, 2009, analog television signals used by rooftop antennas and rabbit ears will be shut off.  An estimated 20 million Americans continue to receive their television fix through these means and will need to make plans to invest in alternatives or prepare for life without Ryan Seacrest, Oprah and all of the Desperate Housewives.

Here are the solutions:  Invest in a new Digital TV or DVD recorder, subscribe to cable or satellite service, or purchase an analog-to-digital converter.

As a credit counselor, I’ve advised many clients to forego the luxury (that’s right, I said luxury!) of cable television in order to prioritize other financial goals like paying off debt, purchasing a home or simply making ends meet with a monthly household budget.  If that’s you and you feel you just can’t live without your TV “fix,” don’t miss out on the estimated $1.5 billion dollars our government has set aside to subsidize the purchase of these converter boxes.

Bottom Line:  Watch for subsidized coupon announcements available beginning January 1, 2008, and don’t wait to request up to two per household if your sets require one.  Subsidized funds may dry up and there will be no income qualifications to request these coupons, so I’m confident we’ll see people taking advantage of the system and selling these coupons on EBay.  The price of these converters hasn’t been set yet but is expected to sell for $50 - $70 each.  If you’re on a fixed income or a tight budget, you won’t want to miss out on $40 worth of savings.

Have you seen the odd looking, spiral-shaped light bulbs known as CFLs (compact flourescent light bulbs)? According to the U.S. Environmental Protection Agency, they use up to 75% less energy and last up to 10 times longer than standard light bulbs.

What does that mean for us?
A six-pack of CFLs will save you about $200 over their lifetime on both energy and new light bulbs. According to Energystar.com, you could see a savings of about $30 per bulb.

What does that mean for the planet?
Jean Chatzky of Money Magazine writes “each bulb will keep a half-ton of carbon dioxide out of the air”. According to the U.S. Department of Energy, if every American home replaced just one standard bulb with a CFL, we could prevent greenhouse gases equivalent to the emissions of more than 800,000 cars.