When a college or university is faced with financial problems, it can either seek more revenue or reduce costs. With the constantly growing costs of education and research and the increasing resistance of legislators and other financial contributors, cost reduction is becoming the necessary alternative. In taking this route, 11 problem areas need to be considered: 1) the "have to spend it" notion on the part of departments and offices; 2) the "game" of unrealistic budget request to assure that real needs are met; 3) adjustment from traditional prosperity to an "economy diet;" 4) retention of effective programs and faculty and staff momentum; 5) attraction of outstanding staff in areas of need; 6) the administrative attitude that "success" is measured in terms of quantity of new faculty added each year; 7) the expensive research and grantsmanship syndrome and its often undesirable side and after effects; 8) the costly acquisition and utilization of computer hardware; 9) excesses and wastes created through personnel surpluses and course proliferation; 10) substitution of an innovative role for the traditional "caretaker" role of the administrator; and 11) acceptance and support for economy programs that many will perceive as threatening. (DS)