You may 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.
To make certain you have a cheap fare, even if you use a travel agent, contact all the airlines that
fly where you want to go and ask what the lowest fare to your destination is.
Be flexible, if possible. Consider using low fare carriers or alternative airports and keep an eye
out for fare wars.
Since car rental rates can vary greatly, shop around for the best basic rates. Ask about any
additional charges (extra driver, gas, drop-off fees) and special offers.
Rental car companies offer various insurance and waiver options. Check with your automobile insurance
agent and credit card company in advance to avoid duplicating any coverage you may already have.
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.
Leasing a car is very complicated. When shopping, consider the price of the car (known as the
capitalized 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. Keys to Vehicle Leasing: A Consumer Guide, published
by the Federal Reserve Board and Federal Trade Commission, is a valuable source of information about auto leasing.
You can save hundreds of dollars a year by comparing prices at different stations, pumping gas
yourself, and using the lowest-octane called for in your owner's manual.
You can save up to $100 a year on gas by keeping your engine tuned and your tires inflated to their
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.
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.
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 this coverage altogether. Taking these steps can save you hundreds of dollars a
Make certain that your new policy is in effect before dropping your old one.
You can save several hundred dollars a year on homeowner insurance and up to $50 a year on renter
insurance by purchasing 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.
Make certain you purchase enough coverage to replace the house and its contents.
"Replacement" on the house means rebuilding to its current condition.
Make certain your new policy is in effect before dropping your old one.
If you want insurance protection only, and not a savings and investment product, buy a term life
If you want to buy a whole life, universal life, or other cash value policy, plan to hold it for at
least 15 years. Canceling these policies after only a few years can more than double your life insurance costs.
Check the National Association of Insurance Commissioners website (www.naic.org/servlet/cis.Main)
or your local library for information on the financial soundness of insurance companies.
You can save more than $100 a year in fees by selecting a checking account with a low (or no) minimum
balance requirement that you can, and do, meet. Request a list of these and other fees (including ATM and debit card fees) that are
charged on these accounts.
Banking institutions often will drop or lower checking fees if paychecks 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
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 (FDIC or NCUA). An increasing number of products offered by these institutions,
including mutual stock funds and annuities, are not insured.
To earn the highest return on savings (annual percentage yield) with little or no risk, consider
certificates of deposit (CDs) or U.S. Savings Bonds (Series I or EE).
Once you select a type of savings or investment product, compare rates and fees offered by different
institutions. These rates can vary a lot and, over time, can significantly affect interest earnings.
You can save as much as a thousand dollars or more each year in lower credit card interest charges by
paying off your entire bill each month or by using a check, cash or debit card for purchases.
If you are unable to pay off a large balance, pay as much as you can and switch to a credit card with
a low annual percentage rate (APR).
You can reduce credit card fees, which may add up to well over $100 a year, by getting rid of all but
one or two cards, and by avoiding annual, late payment, and over-the-credit limit fees.
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.
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
Although your monthly payment may be higher, you can 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 7% annual percentage rate (APR), for
example, you will pay over $75,000 less in interest on a 15-year mortgage than on a 30-year mortgage.
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 7% to 6.5% can save you more than $5,000 in
interest charges, and paying two points instead of three would save you an additional $1,000.
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.
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.
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 points, fees and closing costs) will cost and whether, in the long run, it will cost less than
your current mortgage.
Home Equity Loans
Be cautious in taking out home equity loans. The loans reduce or may even eliminate the equity that
you have built up in your home. Equity is the cash you would have if you sold your house and paid off your mortgage loans. If you are
unable to make payments, you could lose your home.
Compare home equity loans offered by at least four reputable lending institutions. Consider the
interest rate on the loan and the annual percentage rate (APR), which includes other costs, such as origination fees, discount points,
mortgage insurance and other fees. Ask if the rate changes, and if so, how it is calculated and how frequently, as this will affect the
amount of your monthly payments.
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.
Do not purchase any house until it has been examined by a home inspector that you selected.
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.
Do not sign any contract that requires full payment before satisfactory completion of the work.
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.
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.
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.
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.
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.
At least once a year review your phone bills for the previous three months to see what local, local
toll, long distance, and international calls you normally make. Call several phone companies, including wireless companies, to find an
inexpensive calling plan that meets your needs.
If you make very few toll or long distance calls, avoid calling plans with monthly fees or minimums.
Check your phone bill to see if you have optional calling services you don't use. Each option you
drop could save you $40 or more each year.
Before making calls when away from home, compare per minute rates and surcharges for different
prepaid phone cards and calling card plans to find the one that saves you the most money.
Dial your long distance calls directly. Using an operator to place the call can cost you up to $10
If you use a wireless phone, make sure your wireless calling plan covers the calls you typically make. Understand
promotions, peak calling periods, area coverage and roaming, and long distance requirements to avoid paying too much.
Food Purchased at Markets
You can save hundreds of dollars a year by shopping at the lower-priced food stores. Convenience
stores often charge the highest prices.
You will spend less on food if you shop with a list.
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.
Before buying any used car:
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.
Have a mechanic you trust check the car, especially if the car is sold "as is."
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.
Since brand name drugs are usually much more expensive than their generic equivalents, ask your
physician and pharmacist for generic drugs whenever appropriate.
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.
Renting a Place to Live
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
Remember that signing a lease probably obligates you to make all monthly payments for the term of the
Make your wishes known about your funeral, memorial, or burial arrangements in writing. Be cautious
about prepaying because there may be risks involved.
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.
Before selecting a funeral home, call several and ask for prices of specific goods and services, or
visit them to obtain an itemized price list. You are entitled to this information by law and, by using it to comparison shop, you can
save hundreds of dollars.