Cleaning, Coupons and the Cost of Living

In our family, my husband is the saver. He clips coupons, does most home repairs himself and buys "wrinkle resistant" cotton shirts from LL Bean to save on dry cleaning bills.

As a Certified Financial Planner, Mark is always calculating ways to save a few bucks. And as we all face a serious and long-term economic global downturn, maybe it's time for the rest of us to take some of his advice on the following list of everyday ways to save:

* Don’t buy extended warranty contracts. Most are never used by consumers. Home electronics and appliances usually come with a basic warranty, and if the product is a lemon, it often shows up within the warranty period.
* Avoid shopping as entertainment. Do not shop with big spending friends. They will encourage you to buy things that are too expensive, that you would otherwise be able to pass up.
* Before you buy an expensive discretionary item, wait 24 hours. The urge may pass.
* Sell stuff you don't need or use on eBay.
* Shop resale shops, estate sales, and clearance racks.
* Travel just before or after peak season to get better rates on flights and hotels. Works especially well for empty nesters who can avoid travel during school vacations.
* Don't renew subscriptions to publications you don't have time to read.
* Use the public library to check out movies or books free.
* Re-think expensive health club memberships. Exercise outdoors or at home.
* Wash your car at home and save $10.
* Review phone bills to see if you are paying for services you don’t use. We discovered we were paying $10 a month for extras we didn’t use or want.
* See if you can drop your landline, and just use your mobile phone. Why do we pay for two services that do the same thing?
* Look at your cable TV bill to see if you are paying for channels you don’t watch. It takes time to check this out, but if you discover a way to cut the charge, you enjoy the savings month after month.

Coupons to Cash: Clip Smart to Save More

Shoppers save around $3-billion a year by redeeming coupons. Clipping and organizing coupons is an investment in time and effort. Here are some clipping tips to stretch coupons a little further:
* Plan to spend 15 to 20 minutes clipping Sunday paper coupons with the goal of saving $5 to $10.
* Get a file to organize coupons by product categories. File the earliest expiration coupons in the front of each category. Clear out expired coupons.
* Call company 800 numbers and ask for coupons. Many manufacturers will mail coupons if requested. Coupons are also available online at sites such as http://www.coolsavings.com/.
* Before shopping, go through the file to select coupons for use that day. Plan a menu around coupon items.

Coupon Do’s and Don’ts

* Do stock up when items can be stored and will not spoil. Don’t use coupons to buy multiple packages of high fat or sugar foods. When that stuff is around in large quantities it is eaten more quickly. Bad for health, waistline and budget.
* Do look for coupons that can be used at drug stores, restaurants and other retailers. More outlets are going to this form of promotion.
* Don’t buy an expensive brand just because there is a coupon. A cheaper alternative may be a better buy even with the coupon savings off the high priced product.

Coupon Resources
* For more information on the smart use of coupons, visit a website run by the Promotion Marketing Association Coupon Council http://www.couponmonth.com.
* For information on using coupons to feed the hungry go to http:// www.cutouthunger.org.

Capture the Savings

If you save a few dollars on lunch or ironing your own pants, you are not likely to go to the bank with eight bucks and make a deposit. If you leave the money hanging around in your wallet you will be tempted to spend it on something else. The best way to capture the savings is to make a commitment to save a certain amount extra each month. It could be $100 or $200 or more. Then have that money taken directly from your checking account and invested in a mutual fund. Or, take that much more out of your paycheck and put it in your 401(k). The saving is done upfront automatically, and then you can pan for gold with all these savings tips so you’ll never even miss the cash you added to savings. If you save an extra $200 a month earning a 7 percent rate of return, you’ll build up $14,300 in five years. Keep it up for ten years and you’ll sock away $34,600.

Saving money takes some effort. But look at it as a part-time job that pays you in tax-free dollars.

Driving on Less

While we've been watching the stock market on its wild ride up and down, we've also seen the price of gas fluxuate. Unfortunately, the market has been going down while the cost of gasoline has - until very recently - been going way up.

We live in a big urban area and are lucky to have a commuter train almost on our doorstep. Public transportation is the best antidote to high gas prices...if it's available. But most of us can't give up our cars. So, we need to learn how to cut the cost of transportation as we hit the road.

Here are a few tips for cutting automotive expenses:

* When purchasing a new car, do online research on prices and options. Before buying, check prices with four or five dealers. One may be anxious to make a deal, and you can save hundreds of dollars.
* Unless a car dealer is offering special low rate financing, don’t jump at dealership financing plans. You are buying a financial service (a loan) as well as a car. Shop for both.
* When buying a car consider the total cost, including insurance, gas, and maintenance. For details, check out the “Consumer Reports” new car guide at the public library.
* Trading in a car for a new one every three or four years is very expensive. Keep your car well maintained and drive it for as long as you can. Once car payments are finished, set aside that monthly payment in a savings account.
* Consider buying a certified pre-owned car instead of a new one.
* Be an informed consumer. When trading in a car or buying a used car, look up the “blue book” value of the car.
Have a mechanic check out a used car before you buy it.
* For older cars, consider dropping collision and/or comprehensive insurance coverage altogether. Paying an extra $250 to protect something worth just $1,000 doesn't make sense.
* Some companies offer discounts to drivers who have three or more years without an accident or moving violation. See if you qualify.
* In some cases, an insurance company may offer a multi-policy discount if a consumer purchases both auto and homeowners coverage.
* Ask about discounts for cars equipped with safety features, such as anti-lock brakes, anti-theft devices and automatic seat belts.
* If you stop commuting by car, you may qualify for a low-mileage discount on your auto insurance.
* Before renting a car and paying excessive insurance fees, ask your insurance agent if your auto policy extends to rental cars. Some credit cards also provide car rental insurance coverage, if you use the card for the rental.
* If you have a young driver on your auto insurance policy who is away at school, ask your agent if you can get a reduced premium because your child is away for most of the year.
* Drivers over the age of 50, who tend to be more cautious than younger drivers, may be eligible for reduced rates.
* Use low octane gasoline unless the manufacturer recommends otherwise
* Properly inflated tires give you better gas mileage.
* Driving the speed limit uses less gas.

As for stress management behind the wheel, the next time you're sitting at a red light, instead of feeling annoyed at the delay, be grateful for the pause. Take a big, deep belly breath or two, relax your jaw muscles and let yourself "rest" in the moment.

More Uncertainty Than We Knew!

When we were looking for a title for our financial advice book for Boomers approaching their so-called "retirement" years, we settled on Boomers! Funding Your Future in an Age of Uncertainty. That title turned out to be more prophetic than we could have imagined.

We find ourselves in the midst of an international financial meltdown, the worst since the Great Depression. The sub-prime mortgage disaster is sinking even the largest banks. The government is trying to bail out those banks and get credit moving again. The stock market has been on a daily roller coaster ride, giving us all a stomach ache, especially when we look at all those disastrous 401(k) losses.

We don't have any quick fixes or magic solutions to offer. However, we thought we'd share some of our book with you, beginning today with the chapter we call Living on Less.We hope there's something here that you might find helpful.

Living on Less

“A penny saved is a penny earned.” It is one of Benjamin Franklin’s best-known sayings. It was sage advice, but old Ben gave that tip long before state and federal income taxes and FICA withholding. Depending on your tax situation, you may have to earn $1.35 to have one dollar in take-home pay. If you clip a coupon and save one dollar on a purchase, it has the same effect as going out and earning $1.35. These days, a penny saved beats a penny earned.

This chapter looks at many ways to cut costs and save money, both before and during retirement. Building up a nice cushion of retirement savings is Plan A, but if that falls short, living on less is the cornerstone of Plan B. For the vast majority of Boomers who are still working, trimming expenses can free up cash to boost savings or pay down debt. Once retired, lower living costs can stretch retirement savings further.

Cutting costs can involve minor nips and tucks, like taking your own lunch to work, or a major lifestyle overhaul, such as moving to a lower cost part of the country. Some cost savings may come easily, almost naturally. Many Boomers are finding that material things no longer provide much satisfaction. A generation known for its conspicuous consumption may now be moving toward a more reflective path. We find that the most meaningful times in our lives involve family and friends, and simple activities like hiking, cooking a meal together, or reading a good book.


Here are some Smart Ways to Save Money at home:

* Ask your insurance agent to look for a lower cost homeowner’s policy. It’s a competitive area, but most people just stick with what they have, year after year. If you switch, make sure the new insurer is financially sound.
* Ask how much you can save by increasing the deductible on your homeowner’s policy. You may save 25 percent on your premium by increasing your deductible from $500 to $1,000, according to the Insurance Information Institute.
* You may be able to get a lower homeowner’s insurance premium if you have a security system, a dead bolt lock, and if nobody in the household smokes.
*If you are at least 55 years old and retired, you may qualify for an insurance discount of up to 10 percent at some companies. The risk of burglary drops in homes that are occupied most of the time.
* If you refinance your mortgage, avoid variable rate loans. Why take on that uncertainty? Don’t keep refinancing with 30-year mortgages or you’ll never live mortgage-free. 15-year mortgages have lower interest rates, and allow you to “burn the mortgage” sooner.
* Energy Star appliances cost more up front, but save on energy in the long run. With high energy prices, the payback time is faster. Better for the environment, too.
* Compact fluorescent bulbs (CFLs) create as much light as an incandescent bulb but use one quarter to one sixth as much electricity, and they last 10 to 15 times longer.
* Install a programmable thermostat and set it to follow your family's normal routine. It allows you to adjust the times and temperature setting of your furnace according to a pre-set schedule.
* Arrange for a professional to perform a home energy audit to determine your home's energy efficiency. Use weather-stripping, insulate hot water pipes, and install pre-cut insulation gaskets around electrical switches and outlet plates on exterior walls.
* Have your furnace serviced annually by a qualified contractor to ensure safety and maximum energy efficiency. Change or clean filters on the furnace as needed.

We'll be sharing some more financial survival tips here as well as occastional advice on how to live with the stress that comes along with all of this financial turmoil.

For example, one way to transform feelings of fear or anger is to focus on the positive things in your life. Counting your blessings really helps at times like this. Take a quiet moment to think about just one thing that brings you joy, whether it's time with your life partner, your loyal pet or your children and grandchildren... a great walk with your best friend...spending time on your favorite hobby ...connecting with nature ...or deepening your spiritual practice.

Being mindful of the gifts that we can count on in our life can help balance the worry that financial uncertainty brings.