Published: January 23, 2009 02:04 pm      

MONEY: You don't have to clip coupons to save cash

By EILEEN AJ CONNELLY

AP Personal Finance Writer



NEW YORK (AP) — It's easy to get sloppy with your finances when times are good: adding a premium cable channel, signing up for the deluxe gym membership or reaching for the pricey Italian coffee. "But there's nothing like a good old fashioned recession to remind people you can't be sloppy all the time," said Eric Tyson, author of "Personal Finance for Dummies."

As the nation tries to tighten its collective belt, it might seem difficult to find any penny-pinching measures that can save big dollars. "Don't fall into the mind-set that 'We're doing all we can already,'" Tyson advised. "Everybody has fat in their budget. Question why you're doing what you're doing."

The Associated Press asked four financial experts for tips to save money on everyday expenses — without clipping coupons. Their ideas ran the gamut from learning to cook to how to cut hundreds off your heating bill.

Just as important as the strategies they advocate are the financial exercises behind them. Scrutinizing ongoing spending, mining discounts from existing accounts and searching for extras you may not be utilizing that can be painlessly cut should help spark ideas for even more ways to trim costs on your own.

First, know where the money goes.

— Comb through checking account and credit card statements to get a clear view of your habits. It's what Tyson calls, "The sometimes tedious and painful process of looking where you're spending your money."

— One savings source that may be immediately apparent: the extra fees and charges on various accounts. From ATM fees that pile up, to late charges and over-limit fees, many people can save hundreds of dollars a year by adopting more careful money management habits. And taking a good look at what you spend your money on can help define priorities that can save you even more.

Look for savings at the grocery store.

— Kick the bottled water habit. Tyson notes bottled water drinkers can spend $600 to $800 a year, but a good home filtration system runs about $200. "You'll pay for it in a couple of months and then you'll save a lot of money on bottled water."

— "Tightwad Tod" Marks, who blogs about penny pinching for consumerreports.org, suggests only buying items that are on sale. Read through advertisements and stock up on things like cereals, pasta, juices and other staples, he advises. "All this stuff goes on sale at predictable intervals," he says.

— Buy private label brands, Marks adds. For many items, from peanut butter to hot cereal, tea bags to sandwich bags, there is little or no difference in quality, and you can save 20 to 50 percent.

—Shop in warehouse clubs and buy nonperishable goods like paper products, cleaning supplies and even coffee in bulk. But watch out for unplanned purchases. "The deals are so good you can end up in the poor house," Marks says. "It requires tremendous discipline."

— Learn how to cook, Tyson recommends. Many people spend heavily on take-out or processed foods because they can't prepare a meal, but learning a few basic dishes can save countless dollars over the years.

Examine existing accounts.

— Ramit Sethi, author of the blog www.iwillteachyoutoberich.com, advises using major credit cards to make big purchases like refrigerators and home electronics, which nearly always results in a one-year warranty extension. That eliminates any reason to purchase an extended warranty from the store.

— Check your credit card, insurance company and other account Web sites for shopping discounts. Many companies offer customers a chance at extra discounts by linking to retail sites. Sethi notes some card companies also offer extra rewards points if you begin your shopping on their site. Warehouse clubs also frequently offer Web site discounts for members.

— Take advantage of discounts offered through memberships in the AAA, business organizations and social groups like the AARP when traveling, suggests Lynnette Khalfani-Cox, author of "Zero Debt," and other books, who bills herself as "The Money Coach." Asking what discounts might be available is sometimes all it takes to find out that hotels and restaurants offer special rates.

— Review insurance accounts and try to trim costs by eliminating unneeded coverage, for instance collision insurance on an older car. Shifting several insurance accounts to one company may also activate multiple policy discounts, says Khalfani-Cox.

— Savings of 25 percent or more may be possible by raising deductibles on homeowners' insurance or auto policies, she says, but cautions not to increase deductibles beyond what you can reasonably afford to pay if a problem occurs.

Trim costs around the house.

— Sethi advocates spending "a la carte" instead of automatically paying higher rates for subscriptions and ongoing services. "It's a bit surprising, we tend to think that if we're on a subscription basis, we're getting savings," he says. But you may be able to save $40 to $50 a month, for instance, by cutting back on the add-ons for your cable service.

Other places this strategy may work include reducing a Netflix subscription to the least expensive option, or cutting it out altogether and getting films from the library or watching free programs online. Also try paring back your cell phone options to a low number of minutes and text messages, rather than unlimited service.

— Hardcore savers might want to try this tip from Marks: he keeps his home thermostat set at 60 degrees and heats the rooms where his family spends the most time with efficient electric baseboard heaters. "It saves more than $200 a month on what it would cost to heat the home when keeping the thermostat at 68."



Copyright 2009 The Associated Press.