66 Ways To Save Money


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66 Ways to Save Money

 

TRANSPORTATION

Airline Fares

1. You can lower the price of a round-trip air fare by as much as
two-thirds by making certain your trip includes a Saturday evening stay over,
and by purchasing the ticket in advance.

2. To make certain you have a cheap fare, even if you use a travel agent,
call all the airlines that fly where you want to go and ask what the lowest
fare to your destination is.

3. Keep an eye out for fare wars. Be prepared to act quickly.

Car Rental

1. Since car rental rates can vary greatly, shop around for the best basic
rates and special offers.

2. Rental car companies offer various insurance and waiver options.
Check with your insurance agent and credit card company in advance to avoid
duplicating any coverage you may already have.

New Cars

1. You can save thousands of dollars over the lifetime of a car by
selecting a model that combines a low purchase price with low financing,
insurance, gasoline, maintenance, and repair costs. Ask your local librarian
for new car guides that contain this information.

2. Having selected a model, you can save hundreds of dollars by
comparison shopping. Call at least five dealers for price quotes and let each
know that you are calling others.

3. Remember there is no "cooling off" period on new car
sales. Once you have signed a contract, you are obligated to buy the car.

Used Cars

1. Before buying any used car:

a. Compare the seller's asking price with the average retail price in a
"bluebook" or other guide to car prices found at many libraries,
banks, and credit unions.

b. Have a mechanic you trust check the car, especially if the car is
sold "as is."

2. Consider purchasing a used car from an individual you know and
trust. They are more likely than other sellers to charge a lower price and
point out any problems with the car.

Auto Leasing

1. Don't decide to lease a car just because the payments are lower than
on a traditional auto loan. The leasing payments may be lower because you
don't own the car at the end of the lease.

2. Leasing a car is very complicated. When shopping, consider the price
of the car (known as the capitalised cost), your trade- in allowance, any
down payment, monthly payments, various fees (excess mileage, excess
"wear and tear," end-of-lease), and the cost of buying the car at
the end of the lease.

Gasoline

1. You can save hundreds of dollars a year by pumping gas yourself and
using the lowest-octane called for in your owner's manual.

2. You can save up to $100 a year on gas by keeping your engine tuned
and your tires inflated to their proper pressure.

Car Repairs

1. Consumers lose billions of dollars each year on unneeded or poorly
done car repairs. The most important step that you can take to save money on
these repairs is to find a skilled, honest mechanic. Before you need repairs,
look for a mechanic who: * is certified and well established; * has done good
work for someone you know; and * communicates well about repair options and
costs.

INSURANCE

Auto Insurance

1. You can save several hundred dollars a year by purchasing auto
insurance from a licensed, low-price insurer. Call your state insurance
department for a publication showing typical prices charged by different
companies. Then call at least four of the lowest-priced, licensed insurers to
learn what they would charge you for the same coverage.

2. Talk to your agent or insurer about raising your deductibles on
collision and comprehensive coverage to at least $500 or, if you have an old
car, dropping these coverage altogether. Taking these steps can save you
hundreds of dollars a year.

3. Make certain that your new policy is in effect before dropping your
old one.

Homeowner Insurance

1. You can save $100 or more a year by purchasing homeowner insurance
from a low-price, licensed insurer. Ask your state insurance department for a
publication showing typical prices charged by different licensed companies.
Then call at least four of the lowest priced insurers to learn what they
would charge you. If such a publication is not available, it is even more important
to call at least four insurers for price quotes.

2. Make certain you purchase enough coverage to replace the house and
its contents.

3. Make certain your new policy is in effect before dropping your old
one.

Life Insurance

1. If you want insurance protection only, buy a term life insurance
policy.

2. If you want to buy a whole life, universal life, or other cash value
policy, plan to hold it for at least 15 years. Cancelling these policies
after only a few years can more than double your life insurance costs.

3. Check your public library for information about the financial
soundness of insurance companies and the prices they charge. The July,
August, and September 1993 issues of Consumer Reports are a valuable source
of information about a number of insurers.

BANKING CREDIT

Checking

1. You can save more than $100 a year in fees by selecting a checking
account with a minimum balance requirement that you can, and do, meet.

2. Banking institutions often will drop or lower checking fees if pay
checks are directly deposited by your employer. Direct deposit offers the
additional advantages of convenience, security, and immediate access to your
money.

Savings and Investment Products

1. Before opening a savings or investment account with a bank or other
financial institution, find out whether the account is insured by the federal
government. An increasing number of products offered by these institutions,
including mutual stock funds and annuities, are not insured.

2. To earn the highest return on savings (annual percentage yield) with
little or no risk, consider certificates of deposit (CDs) and treasury bills
or notes.

3. Once you select a type of savings or investment product, compare
rates offered by different institutions. These rates can vary a lot and, over
time, can significantly affect interest earnings.

Credit Cards

1. You can save as much as several hundred dollars each year in lower
credit card interest charges by paying off your entire bill each month.

2. If you are unable to pay off a large balance, switch to a credit
card with a low annual percentage rate (APR). For a modest fee, Bank card
Holders of America (703-389-5445) and RAM Research Corp. (800-344-7714) will
send you a list of low-rate cards.

3. You can reduce credit card fees, which may add up to more than $100
a year, by getting rid of all but one or two cards, and by avoiding late
payment and over-the-credit limit fees.

Auto Loans

1. If you have significant savings earning a low interest rate, consider
making a large down payment or even paying for the car in cash. This could
save you as much as several thousand dollars in finance charges.

2. You can save as much as hundreds of dollars in finance charges by
shopping for the cheapest loan. Contact several banks, your credit union, and
the auto manufacturer's own finance company.

First Mortgage Loans

1. You may save tens of thousands of dollars in interest charges by
shopping for the shortest-term mortgage you can afford. On a $100,000
fixed-rate loan at 8% annual percentage rate (APR), for example, you will pay
$90,000 less in interest on a 15-year mortgage than on a 30-year mortgage.

2. You can save thousands of dollars in interest charges by shopping
for the lowest-rate mortgage with the fewest points. On a 15-year, $100,000
fixed-rate mortgage, just lowering the APR from 8.5% to 8.0% can save you
more than $5,000 in interest charges. On this mortgage, paying two points
instead of three would save you an additional $1,000.

3. If your local newspaper does not periodically run mortgage rate
surveys, call at least six lenders for information about their rates (APRs),
points, and fees. Then ask an accountant to compute precisely how much each
mortgage option will cost and its tax implications.

4. Be aware that the interest rate on most adjustable rate mortgage
loans (ARMs) can vary a great deal over the lifetime of the mortgage. An
increase of several percentage points might raise payments by hundreds of
dollars per month.

Mortgage Refinancing

1. Consider refinancing your mortgage if you can get a rate that is at
least one percentage point lower than your existing mortgage rate and plan to
keep the new mortgage for several years or more. Ask an accountant to
calculate precisely how much your new mortgage (including up front fees) will
cost and whether, in the long run, it will cost less than your current
mortgage.

Home Equity Loans

1. Be cautious in taking out home equity loans. These loans reduce the
equity that you have built up in your home. If you are unable to make
payments, you could lose your home.

2. Compare home equity loans offered by at least four banking
institutions. In comparing these loans, consider not only the annual
percentage rate (APR) but also points, closing costs, other fees, and the
index for any variable rate changes.

HOUSING

Home Purchase

1. You can often negotiate a lower sale price by employing a buyer
broker who works for you, not the seller. If the buyer broker or the broker's
firm also lists properties, there may be a conflict of interest, so ask them
to tell you if they are showing you a property that they have listed.

2. Do not purchase any house until it has been examined by a home
inspector that you selected.

Renting a Place to Live

1. Do not limit your rental housing search to classified ads or
referrals from friends and acquaintances. Select buildings where you would
like to live and contact their building manager or owner to see if anything
is available.

2. Remember that signing a lease probably obligates you to make all
monthly payments for the term of the agreement.

Home Improvement

1. Home repairs often cost thousands of dollars and are the subject of
frequent complaints. Select from among several well established, licensed
contractors who have submitted written, fixed-price bids for the work.

2. Do not sign any contract that requires full payment before
satisfactory completion of the work.

Major Appliances

1. Consult Consumer Reports, available in most public libraries, for
information about specific brands and how to evaluate them, including energy
use. There are often great price and quality differences among brands.

2. Once you've selected a brand, check the phone book to learn what
stores carry this brand, then call at least four of these stores for the
prices of specific models. After each store has given you a quote, ask if
that's the lowest price they can offer you. This comparison shopping can save
you as much as $100 or more.

UTILITIES

Electricity

1. To save as much as hundreds of dollars a year on electricity, make
certain that any new appliances you purchase, especially air conditioners and
furnaces, are energy-efficient. Information on the energy efficiency of major
appliances is found on Energy Guide Labels required by federal law. Check
with your electric utility to learn if it has a program to help reduce the
costs of any appliance purchases.

2. Enrolling in load management programs and off-hour rate programs
offered by your electric utility may save you up to $100 a year in
electricity costs. Call your electric utility for information about these
cost-saving programs.

Home Heating

1. A home energy audit can identify ways to save up to hundreds of
dollars a year on home heating (and air conditioning). Ask your electric or
gas utility if they can do this audit for free or for a reasonable charge. If
they cannot, ask them to refer you to a qualified professional.

Local Telephone Service

1. Check with your phone company to see whether a flat rate or measured
service plan will save you the most money.

2. You will usually save money by buying your phones instead of leasing
them.

3. Check your local phone bill to see if you have optional services
that you don't really need or use. Each option you drop could save you $40 or
more each year.

Long Distance Telephone Service

1. Long distance calls made during evenings, at night, or on weekends
can cost significantly less than weekday calls.

2. If you make more than a few long distance calls each month, consider
subscribing to a calling plan. Call several long distance companies to see
which one has the least expensive plan for the calls you make.

3. Whenever possible, dial your long distance calls directly. Using the
operator to complete a call can cost you an extra $1 to $3.

OTHER

Food Purchased at Markets

1. You can save hundreds of dollars a year by shopping at the
lower-priced food stores. Convenience stores often charge the highest prices.

2. You will spend less on food if you shop with a list.

3. You can save hundreds of dollars a year by comparing price-
per-ounce or other unit prices on shelf labels. Stock up on those items with
low per-unit costs.

Prescription Drugs

1. Since brand name drugs are usually much more expensive than their
generic equivalents, ask your physician and pharmacist for generic drugs
whenever appropriate.

2. Since pharmacies may charge widely different prices for the same
medicine, call several. When taking a drug for a long time, also consider
calling mail-order pharmacies, which often charge lower prices. See the
October 1993 issue of Consumer Reports (available in most public libraries)
for a list of several of these pharmacies and their toll-free phone numbers.

Funeral Arrangements

1. Make your wishes known about your funeral, memorial, or burial
arrangements in writing. Be cautious about prepaying because there may be
risks involved.

2. For information about the least costly options, which could save you
several thousand dollars, contact a local memorial society, which is usually
listed in the Yellow Pages under funeral services.

3. Before selecting a funeral home, call several and ask for prices of
specific goods and services, or visit them to obtain an itemised price list.
You are entitled to this information by law and, by using it to comparison
shop, you can save hundreds of dollars.

The Consumer Literacy Consortium is a working group of representatives
from federal and state government agencies, consumer groups, business
organisations, and educational institutions that seeks to develop and
disseminate essential messages to inform and educate consumers. Membership in
the Consortium does not imply endorsement of all of its messages or the
products and services of other members.

Cooperative Extension System
Federal Trade Commission
Federal Reserve Board
Minnesota Attorney General's Office
National Association of Consumer Agency
Administrators
U.S. Consumer Information Centre
U.S. Food and Drug Administration
U.S. Office of Consumer Affairs

American Council on Consumer Interests
American Association of Retired Persons
Centre for the Study of Services - Check book Magazine
Consumer Action
Consumer Federation of America
National Coalition for Consumer Education
National Institute for Consumer Education
TARP, Inc.

Alamo Rent A Car, Inc.
American Insurance Association
Direct Selling Education Foundation
MCI Consumer Markets
NYNEX Corporation
Sprint





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