smart spending

9 cash-saving tips that pay big bucks

The expression "a penny saved is a penny earned" doesn't cut it these days. But saving a few dollars here and there can add up, particularly if you park the money in a high-interest-bearing savings account or, better yet, a tax-favored vehicle such as a 529 plan or an IRA containing a mix of investments that offer higher returns over the long run.

Compare High Yield Savings Account Rates

OK, so 10 percent annual returns from the stock market may seem far-fetched after the recent market mayhem. But we contend that it's not unreasonable to expect 7 percent annualized returns from a conservative blend of bonds and stocks over a period of 15 years. These are the assumptions we used below to calculate how the few bucks you squirrel away today can turn into big-time savings later.

Form a cooking co-op

Sure, cooking is cheaper than eating out, but a daily home-cooked meal simply isn't an option for many full-time working parents. Ginny Bowie, vice president of a Richmond, Va.-based financial securities firm and mother of three, solved her scheduling and budgeting dilemma in one swoop by forming a cooking co-op.

9 ways to save big bucks

  1. Form a cooking co-op.
  2. Find free entertainment.
  3. Use the public library.
  4. Bargain shop.
  5. Communicate cheaply.
  6. Weatherize the house.
  7. Raise the deductibles.
  8. Time the vacations.
  9. Negotiate.

"Every Tuesday night, I cook dinner for three families besides my own, which is about 18 to 20 people, and deliver it to their door," Bowie says. "Monday, Wednesday and Thursday, the three other families cook for me."

Bowie's Web site and DVD, "If it's Tuesday ... it's my night 2 cook," contain recipes and tips for starting a co-op. She says cooking in bulk has cut her grocery bill in half and practically eliminated her need for eating out.

What it's worth: The average household spent $6,133 per year on food -- $3,465 on groceries and $2,668 on meals away from the home -- in 2007, the most recent year for which data are available from the U.S. Bureau of Labor Statistics. We suspect food prices soared in 2008, but let's use these numbers anyway. Assuming that a co-op could reduce the grocery bill by half and lower restaurant expenses by, say, 60 percent (factoring in the occasional meal out), families could save $3,333 per year by going co-op.

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