Healthy Finances: Recession-Proof Your Life

The headlines look ominous: skyrocketing gas prices, faltering job stability, hikes in food costs. But don't panic! "Recessions can be a good thing," says Anya Kamenetz, author of Generation Debt. "They can force us to break bad habits-overusing credit, buying houses with little money down and spending frivolously." You don't have to ditch vacation plans or sacrifice your favorite splurges to tighten the purse strings. Keep your finances in check with these four tips.

Draft a Budget

"Tracking monthly spending keeps hard-earned dollars from dribbling away on junk and helps you get what you really want," says Liz Pulliam Weston, author of Easy Money. When you see exactly where your money goes, you can instantly spot where to cut back.

For example, maybe you spend $5 on two lattes every workday. When that appears as $100 on your monthly budget, you may decide you'd rather put that money toward a spiffy mountain bike or new pair of shoes. Even if you decide that the caffeine kick is worth the cash, at least you're making a conscious decision.

In a notebook, jot down everything you buy for a few days. At month's end, scribble down what you spent for: housing/utilities, transportation, debt payment, extras (nonessentials such as concerts, movies, restaurants) and savings. Look for money spills you can avoid, says Weston, where you overspent on things you didn't need.

Once you see where your money is going, determine if your spending is in line with your financial goal. If not, set a specific cap on extras spending and decide how much you can realistically save each month. Adjust your day-to-day spending (tote bagged lunches to work instead of eating out or brew your own coffee) to limit how much you shell out for extras and increase how much you sock away. Your reward? With the money saved you can buy that overnight spa trip-or achieve your financial goal-with guilt-free cash.

All this calculating may sound like a chore but it's not. With free online calculators, drafting a budget is a cinch, taking just five minutes. Try Kiplinger's or WaMu's Budget Calculator.

Shop Online, Save Online

The key to nabbing bargains online is combining as many discounts as possible, what's called stacking, says Brad Wilson, founder of Bradsdeals.com, a website listing shopping deals. Find coupons and codes by going to Wilson's site or to Google and typing "store name; coupon" in the search field.

A little digging can pay off big-time. For example, find a $100 dress on sale for $75. Add a 20 percent coupon code (that you enter at online checkout), a $20 rebate and free shipping. You pay just $40 for the mailed-to-your-door outfit.

Slash Monthly Bills

With a few calls and a little research, chopping your routine expenses is easy.

• At the gym: Consider swapping your pricey gym membership for a lower-cost one, such as the local YMCA. Save more by lacing up your running or walking shoes or dusting off your bike and burning calories outdoors. Afraid you'll miss the group-class camaraderie? Recruit a walking buddy, join a local cycling or running club, or do workout DVDs at home.

• Your cell phone: "If your contract is up, think twice when offered a free phone upgrade that's attached to a two-year plan," says Kamenetz. "It may be cheaper to switch to a different plan or a prepaid phone." You can further shrink your monthly bill by giving up text messaging, three-way calling and/or insurance for a few months and when you need info in a flash, dial no-cost directory assistance (1-800-free411).

• Cable: Paying for the full menu of movie channels? Push monthly expenses lower by changing to basic cable or cutting it entirely for summer. Kamenetz's tip: Watch TV and movies gratis at Hulu.com.

At the gym: Consider swapping your pricey gym membership for a lower-cost one, such as the local YMCA. Save more by lacing up your running or walking shoes or dusting off your bike and burning calories outdoors. Afraid you'll miss the group-class camaraderie? Recruit a walking buddy, join a local cycling or running club, or do workout DVDs at home.

Your cell phone: "If your contract is up, think twice when offered a free phone upgrade that's attached to a two-year plan," says Kamenetz. "It may be cheaper to switch to a different plan or a prepaid phone." You can further shrink your monthly bill by giving up text messaging, three-way calling and/or insurance for a few months and when you need info in a flash, dial no-cost directory assistance (1-800-free411).

Cable: Paying for the full menu of movie channels? Push monthly expenses lower by changing to basic cable or cutting it entirely for summer. Kamenetz's tip: Watch TV and movies gratis at Hulu.com.

Slice & Dice Food Costs

Food takes up a whopping 12.8 percent of a monthly budget compared to 4.5 for fuel, says Weston. But reducing costs here is easy.

For starters, scout bring-your-own-beverage spots when eating out to limit spending on alcohol ($10 Australian wines aren't menu mainstays). And you don't need to dine in restaurants to keep it social. Host a potluck or evening picnic at the park, says Weston, or take a friendly stroll through the farmer's market for cheaper, fresher in-season produce.

Save at the grocery store by banning pre-packaged foods from your shopping list. Stick to raw ingredients and pick up the bag of rice over the microwave-ready rice bowl. Tip: At grocerygame.com pay $1 to have up-to-date deals from your local grocery sent to your in-box for four weeks.