How to Save $5,000 This Year
How to Save on Health Care
Both Gale Zucker, 52, and her husband, David Engler, also 52, are self-employed and their health insurance―which also covers sons Leo (not pictured), 19, and Gabe, 16―pays only for major medical events and a portion of routine care after the family meets a hefty $5,600 deductible. When she or David makes an appointment to see a doctor or a dentist, “we let them know our situation and ask each one how to cut expenses,” says Gale. “Our goal,” she says, “is to receive some of the same-quality health care as those who can afford better, more extravagant insurance.”
Medical bills are skyrocketing, costing the average household $2,976 last year (average numbers throughout are from the U.S. Bureau of Labor Statistics). Here’s how to reduce the pain:
- Use a retail clinic. If you have a serious but not life-threatening malady, such as a rash or a sore throat, consider heading to a medical clinic at a nearby pharmacy (like Walgreens or CVS), rather than your doctor, an urgent-care center, or the emergency room. Staffed by nurse-practitioners or physician’s assistants, they can treat minor conditions for less. Think $110 compared with $166 for a visit to your family doctor. Annual savings: $168
- Try Planned Parenthood. Visit one of these clinics if you need a routine Pap test, a new birth-control prescription, or even a flu shot. Call your local office to find out what services it offers and its fees (which vary from state to state but are often less than a private doctor’s). Most locations accept insurance.
- Head to a dental school for routine care. Most schools have clinics staffed by second- or third-year students that offer cleanings for up to 50 percent off the going rate. Call Oral Health America (312-836-9900) to find the location nearest you. Annual savings: $102
- Join a network. No dental insurance? If you have a big family or teeth that need lots of attention, or if you’re over 50 (which is when gum problems tend to occur), consider a discount dental plan. For $100 to $200 a year, you’ll get discounts of 10% to 60% on services and treatments. Visit dentalplans.com to find one.
- Hit the Web for eyewear. Look at sites like visiondirect.com and lens.com, for contact lenses; and zennioptical.com, where you can buy a pair of frames for as little as $8.
- Find the best deal on prescription drugs. First determine which local store has the best price by visiting shopping.destinationrx.com. Then compare your findings with online pharmacies, such as costco.com, drugstore.com, and familymeds.com.
How to Save on Entertainment
A year ago, Mavis Fowler-Williams, 47, was laid off from her job, forcing her to cut back on her family’s extracurricular spending. Costly lessons for her children have been replaced with free lessons offered by New York City's parks department. Instead of renewing annual memberships, Mavis takes advantage of free or discounted admission days. Family movie night (Mavis’s husband, Windell Williams, 48, is a filmmaker) now usually means a DVD borrowed from the library. Mavis is also on various local e-mail lists, including riversideparkfund.org, so she can be notified about free cultural events. “Our number one priority,” says Mavis, “is to make sure we can continue to enjoy life and all the opportunities the city has to offer while not spending a lot of money.”
Families spend $2,835 on recreation each year. Two thumbs-up for these savings tips that won’t cut into the fun:
- Save up to 20%. Buy refurbished Apple iPods and computers from apple.com. Click on “Store” to find pre-owned gadgets that have the same warranty coverage as new ones.
- Surf for cheap tickets. Looking for affordable seats to a concert, a sporting event, or a Broadway show? Zebratickets.com aggregates prices from major ticket retailers so you can find the best deal. Also, you can have the site alert you if, say, seats to an Alicia Keys concert dip below $50.
- Save on the slopes. Ski buffs will love liftopia.com, a site that offers an average of 33 percent off lift tickets at more than 120 ski resorts, including Killington and Whistler.
- Swap movies and more. Sites like titletrader.com and swaptree.com make it easy to exchange DVDs, CDs, and books for others. Or sign up with goodreads.com. You’ll receive reading updates from friends, so you’ll know when to ask to borrow the page-turners they just finished.
How to Save on Food and Clothing
With a household of seven kids, Mary Crotty, 49, feels as if she can never save enough. She and her husband, Dan, 49, a bond trader, trimmed hundreds each month by streamlining their food costs. Eating out has become a thing of the past, and the three cases of sports drinks that she had been buying weekly have been replaced with powdered mix or water from the tap―saving them $50 a week. To cut impulse spending, Mary subscribes to Relish!, a service that creates dinner menus and puts together an ingredients list for those meals. She then faxes that list to a local supermarket that offers free delivery.
The average household spends $3,744 a year on groceries. For a large family, this number could easily triple. Follow these tips to put your food budget on a diet:
- Track your food budget. At the start of each month, attach an envelope to the refrigerator. Each time you buy food, drop the receipt in the envelope. At the end of the month, analyze your spending to see where you can make cuts. Aim to spend no more than $125 a week for a family of four, says Lynnette Khalfani-Cox, the author of Zero Debt ($15, amazon.com).
- Make a list and stick to it. You’ve heard this before, but it bears repeating: People who avoid impulsive shopping save big, spending up to 23 percent less on grocery bills, according to research from the University of Pennsylvania. Annual savings: $861
- Join a food co-op. Become a member of a locally owned grocery store in exchange for a share of the bounty. Find a co-op near you at coopdirectory.org.
- Cut your meat. “Any recipe calling for a pound of ground meat can be substituted with 13 to 14 ounces,” says Melissa d’Arabian, host of Food Network’s Ten Dollar Dinners With Melissa d’Arabian. Those few dollars of savings add up quickly.
- Buy more fruits and vegetables. Research from the American Dietetic Association shows that when families add more produce to their diets, their waistlines get smaller and their food budgets can shrink by 25 percent. Annual savings: $936
- Befriend the managers. The folks in charge of the produce, meat, dairy, and seafood departments can tell you what time of day food is marked down so you can score the best deals.
- Slice your own veggies. Those prepackaged foods will cost you. Take a minute or two to wash your own greens and cut your own fruit and you’ll slice up to 78 percent off your bill. Annual savings: $408
- Shop smarter. Hit up a local outlet for baked goods from Entenmann’s, Arnold, and Boboli at up to 50 percent off. Search the outlet locator at gwbakeries.com for locations.
- Sign up with couponmom.com. This site provides a handy list of what grocery deals are available near you, plus a load of printable coupons.
- Swap coupons. Become a member of eCoupon’s Grocery Coupon Trading Club. Collect a stack of coupons for items you don’t need, then mail them to the website. In return, select up to 25 that you do want.
- Take advantage of the competition. Many supermarkets will match other retailers’ discounts, but most don’t advertise this. Ask a manager if your store has this policy.
Putting clothes on your back shouldn’t cost $1,800 a year. Here’s how to fill up your closet without spending a fortune:
- Save up to 15%. Your AAA membership gets you more than roadside assistance. It scores you discounts at retailers like Target.com, New York & Company, and more. Visit aaa.com for details.
- Shop the middleman. Brand names tend to go on sale more often (and at deeper discounts) at retailers with a lot of variety, like department stores, compared with a label’s own store or website.
- Get secret deals. Several department stores (like Saks Fifth Avenue, Nordstrom, and Neiman Marcus) now offer unadvertised, online-only rush sales to their e-mail subscribers. Sign up and you’ll receive friends-and-family promotions, too (usually 25 percent off). Annual savings: $450
- Cash out. Some shops, especially independent ones, will offer you at least 10 percent off when you pay with cash. Ask a manager or the owner before paying. Annual savings: $180
How to Save on Home Expenses
When Molly Nee and her husband, Paul, decided to start a cultural website last year, Molly says, “we knew our income was going to take a hit, so we began looking for ways to live on less.” Since their careers allowed them both to work remotely, Molly and Paul opted not to renew the lease on their apartment in New York City (where expenses came in many forms) and relocated to a smaller town―saving them thousands of dollars each month. “Instead of a family outing revolving around a shop or an eatery,” she says, “we’re now likely to go apple picking or take a walk along the river. We’ve seen we can subsist on much less.”
Housing costs an average of $17,109 annually. Here are ways you can avoid pouring your money down the drain:
- Cut your energy usage. It's the No. 1 way to save on utilities. Click here for suggestions on how you can reduce yours. Annual savings: $596
- Make free phone calls. Download a Voice over Internet Protocol (VoIP) application onto your computer and dial up family and friends worldwide at no charge. Sign up at skype.com, lingo.com, or voip.com.
- Audit your bills. A recent study by the Citizens Utility Board found that the average cell-phone user could save $331 a year by shopping for a plan that better matches her usage. Find a suitable one at billshrink.com or lowermybills.com, two free cell-phone-plan comparison sites. And don’t file away cable and phone bills before taking a hard look at them. If there are services you rarely use or could live without, like premium movie channels and call forwarding, you could save as much as $500 a year. Annual savings: $831
- Appeal your tax bill. Recent market declines mean you may be paying too much in property taxes. Get a copy of your home’s assessment from your local assessor’s office and compare it with assessments on similar houses in your area. About 75% of appeals result in a reduction of taxes, says Richard Roll, president of the American Homeowners Association.
- Look into refinancing. Interest rates on home loans hit historical lows in the spring of 2009 and have remained low ever since. Use the refinance calculator at bankrate.com, which will figure out how much you’ll shave off your monthly payments with a lower interest rate, along with how many months it will take you to recoup the cost of refinancing your mortgage.
- Renegotiate your rent. Ever wonder if you’re shelling out too much? Log on to rentometer.com to find out whether your payments are reasonable for your area. Then present your findings to your landlord, or use the data when looking for a new place.
- Reduce your payments. If home values have dropped drastically in your area, or if you’re struggling to pay your mortgage, you may be eligible for a Home Affordable Refinance or Modification. This federal program helps qualified home owners by allowing them to refinance at lower rates or modify their loans to help them save on their mortgage. Visit makinghomeaffordable.gov for eligibility information.
- Cut your home owner’s insurance by installing safety devices. Many insurers offer discounts of about 5% to home owners who add smoke alarms and dead bolts to their homes. Call your provider to find out which items will qualify you for a discount. Annual savings: $40
- Boost your deductible. Increasing your policy’s deductible from $200 to $1,000 may save you as much as 25% on insurance costs annually. The average person files a claim just once every 8 to 10 years, so you’re better off stashing the amount of your deductible in an interest-bearing savings account. Annual savings: $201
How to Save on Transportation
Last winter, first-grade teacher Kelly Finkel, 30, and her husband, Darren, also 30, a high school teacher, realized that they needed some new wheels―and fast. Kelly was pregnant with their first child, and their 11-year-old two-door Honda Civic wouldn’t fit all the baby paraphernalia. So they contacted the New Jersey teachers’ association, which offers dues- paying members discounts on everything from books and appliances to, yes, new cars. “Two days before our daughter, Elliot, was born, the organization helped us negotiate a new Honda Fit down to the invoice price,” says Kelly. “It took several phone calls, but it saved us hundreds of dollars.” This past August, they moved into a Dutch Colonial that’s a 10-minute commute from the schools where they teach.
Getting from here to there costs $8,604, on average, annually. Follow these suggestions for getting to work―and around town―without running your wallet dry:
- Be a Zen driver. Aggressive driving guzzles up to 33% more gas on the highway and 5 percent more around town, according to the U.S. Department of Energy. Pretend there’s an egg under the gas pedal, suggests Christie Hyde, a spokesperson for AAA. “You don’t want to hit the pedal so hard that it will break the egg.” Annual savings: $397
- Take the quickest route. The shortest way isn’t always the most fuel-efficient. Sometimes it can take more gas to drive three miles riddled with stop signs and clogged with traffic than it does to drive four or five miles on empty roads. Use a GPS to find the most efficient way.
- Ignore the tire manufacturer. Don’t follow the number printed on the tire’s sidewall when adding air. Instead, fill the tires to the pressure that is printed on the sticker on the driver’s-side door jamb or in the glove box and get 3 percent better fuel efficiency. “Different vehicles weigh different amounts,” says Hyde, “and the number on the tire isn’t based on your car.” Annual savings: $81
- Get a checkup. Performing regular tune-ups on your vehicle can boost its gas mileage by about 4 percent, according to the U.S. Department of Energy. (Schedules vary with each model, so check your car’s manual.) Annual savings: $64
- Evaluate your insurance. If your car has a low resale value, you may want to opt out of collision coverage. Go to kbb.com to determine your ride’s current value. Then take your comprehensive and collision premium and multiply that figure by 10. If your car is worth less than that, drop the coverage, says Bob Hunter, director of insurance for the Consumer Federation of America, a consumer-advocacy group.
- Bike it. Commuters on two wheels who ride to work at least three days a week can get a tax break of $20 a month from participating employers to help cover equipment costs and storage. Annual savings: $240