(Article from Consumer Reports MoneyAdviser Newsletter, May 2004)

You can reduce expenses for utilities, phone, cable and more

"Replace your drafty old windows and cut your energy bills!"

Don't you feel like screaming when you hear one of those shrill radio or TV ads that neglect to mention that you'll have to spend thousands of dollars just to save a few bucks every month?

The real trick is trimming your pesky monthly bills for energy, telephones, commuting, and other essential services without spending one cent more than you already do. Below you'll find plenty of money-saving ideas that you need not spend a nickel to execute, plus three money-saving tips that require only a minimum investment. One caveat: Not every suggestion will work for every person all the time.

TELEPHONES

1. Shop for a cheaper calling plan . This applies to landlines and wireless phones. Review your bills for the past three months to figure out where and when you make calls and the average length of your conversations. If you'd rather go to the dentist than shop for phone services, ease the trauma by using an online interactive plan selector at www.telebright.com.

2. Consider buying bundled services . Going with one telecom company makes sense if you make lots of local and long distance calls from your landline and you want certain extras. The average household spends about $12 a month on long-distance service and $36 a month on local service. AT&T, for example, offers unlimited local and long distance calls, plus options like caller ID, for $55 a month before taxes and surcharges.

3. Drop long-distance service . If you spend less than $10 a month on long distance, why pay monthly fees, taxes, and surcharges? Use prepaid calling cards instead. BJ's cards cost about 3 cents a minute. For other choices try www.phonecards-prepaid.com, which lists details for dozens of cards.

4. Drop cell-phone service when your contract expires . When you got a cell phone, you swore you'd use it only for emergencies. Now you routinely whip it out in the supermarket to ask your 6-year-old if he wants smooth or chunky peanut butter. Live without always being a ring away from family and friends, and if you're a frequent caller, you'll save $60 to $100 per month.

5. Deploy your cell phone strategically . If your cell phone has long distance and there are hundreds of free evening and weekend minutes in your plan, make calls to long-distance friends on your cell instead of your landline.

6. Keep your wireless connection, but make it prepaid . Prepaid wireless calling cards can put a lid on your (or your teenager's) cell usage.

7. Use a different telecom company for certain calls . If your long-distance service, for example, charges high international rates, consider using a dial-around company for overseas calls. You simply dial the company's code before pecking out the phone number you're trying to reach, and you call will be routed through another telecom company. You can find rates as low as 8 cents per minute to England by comparison shopping on the Web. But be sure to check extra fees like connection charges and per-call minimum minutes that can add up to a bad deal.

8. Cancel nonessential options . Sure, caller ID is a useful way to avoid your chatty sister-in-law, but it's less necessary if you have voice mail. You'll save $50 or more a year for each option you drop.

9. Avoid directory assistance . You'll spend as much as $1.25 for a robotic Ernestine to fetch a number for you. Either flip through your print phone book or use a free Internet search service, such as www.infospace.com.

ENTERTAINMENT

10. Ditch premium cable channels and pay-per-view . Pretend that your clan is a Nielsen family for a week and track which programs you watch. You may discover that you aren't watching premium channels enough to justify paying up to $75 a month or more. Instead, go for basic cable, which typically costs less than $20 a month, and rent movies.

11. Revert to an old-fashioned Internet connection . Why pay $35 to $50 a month for high-speed broadband Internet service if you rarely surf the Web or download large files or music? Consider a no-frills dial-up plan from BlueLight, Juno or NetZero for $9.95 a month. All are available from United Online (ww.unitedonline.net). Make sure your access number is local. Otherwise you'll blow your savings on long-distance phone calls.

12. Use the library . Instead of renting videos and DVDs at the local video store, get what you can at the local library. If you can delay gratification until the DVDs for, say, "The Sopranos" appear, you'll have another reason to cut those premium channels.

COMMUTING

13. Work at home one day a week . It costs money to run a car -- according to the IRS, some 37.5 cents a mile, the deduction allowed for vehicles used for business. If your commute is 20 miles each way, you save $15 a day every time you work at home. That's $750 a year.

14. Shop online for gas . Before you fill up the tank, check prices at www.gasbuddy.com for the lowest price in your area. At press time the per-gallon price in Bakersfield, Calif., ranged from $1,95 to $2.19.

CREDIT CARDS

15. Cut up cards with annual fees . It's easy to search for no-fee replacements at www.bankrate.com or www.cardweb.com. Before you both, however, call your card issuer and threaten to take your business elsewhere unless it waives your annual fee. It may comply.

16. Ask for a rate cut . If your payment history is solid and you carry a balance, a credit issuer may grant you a lower rate to keep your business. If your rate falls from 18 to 12 percent a year and you pay off a $5,000 balance in 11 months, you'll save $156 in interest.

17. Make credit-card payments of at least twice the minimum . If you pay the minimum on a $3,000 balance - say, 2.5 percent annually -- with a 15 percent interest rate, you'll pay $2,758 in interest and take 18 years to get debt-free. Double the payment, and you cut your interest charges by $1,800 and repayment time by 10 years.

UTILITIES

18. Set your water-heater at 120 degrees Fahrenheit . That's warm enough for comfort. You can cut 3 to 5 percent of your energy use with each 10-degree reduction in temperature.

19. Take quick showers instead of baths . You use 15 to 25 gallons of hot water for a bath vs. less than 10 gallons during a 5-minute shower.

20. Save on cooling and heating while you're asleep or away . When the weather is cool, set your thermostat below 68 degrees overnight or while you're at work. You'll save as much as 1 percent for each degree that you turn your thermostat down if the setback period is at least eight hours. You can save on air-conditioning costs by cranking your thermostat up to 85 degrees when you're not home.

Spend a little, save a lot 

Install a programmable thermostat. You may forget to turn your thermostat up or down, but these devices, which cost $30 to $100, won't. More important, you won't have to wake up in a freezing-cold house on winter mornings. For tips on choosing a programmable thermostat, read the U.S. Department of Energy's fact sheet at www.eere.energy.gov.

Replace old showerheads . Buy new, low-flow models. All showerheads sold today must meet a federal efficiency standard that limits water flow to no more than 2.5 gallons of water per minute. Old showerheads, by contract, use 4 to 5 gallons per minute. The payoff: You'll use 30 percent less hot water for showering.

Put a timer on your electric water heater. Set it to turn off automatically at night and back on in the morning. You'll save the $30 cost of the device in electric bills within about a year.