Mind Over Money | Reader's Digest

Mind Over Money

In tough times, psyching yourself up to save is even more important. Here's how.

By Jean Chatzky from Reader's Digest | June 2008

Inspired to save? I hope so. But maybe you’re wondering where the money will come from. I put my head together with Jeff Yeager, author of The Ultimate Cheapskate’s Road Map to True Riches, to suggest ten places to start.

1. Adjust your withholding. If you get a tax refund each year, you’re giving the government a free loan. Change your withholding, then save the difference in your take-home pay.
Savings: The average 2006 tax refund was $2,324 — $194 a month spread out over a year (plus interest).

2. Limit trips to the supermarket. Every time you walk through those automatic doors, you’re bombarded with opportunities for an impulse buy, and you may walk out with at least one or two things not on your list. Try to make one big trip a week.
Savings: If you make four trips a week and spend $10 extra each time, cut three to save $120 a month.

3. Coupons aren’t just for groceries anymore. You can find coupons for movies, restaurants, and even clothing stores. Check out retailmenot.com.
Savings If your family dines out twice a month at $75 a meal, you’ll save $180 a year with 10-percent-off coupons.

4. Use public transportation or carpool. You’ll save on gas, maintenance, and even parking. Many companies take the cost of a monthly train or bus pass out of your paycheck pretax, saving you even more.
Savings: If you commute 25 miles round-trip each day, save about $100 a month by alternating driving each week with a friend.

5. Consolidate your plugs.
Between 5 percent and 15 percent of the power used by electronics is consumed when they’re turned off. Plug your TV, DVD player, cable box, and home entertainment system into a power strip or surge protector, then unplug it at night and when you’re not home. Savings: If your electric bill runs $120 a month, you’ll save up to $216 a year.

6. Lose the long-distance service. Even if you don’t make a lot of lengthy calls, you’re likely paying automatic billing fees each month just for having the service. Costco and Sam’s Club sell prepaid calling cards for around 3 cents a minute. Or try an Internet service like Skype.
Savings: Up to $110 a year in fees.

7. Audit your bills. Call your wireless provider once a year to make sure you’re on the best plan. Do the same with your cable, Internet, and (if you’re not taking the advice above) long-distance providers. Bundling all three usually nets a discount.
Savings: Several hundred a year.

8. Shop health food stores. They often have bulk sections, where you can buy things like cereal and beans by the pound at big savings.
Savings: Oatmeal, for instance, is 89 cents a pound at my health food store, and $2.79 for an 18-ounce canister at the supermarket. If you buy it weekly, you save $100 a year.

9. Buy pet medicine, supplies, and food online. Petcarerx.com and 1800petmeds.com offer premium brands for less.
Savings: Up to 50 percent.

10. Recognize what things really cost. Before you commit to that new car, use Edmunds’s True Cost to Own calculator. Input the car’s make, model, and year to find out what it will actually cost you each year.