Creative Ways to Save Money

By Jean Chatzky, with Arielle McGowen

In recent years, the average family of four has spent over $5,300 on food, nearly $3,000 on gifts, $2,100 on clothing and $3,000 on recreation. That's all well and good when you're spending money that you have, but what about if you're watching your pennies because of a layoff or a plummeting 401(k) balance?

In this economy, both are all too common. So it's time to get creative. Yes, there are certain expenses in the family budget that are fixed—your rent or mortgage, utilities, car payment, gas to get you back and forth to work and groceries to put food on the table. I'd put childcare and health insurance on that list as well. But most other things are variable expenses: You get to decide where to cut back.

One way people are doing that is by not buying the things they wan—books, DVDs, toys—and instead, trading, renting, borrowing or even taking someone else's unwanted belongings. These days, the Internet has made it easier than ever to find the stuff you're looking for—for free or at the very least, cheap. 

Here are a few of my favorite ways to save...

We all have books gathering dust on our shelves or movies that we bought and know we'll never watch again. So next time you spot a book or DVD you'd like to buy, why not save your money and make a trade instead? There are a handful of sites that let you do this online, with Book Mooch (www.bookmooch.com) and Swaptree (www.swaptree.com) among the most popular. How much can you save? According to one of Swaptree's founders, Mark Hexamer, the site's users get about $30,000 worth of free media every day by trading up—that's almost a quarter million a week. With most sites, you cover the cost of shipping, but the media mail option at the post office means you're only looking at a couple bucks.

A similar concept that caught my eye as a mom is Zwaggle.com. Parents know how fast babies and toddlers outgrow clothes and shoes, and keeping up can put a major dent in your pocket. With this site, you can trade the items your child no longer wears or uses for the things you need—including strollers, high chairs and winter coats. Again, you pay shipping, which Zwaggle spokesperson Caitlin Haedicke says usually averages around $7.

It's not easy to keep up with the latest in fashion under normal conditions, and it gets even tougher when money is tight. But more and more, companies are making it possible to rent the items you want, whether it's for just one big night out or an entire month.

A couple of the biggies: Avelle (www.avelle.com) and From Bags to Riches (www.frombagstoriches.com), which rent designer handbags, and Borrowed Bling (www.borrowedbling.com), which of course focuses on jewelry. Most of these sites have a range of membership options that allow you to rent at a discount, or you can rent as a guest for full price.

Before you sign up, a few things to think about: How often are you going to rent items? Are you renting something that you'll use a lot, in which case, would buying it actually be more economical? Is insurance included if the item is lost or damaged? Sometimes it is, but often it's not. The last thing you need is a big bill when you're trying to cut back.

Believe it or not, it's possible to borrow items online—people you don't know will lend them to you. Through sites like NeighBORROW (www.neighborrow.com) and Lending Circle (www.lendingcircle.com), you can join networks of people in your city, town, neighborhood or even apartment building who are willing to lend items you need but don't want to buy—think expensive tools, a ladder and even air mattresses. In exchange, you'll need to offer up a few things of your own, but both sites say they'll step in to help if anything goes missing. Both of these sites are fairly new, so it can be frustrating if you can't find a group in your area, but if you have the ambition, you can always start one yourself.

Another helpful resource for borrowing tools is, interestingly enough, your local public library. Many are starting to build up tool collections, so definitely check it out before you put up the cash for a new power drill.

As a spin-off of the green movement, sites are popping up all over the Internet to help link people who want to recycle their used items to a new owner. You can find furniture, appliances, toys, coupons and everything in between, and all you pay is the cost of the gas used to go pick up your loot. 

One of the biggest examples, Freecycle (www.freecycle.org), has over 4,000 local groups. Members post items they want to give away, and you can reply if you see something you want. Because of this network's popularity, I had a little trouble getting anything I e-mailed for—time is of the essence—but there are a number of smaller alternatives that work in much the same way: Freesharing (www.freesharing.org), Sharing Is Giving (www.sharingisgiving.org) and FreeUse (www.freeuse.org) are worth a look.

A couple of notes on all of these: If you're asked to pay a fee—even in the form of exorbitant shipping—for something that is supposed to be free, it's likely a scam. Also, in this era of identity theft, it's really important that you not give away any personal financial information that shouldn't be needed in a transaction like this, including your social security number.

Because of the economy, new sites like the ones I've mentioned are popping up all the time, so always read the fine print and check to be sure the site lists contact information—a working e-mail address, phone number or both—so you can get in touch with a real person with questions.

Find out how you can save $5,000 in one year.