Hey, cheapskate! Stand tall while you spend small
There are many ways to cut corners
and pinch pennies and not be destined to live a reduced-price life.
Being cheap is state of mind and a great way to turn your economics
around without denying yourself the simple pleasures of living.
Hey, it's even cool.
Mary Hunt, founding editor of the Web site Cheapskate
Monthly defines the oft-maligned cheapskate as dignified.
"A cheapskate has a balanced, honest and dignified
approach to money management. It's someone who doesn't spend more
than they earn or let money and material possessions rule their
thoughts and desires.
"A cheapskate does not buy on impulse,"
says Ms. Hunt.
Penny-pinchers use products and services resourcefully.
This can range from timing a shower to having leftovers for lunch
to washing and reusing disposable plastic bags.
Here are 25 ways to release the cheapskate within
you or to stop spending and start filling that cookie jar.
The more flexible your travel plans, the more you'll save. Use the
Internet to search for the cheapest tickets and buy them online.
Travel on low-fare airlines and through substitute airports. Cut
costs even more by traveling off-peak days such as Saturday and
Tuesday through Thursday. Buy your tickets in advance.
Shop around for the best basic rates. Inquire about additional charges
such as gas, drop-off fees and extra-driver rates. Find special
offers. Check with your insurance carrier and credit card company
to avoid duplicating coverage you might already have.
If you can, buy the car with cash or make a large down payment.
Get the lowest financing possible. To find the best rates offered
in your area, check Bankrate.com's
auto loan search engine. Do your homework before negotiating
on a vehicle. Research the vehicle's fuel economy, maintenance needs,
insurance and repair costs by checking new-car guides at Web sites
such as Edmund's,
Comparison-shop and be sure to let the salesperson know you are
doing that. Some fees can be negotiated, such as the "dealer
prep" charge. Try to get the dealer to drop the fee. It's just
more profit for them.
Before you buy a used car, always compare the seller's asking price
with the average retail price in a car price guide such as Kelly
Blue Book. Have a mechanic check the car, especially if the
car is sold "as is." Buy from people you know and trust.
They are more likely to sell at a lower price and point out any
problems with the vehicle.
Don't lease just because the payments are low. After all, in the
end, you won't own the car. If you do decide to lease, know the
fair market value of the car and then haggle price and terms with
the dealer just as you would if you were buying. Make sure you're
clear on all the fees and terms, especially excess mileage penalties
and "wear and tear" fees.
Use this auto
lease payment calculator to determine how much this lease really
is costing you.
Keep your engine well-maintained and your tires at the proper pressure
to save on fuel costs. Look for a gas station that supplies free
air. Combine errands into a single trip and use the family's most
fuel-efficient car when doing extensive driving. Compare prices
at different gas stations; pump the gas yourself; and use the lowest
octane possible for your car.
Check out this calculator
to find out if you can save by driving to a cheaper gas station.
Shop around as rates vary widely. Call at least four agencies. You
can lower your rates by raising your deductibles on collision and
comprehensive coverage to at least $500. If you have an old clunker,
drop the coverage altogether.
Raise your deductibles. Always make sure that you purchase enough
coverage to replace the house and its contents. Make sure your new
policy is in effect before dropping an old one.
For insurance protection only, buy a term insurance policy. Don't
cancel your whole life, universal life or other cash value policy
before 15 years, or your life insurance costs could be doubled.
Select a free checking account or one that has no minimum-balance
requirement. If you cannot find a bank with free checking in your
area, consider an online bank. Check with your bank to see if it
will lower checking fees if you use direct deposit.
Do not pay ATM fees. It's throwing away money. Always use your bank's
ATM or get cash back from point-of-purchase sales at places such
as at the grocery store. This strategy is particularly effective
when traveling, and eliminates the late-night drive in the rental
car through unfamiliar territory searching for a network ATM.
Rather than stashing idle cash in low-yielding checking or savings
accounts, put your money in short-term certificates of deposit or
money market accounts. Internet banks offer some of the best yields.
Want to know which financial institution is paying the highest yield?
Check out Bankrate's
savings and CD search engine.
To eliminate all interest charges and fees, pay off your account
each month. If you do carry a balance, switch to a card with a low
interest rate. Bankrate's
credit card search engine will help you find the best deal on
a card. Limit yourself to two credit cards. Read your monthly billing
statements carefully making sure you pay on time and don't exceed
your credit limit. Those penalty fees are the worst.
Your first house need not be the "dream home." Lower your
expectations -- start with a townhouse or condo. Just start building
equity. If you are a first-time home buyer, find out if you qualify
mortgage and down payment programs in your neighborhood. Get
the shortest-term mortgage you can afford. The monthly payments
will be higher, but you'll save thousands of dollars in interest
charges. Go with a low-rate mortgage and the fewest points. To find
the best rates in your area, check Bankrate's
mortgage rate search engine.
Consider refinancing your mortgage if you can get a rate at least
1 percent lower than your existing mortgage rate. But first, look
at your current payment, figure the costs of refinancing and see
how long it would take you to recoup the charges.
Use this refinancing
calculator to decide whether refinancing will save you money.
Home equity loans:
Generally, the interest paid on home equity loans is tax deductible.
Using home equity loans or lines of credit can be a cheap way for
homeowners to consolidate expensive, high-interest debts like credit
cards and reap the tax savings. Use caution -- if you cannot make
the payments, you could lose your house.
Consult Consumer Reports for information about specific brands and
how to evaluate them, including energy use. Once you find a brand,
call a few stores and ask for the prices of specific models. After
each store offers you a quote, find out if it is the lowest price
they can offer. Haggle!
Make sure your appliances are energy efficient, especially air conditioners
and furnaces. Enroll in a load-management and off-hour rate programs
offered by your electric company. Get a home energy audit to find
ways to save on heating and air conditioning. Some utility companies
do the audit for free or for an affordable charge. Try the new generation
of compact fluorescent light bulbs. They use 70 percent less electricity
and last up to 10 times longer than incandescent light bulbs. They
screw into the same sockets and produce the same quality of light
Local telephone service:
Check with your phone company to see if it offers a flat rate or
measured service plan. Get the cheapest plan possible. Get rid of
optional services such as three-way and call waiting. Check the
phone bill to see if you have any optional services that you really
don't need or use.
Long distance phone costs:
Long-distance calls are cheaper if made in the evening or on weekends.
If you make a lot of calls, consider a long-distance calling plan.
Check rates with three or four companies to see which has the least
expensive plan for the type of calls you make. Every few months
shop again. Rates are changing regularly and if you often make calls
outside your local area, you can save a lot. Save on fees by having
your long-distance carrier bill you directly rather than through
your local telephone company. Or, buy a long-distance phone card
with rates of 3.5 to 5 cents per minute.
Always shop with a list. Compare price-per-ounce or other unit prices
on shelf labels. Stock up on items you regularly use during sales.
Use coupons, but only for products you normally buy.
Ask for a generic equivalent; it's much cheaper. Pharmacies' charges
vary, so comparison shop regularly. Consider using a mail order
pharmacy, which often sells for a lower price.
Start holiday shopping early and spread it out over a few months
instead of a few days. If your state offers "tax-free"
shopping days during the summer -- get a jump on birthday and holiday
ALWAYS send in for the rebate on a purchase, whether it's $2 or
$50. It all adds up.
On the job:
Give yourself a raise by contributing to your company's 401(k) program.
Not only will you be wisely sacking money away for retirement, but
you'll pay less tax each pay period. Retirement contributions are
not taxed until they are withdrawn. Plus, most companies contribute
to the 401(k) accounts of participating employees. That's a raise.
Go to matinees of first-run movies. You'll still get the big-screen
experience but at a significant savings. Try out a dollar theater,
a local film festival or even a drive-in. To really save, rent movies.
Better yet, check out your local public library for free movies
to borrow or work as a volunteer at a local fair or festival --
you'll get in free.
How about you? Are you proud to be a cheapskate? Making
a difference in your budget by pinching a few pennies where it doesn't
really hurt too badly? If you'd like to share your tips and make
a little cash too, enter our Frugal
U contest. Each month the best tipster wins $100.