Saving money by doing good for the planet

NEW YORK (AP) -- Give up worldly goods and help save the Earth. Oh, and save lots of money.

As the economy worsens, one group of Americans is turning to an Earth-friendly way of life as a hardline strategy for saving. The Compact started a few years ago in San Francisco, California, as a group of people who vowed to shun consumer culture for a year in the name of conservation. Now it has over 9,000 members and spinoff groups are sprouting up across the country.

It seems what's good for the Earth is good for the wallet.

"You don't just go out and needlessly shop as a hobby. It's really kind of an eye opener," said Julia Park Tracey, a mother of five in Alameda, California, who swears she isn't a "crunchy granola hippie."

Since joining in January, The Compact has turned a flood light on her family's frivolous spending -- scented lotions, flavored lattes, iPod accessories. Now they no longer dry clean their clothes and even make their own cat food.

"All that was money out the window. We could not keep going like that and make ends meet," said Tracey, whose budget is being stretched thin by escalating food and gas prices.

What makes The Compact compelling for average Americans is that there are no hard-and-fast rules; you won't be ostracized for buying a designer handbag or any other slips in consumerism. Members simply try to conserve the best they can. When necessary, they borrow, barter or buy second hand. Food and hygienic purchases are OK, but the idea is to cut back there, too.

The goals sound a lot like those of a growing population of Americans squeezed by inflation.

Food prices in April took their biggest one-month leap in 18 years and are rising at a rate well above last year's increase. Milk costs 10.2 percent more than it did a year ago.

A gallon of regular unleaded gas, meanwhile, reached an average of $3.81, according to AAA.

The Labor Department said last month consumer prices rose 1.1 percent in June, nearly the fastest pace in a generation.

The conservation movement has moved into the mainstream too, making the principles behind The Compact an easier sell for those looking to save.

"People are coming for all different reasons, with credit card debt or others who say 'my kids are so materialistic and out of control,'" said John Perry, one of the founders of The Compact.

In just the last year, more than 3,000 people have joined The Compact. That doesn't include the two dozen local groups that have sprung up across the country.

Perry didn't start The Compact to save money, but it's one of the lifestyle's intrinsic perks. He saves at least a couple of hundred dollars a month, which leaves more cash for his mortgage, charity and children's savings accounts.

Cutting out dry-cleaning and Starbucks alone is saving Tracey's family $250 a month. Biking and walking conserves not just oil, but piles of gas money.

Also gone are the mindless drug store sprees where Tracey would blow $100 or more on cosmetics and snacks.

"The real surprise is that it's so much easier than you would think," Perry said. "If you hang on, it's like dieting -- the hunger goes away."

Since so much of consumerism is on making upgrades -- faster gadgets, the newest sneakers -- ending such purchases isn't even all that painful, Perry said.

Critics say that the U.S. economy would cave in if enough people radically pulled back on spending. But even in a downturn, the ranks of The Compact likely won't grow large enough to pose any threat to the nation's manufacturers.

A sudden en masse withdrawal from consumerism might shock the economy at first, but industries would likely adjust and perhaps even become more efficient over time, said Brian Bethune, an economist with Global Insight.

Higher fuel prices, for example, are spiking demand for smaller cars and in turn hurting U.S. auto makers, Bethune said. But that means car companies need to adjust their strategies, he said.

"I don't see that as being bad for the economy," he said.

The conservation movement is nowhere close to crippling consumerism, however. Even devoted members of The Compact still buy things like shower curtains or kitchen appliances.

Tracey's children, for example, may not eat out as often as some of their friends, but they still have cell phones and iPods they either got as gifts from their grandparents or bought second hand.

"There are different levels of adherence. It's what makes sense to your economic or personal conditions," said Rachel Kesel, one of the founders of The Compact.

Kesel, a 27-year-old San Francisco resident who describes herself as "anti-capitalist, anti-corporate" is on the more radical end of The Compact's membership. But many members resemble the average American family.

"It's very low level activism. It can fit into a lot of different scenarios," Kesel said.