 | | |  | Savings Where You Least Expect It
Painless
expense cuts that are hiding in plain sight
By
Chuck Jaffe
MarketWatch
It's the time of year when a lot of families are thinking about getting back to school, but it's also a good time to get back to savings.
Unlike
school, of course, savings is something that people can practice every day, all year long. While many people are consistent savers, others save in fits and starts, spurred by short-term needs or New Year's resolutions that are quickly forgotten.
By
taking steps to increase savings now, the grown-ups in a family can pay off summer vacations, overcome the pinch of renewed school spending, set themselves up for a plush holiday season or help fund retirement accounts.
Most
"cut-spending-to-boost-savings" plans can be hard to sustain. Stand-bys like "make your coffee" or "bag your lunch" may work for some people, but they're hardly complete solutions. I know plenty of people who consider the coffee stop a central part of their daily routine -- I don't drink coffee, and have heard many times how I can't quite grasp the comfort of this daily indulgence -- and might shift gears for a short while before falling into old habits.
The
right way to cut spending, in fact, may not be to end the ritual but to scale it back. If the ritual can be enjoyed for less money - order a medium-size instead of a large -- then savings can come in the form of moderation. (The same goes for people who insist that buying lottery tickets gives them both entertainment and hope; buying fewer tickets doesn't extinguish hope, at least not if the extra money goes to savings.)
The
good news is that there are much bigger savings available in ways that consumers tend to overlook.
Consider
the following:
Examine your telephone plan
In
the years since phone companies tried all sorts of annoying tactics to sign up consumers for their services, we have gone back to an era where consumers choose a plan and forget about it.
That
said, service plans are constantly changing, and typically have improved over time. This is especially true for land lines: I noticed an advertisement from my home phone provider that promised my current service for $16.50 less than what I was paying. One call to the phone company captured the savings; best of all, that's about $200 less per year in fixed costs, which most people don't figure they can cut.
In
addition, many people have duplicate phone service. Some consumers don't need a traditional home phone because of their cell phone service; others use Internet-based phone service and more.
Pay
for what you need, and pay as little as possible for quality. Start by calling phone providers to see if they can do better for you. If you want to dig deeper in your search for savings, consider Web sites like Saveonphone.com that allow for easy comparison shopping. Go to Saveonphone.com
Refinance
credit-card debt
Interest rates have been rising, but there are still plenty of cards offering good fixed-rate deals with no annual fee. Even if you've signed up for a rebate or points deal, and are carrying a balance that accrues interest at a high rate, you can still find some rate improvement.
Teaser
rates -- where a card issuer offers an ultra-low rate for a limited time -- are another possibility, but it's important to understand the rules. Consumers can surf from one teaser rate to the next, provided they keep their credit score high enough, but terms have been getting tighter. In many cases, a low fixed rate will beat the swings of trying to ride and manage the teaser deals.
As
with telephone savings, start by asking your own credit issuers about deals. You may be able to find a better offer without having to apply for a new card. From there, look at Web sites like Bankrate.com or CardWeb.com to get an idea of the best available options.
Get
interested in your checking and savings accounts
Banks
are starting to sweeten the deals they offer on interest-bearing checking accounts and traditional savings accounts, pushed by increased competition from rivals such as EverBank and ING Direct.
But
even if your bank has stepped up what it offers new customers, it probably hasn't tried to make such a deal with you, assuming that inertia will keep you from changing your account.
Again,
start the savings process with your current institution, seeing if they'll offer you better deals based on your account usage. From there, expand to other banks, both local and online.
Be
sure you understand the rules for how the accounts work, including balance requirements, fee structure, and the ease of moving money into and out of the account. When it comes to saving money, there's nothing worse than finding out that your moves have actually cost you more than you've earned.
Chuck
Jaffe is a senior MarketWatch columnist. His work appears in dozens of U.S. newspapers.Back to Your Money: A Closer Look at Consumer Debt |
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