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Ouch! That Bites!

You've probably read that food and energy prices rose 4.1% last year, but did you hear about these specific price hikes?

  • Groceries went up 5.6% in 2007.
  • The price of bread jumped 10.5%.
  • Cheese prices climbed 13%.
  • Milk prices leaped 19.3%
  • Gasoline prices surged 29.6%.
  • Synonyms for "increase" soared 95%.

I admit that cheese consumes more of our household budget than is really healthy for my checkbook or my arteries. However, these figures explain why, when I read general statistics about inflation rates, I wonder where these average consumers shop. My food and energy costs seem to be going up a lot more than 4%.

If these price increases have taken a toll on your budget, too, grab a glass of milk and keep reading to find out what you can do to fight back.

Food
In the constant battle between time and money, time often wins when it comes to food. We buy for convenience and eat on the run. If you want to shave your grocery budget, you'll need to find a little time to strategize.

Quick fix:Clip coupons. Shop less frequently to minimize the incidentals (e.g., chips and ice cream) that you buy because you're at the store for some necessity. Experiment with store brands. Buy in bulk from sellers such as Costco (Nasdaq: COST  ) , BJ's Wholesale (NYSE: BJ  ) , or Wal-Mart's (NYSE: WMT  ) Sam's Club. Check out Amazon.com's (Nasdaq: AMZN  ) subscription discount program. Make sure you're buying the best value by ounce or by pound, not just the lowest price. Don't shop on an empty stomach, of course. And always buy fruits and vegetables in season, when they're not only cheapest but also taste best.

Moderate effort:Plan a week's worth of meals before shopping, taking an inventory of what you have and incorporating that into your plan. Add a weekly vegetarian meal to cut costs. Make a shopping list, and don't deviate from it. Buy fewer prepared or frozen meals, keeping only a few on hand for emergencies. Buy household goods (such as detergent and paper goods) elsewhere if they're costly at your grocery store. Pay attention to how much food you throw out, and make changes to minimize your waste. Find a credit card that offers cash-back bonuses for purchases at grocery stores.

Serious attack: Prepare all of your meals yourself. Start a price book to track the costs at stores in your area, even if you only use it for the items you buy regularly (such as milk and bread). Plan for using leftovers in future meals. Drag the bread machine out of the basement, and bake a few loaves yourself. Establish a grocery budget, and shop accordingly.

Gasoline
To cut your gasoline costs, you really have two choices. Either buy cheaper gas, or use less fuel. Doing either, or both, will shave some of your fuel expenses.

Quick fix:Check your tire pressure. Shop around for cheaper gas with help from websites such as GasBuddy.com or fueleconomy.gov. If you're thinking about getting a discount-warehouse membership for groceries, find one that runs discount gas pumps.

Moderate effort: Run errands weekly instead of daily to minimize the number of trips you make to and from your home. Run errands on the way to and from work. Find a credit card that offers a higher cash reward for purchases at gas stations. And, of course, ease off the gas pedal, Speed Racer.

Serious attack: Cut your gasoline consumption buy using public transportation, biking, carpooling, or telecommuting. Check out websites such as eRideShare.com or NuRide.com, which can help you hook up with other commuters. Search online for "ride sharing," and chances are you'll find something in your area.

Keep up the momentum and cut even more of your household expenses by cutting your:


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