Money Saving Tips
hand and hand with smart purchasing is saving money on those things that you truly need. To start saving, take
an inventory of your current needs to see where you can begin to shave the dollars. Start with the biggest items
first, where the most potential for savings is, and move down the scale to the less expensive items. Even a moderate
savings on one of the larger items (houses and cars, for example) can bring a big reward. You can maximize your
effectiveness by starting to save on some of the smaller items--they will add up! The following are some thought
If you own a home, your mortgage is probably your biggest expense. Is it at the most advantageous rate? Surprisingly,
many families don't know the answer to this question, or if they are aware of current mortgage rates, think it's
too much of a hassle to do anything about. If you purchased your home with a mortgage for, say, 6.75% interest
while 4.25% is currently available in the market, you may be paying an expensive price for not investigating your
options. Example: the difference in payments between a $100,000
mortgage at 6.75% and at 4.25% amounts to $156.66 per month, or $1879 per year. Even if you plan to stay in the home for only 8 more years, the savings (less any closing
costs) amount to over $15,300. Can you say "a good start toward college education costs?" Comparison
is important here, though, as there will usually be variances in rates from lender to lender. Quicken Loans
has an excellent program where you can submit one easy and quick loan request form and get up to 4 offers from
competing lenders. For more information, click here. If you
have questions about refinancing, our Home
Owner's Information Center has a good discussion
on this topic.
Home Repairs, Improvements and Remodeling.
Normal maintenance on a home is expensive enough. When you need to make repairs, improvements or remodel, the cost
can go through the roof! Getting comparisons is the key here--getting and accepting only a single offer can be
very expensive. And, without other bids with which to compare it to, you won't even know your loss! If you need
work done to your home, Service Magic
has an excellent (and totally free) resource that will secure up to 4 competing bids from pre-screened contractors
in your area.
Cars. For most families,
the next biggest expense is their car(s). Mistakes made here can often be as costly (on a monthly basis) as mortgage
miscues. Take a look at the vehicle(s) you presently own. Do you own too much vehicle for your needs? Do you have
equity in a car that you no longer use frequently? Could you downsize and save money, not only in monthly payments
but also in maintenance, insurance and operating expenses? On the cars that you own and will be keeping for a while,
are you getting the best deal on those repairs and maintenance? The habit of always using the same facility without
investigating alternatives and looking for special savings plans can be an expensive one. Would an extended warranty
save you money on your repair bills. For some it might be a wise move, for others there would not be considerable
savings. Get a quote from a source such as Warranty Direct,
where you can save money on the purchase of a warranty.
If you are looking to buy a new or used car, check out our sister sites CarClicks.com
and ACarOnlne.com, which are complete (and free) guides to buying vehicles, either
directly or online.
Aside from your home and perhaps your automobiles, it is fairly likely that health care will be one of your most
expensive outlays--and the amount keeps going up year after year. Health care will be a big consideration no matter
what your age or work status, whether you are covered by an employer's plan or on your own, or if you have no insurance
at all. You will need a good resource to help you negotiate the mine field that is health care in the U.S. in the
early 21st century. An exceptional resource that we have found is Health Care on Less Than You Think by an author, Fred Brock, that we have a great deal of respect for from reading his previous
books. Drawing on the experiences of regular Americans and his practical, dollars-driven analysis, he shows how
- choose among the health plans and minimize costs based
- shop for coverage when your job does not provide insurance
- assess whether health savings accounts help your budget
- track down the biggest savings on prescription drug costs
- master your insurer's fine print and win battles over
- manage Medicare and long-term-care insurance to protect
your retirement savings
Worksheets and a handy resource list give you the tools
to manage your health and your budget. Health Care on Less Than You Think
is available at a discounted price at Amazon.com.
Banking and Financial.
This is one area that many of us simply "pay the tariff"--whether it is in high monthly fees or lower
interest rates--simply due to habit. Could you be earning interest on your accounts instead of simply paying monthly
fees? Online sources often have some of the highest interest rates
available. If you are looking to save money, then consider
ING Direct, where you can get great rates with NO fees and NO minimums. More information.
For many families, one of the biggest financial drains is credit card debt. Taking control of the problem involves
two steps: First, you must stop spending foolishly and second, you must dump all of your high interest credit cards.
Paying a large portion of your monthly payment only to interest is not only expensive, but makes it next to impossible
to pay down the balance. You can find more
hints on credit cards on the page devoted to
Most of us pay our automobile and homeowners insurance premiums by habit, rarely if ever making comparisons. With
many families insurance costs totaling over $2000 a year, even a 15% savings equates to $300 annually. Some hints
from the Insurance Information Institute on saving money on your homeowners
- Be sure to shop around. It may take a little time, but it could save you money. The insurer you select should
offer both a fair price and excellent service.
- Raise your deductible. Deductibles on homeowners policies typically start at $250. By increasing your deductible
to $500, you could save up to 12%.
- Beef up your home security. You can usually get discounts of at least 5% for a smoke detector, burglar
alarm or dead-bolt locks.
insurance the Insurance Information Institute recommendations
- Shop around. Prices for the same coverage can vary by hundreds of dollars from company
to company, so it pays to shop around. Surf the net, ask your friends or call your state insurance department for
ideas about companies and agents to contact.
- Ask for Higher Deductibles. By requesting higher deductibles on collision and comprehensive (fire and
theft) coverage, you can lower your costs substantially. For example, increasing your deductible from $200 to $500
could reduce your collision and comprehensive cost by 15% to 30%.
- Take Advantage of Low Mileage Discounts. Some companies offer discounts to motorists who drive fewer than
a predetermined number of miles a year.
With one simple application, InsureMe will get you insurance quotes from
top-notch insurance companies.
Food. Not only do you need
to eat food to live, the expense of it for the average family can eat you alive! Since food is a necessary and
recurring expense, just saving, for example, $20 a week on your purchases can convert to over $1000 in savings
over the course of a year.
- Try to plan in advance. By knowing what you need, you will be able to buy in larger quantities (almost always
less expensive) and cut down on convenience food purchases (always more expensive). Once you get into the habit,
you can plan 2 weeks of meals including making your shopping list (see the next 2 hints) in less than a half-hour.
- If you use national brands, spend a little time clipping and using coupons. $1.50 invested in the Sunday
newspaper could save you $20 or more at the checkout--and that is before frequent doubling or tripling offers from
the stores. Organize the coupons by type, so as you develop a shopping list you can make a notation if you have
- Consider store brands or generics. You may find the quality is equal to (and sometimes better than) the national
brands, and store brands/generics are generally considerably less expensive.
- When it is on sale, stock up. Of course this only applies to those items that you use on a regular basis.
Stocking up on an item which you use once a year doesn't make sense (and robs you of spending money, not to mention
- Shop at the store that is the cheapest overall. Surveys have shown that there is sometimes as much as 10-15% difference
on identical grocery orders at 2 different stores in the same area. If you spend $500 a month on groceries, that
can equate to $600 to $900 a year in savings. Don't throw away your money just because it is your habit to shop
at a certain store.
- Eat out less, eat in more.
The savings you can put in your pocket here can be extraordinary. Instead of eating out 6 times per month, as an
example (at a cost of $50 per meal) cut it back to 3 times monthly. Your savings (before you add even a penny of
interest): $1800 per year!
- If you do eat out, make use of coupons. You will often find restaurant coupons in mailers you receive, in your local newspaper
or with resources such as Entertainment
Books, which we use frequently and save hundreds of dollars over
the course of a year. More
Telephone. In most areas of the country,
your local phone service is currently regulated and has a fixed price. The difference in long-distance costs, though,
can be eye-opening. Many consumers simply stick with their current long-distance carrier because it is convenient
and they feel that it would be a hassle to change. By shopping around, however, you may find some considerable
savings that can really add up. We were able to find a plan that gives savings of about $16.75 a month and $200
a year, a fairly considerable amount. Switching over was simple and not time consuming--a pretty good return on
Clothing. Although many
consumer items have actually reduced in price over the last few years (most notably, computer and electronic items)
the cost of clothing has seen a continuing upward spiral. In addition, a purchase price that not too long ago bought
a good quality garment now seems to buy virtually "throw away" clothing. With some planning, though,
it is possible to maintain clothing purchases that are in line with your family budget.
- Buy separates that coordinate. You can make numerous combinations with a few well matched items. For women,
jackets, slacks, skirts and blouses can be mixed and matched to create many different outfits. Plus you can change
the look of these outfits with accessories such as jewelry or scarves. Men's clothing offers a wide variety of
separates that can be coordinated: blazers, slacks, shirts and ties can all be interchanged to create a versatile
wardrobe with a minimum of expense.
- Buy a season ahead. Buy next year's winter clothes at the end of this season and save. The styles won't change
that much (if at all) and you will pocket a big difference in the price.
- If you are "hard" on clothes, buy quality. Buying an $80 pair of shoes that will last saves money in the
long run instead of having to buy 3 pairs of $35 shoes that don't hold up.
- Stay away from trendy fashions.
Stick with the basics. You can always be sure you clothing styles will last from year to year when you buy perennial
stand-bys such as medium length A-line skirts and solid tailored blazers for women or neutral color shirts and
tailored to semi-tailored sports coats for men.
Travel. Price differences here can be enormous. The difference in costs
on the same trip--same airline, same hotel, same car rental--between two travelers can run into the thousands of
dollars. Take a little time to comparison shop to assure the best possible deal. Some travel resources that we've
found effective include Expedia,
Once you have booked your trip, don't make the mistake of not providing a safety valve should health or other issues
intrude. Investigate whether travel
insurance would make sense. Travel Guard is
a resource that we have used in the past and felt confident in.
Compare. It used to be that comparison shopping was a long and drawn out
process. Driving from one store to another or making numerous phone calls could be a real time waster. Even if
you were able to make an adequate comparison, sometimes it wasn't worth the hours you needed to invest to get the
comparison. The Internet has changed much of that. Now you can make quick comparisons on most items, usually within
a matter of minutes. What would once have taken hours to accomplish now happens at the click of a mouse, a real
time and money saver. Don't forget online resources. For example, a site such as Ebay could save a lot of money for a couple of reasons: First, you can
make comparisons among a number of sellers and second, you may be able to find second-hand merchandise which can
save you a bundle.
Want more tips
on saving money? A good source is The
Guide to Saving Money : 325 Valuable Tips That Will Help You Stretch Your Dollars
which presents and explains hundreds of money saving ideas. It's
available for less than $10.00 at Amazon.com, so your first smart purchase saves you the cost of the book!
Back to top