Find Cheaper Auto Insurance
Average Savings: $65
Annual surveys of Consumer Reports readers have shown that many have stayed with the same auto insurer for 15 years. Depending on your profile and where you live, you might be able to save hundreds a month by shopping around. (In all the categories listed, the monthly savings shown are Money Lab estimates based on what average consumers spend. Your actual savings will depend on your circumstances.)
For example, a married couple without violations or accidents but with a driving-age son in Los Angeles can save $380 per month on standard coverage by switching to a lower-cost auto insurer, according to data compiled by the California Department of Insurance. But a retired couple with no violations in Fargo, N.D., can expect to save only about $30 per month by switching insurers.
How to Do It
Start at the Web site of the National Association of Insurance Commissioners, and click on NAIC States & Jurisdictions to find your state's insurance department. Most provide comparative premium quotes based on standard customer profiles. If your state doesn't, you can get quotes from insurers by phone or over the Internet. You can also compare premiums from multiple carriers by using independent Web sites, such as Insweb, Insurance.com, and Insure.com.
Optimize Your Life Insurance
Average Savings: $110
Life-insurance premiums have dropped so dramatically since the 1990s, it will probably pay for you to replace a policy bought years ago with a comparable one. A $500,000, 20-year guaranteed level term policy from Prudential, for example, would have cost a healthy, nonsmoking, 50-year-old man about $2,125 a year in 1998, according to Accuquote.com. Today the same guy, now 60, could pay Prudential $1,385 a year for the same coverage over the next 10 years. Savings: $60 per month.
Another option at any age: Adopt a healthier lifestyle and get re-rated for a lower premium. For example, a 40-year-old man with a $1 million, 20-year term policy could save $50 a month by cutting his cholesterol by 30 points; $65 a month if he dropped 50 pounds to reach normal weight; and $165 a month three years after he quit smoking.
How to Do It
Get a physical checkup and follow your doctor's advice for shaping up before applying for a new policy. You can get premium quotes at LifeInsure.com. Don't cancel your existing policy until you have a new one already in place.
Shop Smart for Food
Average savings: $200
Making different choices in the supermarket and when eating out can net monthly savings ranging from $130 to $255. The average family of four can chop its grocery bill by $190 a month by shifting to a lower-cost mix of foods, according to data from the Department of Agriculture. The agency monitors prices of four nutritionally balanced grocery baskets at different cost levels: liberal, moderate-cost, low-cost, and thrifty. The liberal basket contains more food per month than the moderate-cost one, a greater proportion of pricier food like beef and fish, and more wasted leftovers.
In 2006 American families spent 44 percent of their food budget eating out. By cutting restaurant spending in half, you can save another $30 to $60 per month.
How to Do It
Plan menus around sales on fresh poultry, fish, meat, dairy, and produce, and make use of leftovers. Avoid costly prepared meals. Eat more low-priced, high-nutrition foods such as beans and potatoes, says Andrea Carlson, a USDA economist. Shop in lower-cost stores such as Aldi Foods, PriceRite, Costco, Trader Joe's, Wal-Mart, and Sam's Club, but be sure to compare prices. Try less-expensive store brands. Sign up for store discount cards. Stock up on sale-priced staples.
When eating out, take advantage of prix-fixe meals and off-hour discounts. Eat half of the big portions in vogue today at the restaurant and take the rest home for a next-day encore.
Stop Paying Bank Fees
Average savings: $25
The American Bankers Association says 52 percent of consumers spend nothing on bank fees each month. But somebody's paying fees, and lots of them, because the Federal Deposit Insurance Corp. says banks collected $39 billion in account fees and penalties last year. That works out to an average of $28 per month per household. But with some planning, you can pay zero.
How to Do It
Bank at a large institution with lots of ATMs in convenient locations to avoid the cost of using other banks' machines—as much as $4 per withdrawal. And use the no-fee cash-back option at supermarkets.
Shop for free checking and strictly adhere to provisions for a minimum balance, direct deposit, or other conditions to avoid monthly fees. Keep track of checks, withdrawals, and debits to avoid overdraft fees averaging $27.
Call Up Phone Savings
Average savings: $35
The average family spends $90 a month for a home phone, cell phones, pagers, and phone cards, according to the Bureau of Labor Statistics. When we examined real phone bills, we uncovered savings from $15 per month for budget callers to $55 per month for heavy users.
How to Do It
Peruse your last few months' phone bills to assess how many minutes you typically use on landline and wireless calls. Comparison shop among cellular service providers, the local phone company, independent long-distance carriers, and your cable TV company. Don't buy more than you need, such as an unlimited cellular plan if you rarely go over 900 minutes per month.
Consider all possible money savers, such as measured local service, prepaid phone cards and cell phones, cut-rate long-distance carriers, VoIP service, and landline/Internet/TV packages.
Pay Off Your Credit Card
Average Savings: $65
On average, consumers who carry a balance owe $2,200, on which they pay 15.2 percent in annual interest charges. Eliminate that and save $28 per month. Some 15 percent of consumers carry balances of $10,000 or more, according to Fair Isaac, the credit-scoring company; they can save at least $125 per month by paying off their debt.
How to Do It
Paying off your balance is easier said than done. The trick is to stop charging. Then pay more than the minimum required each month until it's paid off. Dig up cash for this from your U.S. Treasury stimulus check, garage sales, or extra work part-time.
Increase Your 401(k) Contribution
Average tax savings: $125
If you're not already contributing the maximum, put more into your 401(k), IRA, or other tax-deferred retirement account. You'll also cut the amount of income tax you'll pay each month. (Note that this does not apply to Roth accounts.)
Paying $500 a month into your 401(k) plan, for example, will reduce your federal income tax bite by $50 to $175 per month, depending on your tax bracket. Of course, you'll pay that tax down the road, when you withdraw from your plan in retirement. But in the meantime, invest your tax savings or use them to offset rising prices elsewhere.
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