How to Save Money in 2010

My parents paid off the mortgage on a nice home in the suburbs and sent three kids to university on a factory worker's income. This is how they did it:

• Determine a family budget. Add up all sources of income. Add up all expenses (groceries, mortgage/rent payments, utility bills, entertainment expenses, medical/dental expenses, charitable donations, transportation (public transit, car maintenance and insurance, gas), etc. Subtract expenses from income. The money you need to pay for housing, utility and other bills goes in a chequing account. Withdraw only the cash you need for daily expenses (food, spending money, transportation) and deposit the remainder into a savings account.
• Put credit cards away and pay for expenses in cash. Put the grocery money in one envelope, transportation money in another, spending money in a third. Once an envelope is empty--that's it, you don't get more. This will help you learn to economize.
• Do not buy "on time." Having a credit card doesn't mean you have to buy "on credit"--you should pay the entire balance due every month in full.
• Save for what you predict you will need. If you will need a new car in five years, or you would like to go on a vacation later in the year, figure out a savings strategy so you can pay in full when the time comes.
• Keep the equivalent of 3 months mortgage/rent payment plus utilities in a savings account in case of emergency. Ideally, you should have 6 months worth of savings for all expenses in a high-interest savings account.
• Once you have enough money to support your family for six months in a savings account, don't touch that amount, start putting savings into retirement savings plans and then education savings plans for your children.
• Shop with a purpose and buy only what you need.
• Replace "recreational" shopping with other forms of entertainment. Why take the kids to the mall when you can go to the park or the library? Replace "emotional" shopping (buying things to make you feel better) with something that might actually make you feel better than going into debt--visit a friend, clean out a closet, do a favor for someone who is worse off than you.
• In order to have food on the table and money in the bank, think hard about ways to economize. What can you live without? Cut out or cut down on everything that will make you unhealthy first: cigarettes, alcohol, junk food....
• Prepare your own food. My parents never "stopped for coffee" or bought us drinks when we were out. Thirsty? Mom would say, find a water fountain (hard to find today!) or wait until you get home. (Now she uses a refillable water bottle.)
• Support public education in your own community. Send your kids to local schools and government-funded colleges and universities.
• Trade services--I once looked after a toddler in my home and in return, his dad installed my new kitchen.