Save Big E-Book

Elisabeth Leamy

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 494

Veröffentlichungsjahr: 2010

Beschreibung

Good Morning America correspondent and ABC News columnist reveals tips for achieving unbelievable savings

In this battered economy, saving money matters more to consumers than ever before. But most people are tired of hearing about all the small stuff, like skipping their morning latte. They tried that, and it didn't work. Americans want fresh, bold ideas and Save Big: Cut Your Top 5 Costs and Save Thousands has them. In fresh, engaging prose, Elisabeth Leamy shows consumers how to save big on life's most important and costly items. Filled with actionable advice and the insider secrets readers are hungering for, Save Big

• Details how to save a lot of money on a few things rather than merely saving a little on a bunch of small items
• Reveals the keys to saving money and the challenges consumers face
• Educates consumers on how to save thousands on the five things most people spend the most money on: houses, cars, credit, groceries, and healthcare

After the turbulent economic events of the recent past, more and more consumers are focusing on budgeting and creative ways to save money. Save Big can help.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Foreword

Acknowledgements

Introduction

PART I - HOUSES Home of Savings

CHAPTER 1 - Buy a House ASAP

Why You Should Buy

When to Buy

CHAPTER 2 - How Much Should You Spend?

Figuring Out What You Can Afford

A Better Way

Don’t Stretch for a House

CHAPTER 3 - Doing the Deal

Saving Big on Real Estate Agents’ Fees

The All- Important Offer

CHAPTER 4 - Getting a Good Mortgage

Picking the Right Mortgage Product

FHA Loans

Moving Parts of a Mortgage

CHAPTER 5 - Choosing a Mortgage Professional

Get Three Good Faith Estimates

How Mortgage Brokers and Bankers Make Money

How to Compare Good Faith Estimates

CHAPTER 6 - Cut Your Closing Costs

Lender Charges

Title Charges

Government Charges

Going to Closing

CHAPTER 7 - Appeal Your Property Taxes

Look for the Opportunity to SAVE BIG

Understanding Property Taxes

Appealing Your Tax Assessment

Results That Last Years

CHAPTER 8 - When to Refinance

Should You Refinance?

Reduce More Than Just the Rate

CHAPTER 9 - Pay Off Your Mortgage Early

A Guaranteed Gain

Silencing the Naysayers

Where’s the Money Going to Come From?

The Logistics of Prepaying Your Mortgage

CHAPTER 10 - Sell Your House Yourself

It’s the Price, Stupid

Underpricing Your FSBO

Agents Welcome

Negotiating the Deal

If All Else Fails

PART II - CARS The Cheaper Road

CHAPTER 11 - What to Buy

Never Buy a New Car

Always Buy a Used Car

Save Even More: Dark Horse Vehicles

CHAPTER 12 - What Can You Afford?

Cash Is King

Make Loans Short and Sweet

What Can You Afford If You Finance?

Shop for Outside Financing First

CHAPTER 13 - Where to Buy a Car

Getting a Used Car Fast

Getting a Used Car for Less

CHAPTER 14 - Choosing a Reliable Car

Narrowing It Down

The Number One Consumer Myth of All Time

Checking It Out

CHAPTER 15 - Bargaining for the Best Price

Research Pricing

How to Haggle

Closing the Deal

Real Results

CHAPTER 16 - Make Your Car Last

Repair or Replace

Finding a Great Mechanic

The Estimate

Two Ways Not to Pay

Secret Warranties

CHAPTER 17 - Car Insurance for Less

You’d Better Shop Around

Change Your Coverage

Diminished Value

PART III - CREDIT Loans for Less

CHAPTER 18 - Protecting Your Credit Reports

What Is a Credit Report, Really?

Getting Your Credit Report

Lies, Damn Lies

Disputing Errors

Why You Should Fight

Protecting Your File Going Forward

CHAPTER 19 - Understanding Your Credit Score

How Does a Report Become a Score?

How Is Your Credit Score Calculated?

FICO versus Fako Scores

How Do I Get My Score?

Why Does Your Score Matter?

CHAPTER 20 - Raising Your Credit Score

The Fundamentals

Flashy Moves

Hired Help: Rapid Rescoring

The Power of 100 Points

CHAPTER 21 - Cut Credit Card Debt

The Minimum Payment Mess

Old Fashioned Discipline

Newfangled Strategies

PART IV - GROCERIES Guerrilla Grocery Shopping

CHAPTER 22 - Price Matching

How to Price- Match

An Easier Way to Price- Match

Price Matching to the Rescue

How Much Can You Save?

CHAPTER 23 - Stockpiling

Know the Cost

Let Somebody Else Do the Work

Learn to See Sales Coming

Practical Considerations

Stockpile of Savings

CHAPTER 24 - Creative Couponing

Clicking Not Clipping

Coupon Combos

Coupon Combo Coaching

How BIG Are Our SAVINGS?

CHAPTER 25 - Wild Cards

Grocery Buying Clubs

Grocery Auctions

Couch Potato Shopping

PART V - HEALTHCARE Curing High Costs

CHAPTER 26 - Choosing a Health Insurance Plan

Raise Your Deductible

Pay As You Go

If You’ re Uninsured

CHAPTER 27 - Negotiating with Your Doctor

Approaching Your Doctor

Paying the Medicare Rate

Paying the Insurance Company Rate

Ask for a Payment Plan

CHAPTER 28 - Picking Your Prescriptions

What Medications to Take

Where to Get Your Medications

Pharmaceutical Assistance Programs

Medical Tests Are Prescriptions, Too!

CHAPTER 29 - Haggling with Hospitals

Before You Go

While You’ re There

Hospital Billing Errors

Conclusion

Index

Additional Praise for SAVE BIG

“Elisabeth Leamy hits the bull’s-eye for this new era of thinking before you spend. It is easy to say spend less than you make. It is much harder to know how to do that regardless of income. If you follow Elisabeth’s easy steps for how to save on life’s big expenses, you will change your life.”

—Clark Howard, host of the Clark Howard Show;New York Times best-selling author of Get ClarkSmart and Clark’s Big Book of Bargains

“Elisabeth Leamy puts her finger on why so many Americans struggle with money—they’re not thinking big enough! It’s the big expenses, not the lattes, that will swamp your financial plans. In her lively, engaging style, Leamy shows you exactly where and how to cut costs so that your money finally works for you, rather than against you. Using the suggestions in this book will save you thousands of dollars. It’s a great return on your investment.”

—Liz Pulliam Weston, MSN Money columnist; best-selling author of Your Credit Score: Your Money and What’s at Stake

“I’m a lifelong pump-my-chest penny-pincher. I’m a believer in sweating the small stuff to save your way to prosperity. But Elisabeth Leamy’s premise in SAVE BIG won me over. She reminds us all in an engaging way that it’s not just the pennies that count. It’s just as important to find big ways to save.”

—Michelle Singletary, The Washington Post; nationally syndicated “Color of Money” columnist

“SAVE BIG takes a fresh and innovative approach to savings. Elisabeth Leamy focuses on big savings that have a lasting effect on our pocketbooks and our lives. Elisabeth takes on everything from healthcare to home purchasing, with clarity and precision. This book is a must read for people of all ages, no matter your financial knowledge.”

—Mellody Hobson, President, Ariel Investments

“Elisabeth Leamy takes saving to a whole other level. Combining her savvy and seasoned knowledge of the consumer with common sense and a healthy dose of humor, she finds not only big dollar savings but a smarter path to better health. SAVE BIG is good medicine for all of us.”

—Marie Savard, MD, ABC News medical contributor; author of Ask Dr. Marie:Straight Talk and Reassuring Answers toYour Most Private Questions

“Behavioral economists have found that people tend to take mental shortcuts when they make financial decisions—so they end up spending as much time choosing a mortgage as they do a big-screen TV. Elisabeth Leamy’s wise book reminds us that we can save big by investing more time on major purchases—and shows readers step-by-step how to get the best value for their money. This book offers a much-needed road map through the world of ‘gotcha capitalism,’ junk fees, and dynamic pricing.”

—Laura Rowley, Yahoo! Finance columnist; author of Money & Happiness: A Guide to Living the Good Life

Copyright © 2010 by Elisabeth Leamy. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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eISBN : 978-0-470-63898-9

For Kelsea. Mommy can come out of the office now . . .

Foreword

All of us at Good Morning America know that Elisabeth Leamy is the real thing. She is a tireless expert on personal finance and consumer reporting. She identifies what works and what does not. And she wakes up each morning a passionate champion of all consumers.

And now she’s written a book to help all of us tackle and tame the daunting financial problems in daily life: how to cut the cost of favorite groceries in half; why she would never buy a new car; and the best advice on health insurance she ever got (it came from her dad).

Like Eli, the advice is practical. It takes the fear and anxiety out of saving money. We know she practices it in her own life. She even makes it fun to be smart and in control.

All of us at GMA can turn to Eli any day of the week to guide us through our financial and consumer questions.

We are so glad that now our smart and compassionate friend, through her book SAVE BIG, will be your guide, too.

ROBIN ROBERTS AND DIANE SAWYER ABC NEWS NEW YORK, NEW YORK

Acknowledgments

Several people saved me as I was trying to help you SAVE BIG.

First and foremost: Big, warm, mushy thanks to my husband Kris and daughter Kelsea, for their love, support, and patience during the writing process. My parents, Patrick and Jeanne, and mother-in-law, Joan, also played an important part in enabling me to write this book in a short three months.

I am still overwhelmed that my wonderful colleagues Robin Roberts and Diane Sawyer wrote a foreword for SAVE BIG. They are simply the best.

None of this would have happened without agents Henry Reisch, who pushed me to write another book, and Mel Berger, who sealed the deal with the fine folks at Wiley.

Neighbors Roxanne, Kris, and Kyle Haltmeyer fed me, educated me, and even contributed a SAVE BIG story to the book. Neighbor Sam Serebin actually responded to 2:00 A.M. e-mails asking for graphic design advice.

Thanks to Kathy Sullivan, “the most frugal mom in America,” for saying the words that cemented my BIG philosophy.

Jim Murphy of Good Morning America gave me his blessing. David Peterkin was so efficient and encouraging. Ida Astute, Donna Svennevik, Brett Oronzio, and Michelle Cutler made me look glam.

Candy Butcher, Michelle Katz, Todd Mark, Stephanie Nelson, Chrissy Pate, Marie Savard, and Carolyn Warren lent me their expert knowledge.

I was lucky to have Lauren Appelbaum as my thorough, thoughtful researcher just long enough to fill in all the blanks.

And finally, thanks to all the friends and family whose names I borrowed. You know who you are. Or you will, when you read the book!

ELISABETH LEAMY

Introduction

My savings sage—the one who crystallized everything I had ever thought about saving money—was a bleached-blonde mom ever thought about saving money—was a bleached-blonde mom wearing orange mood lipstick and towering, clear plastic high heels. She had this skittish way of laughing after she made an important point. You would think some imposing, paunchy, appropriately graying guy would have been my guru. But no . . .

Good Morning America had dispatched me to the Chicago area for a story about “The Most Frugal Moms in America.” I admit I went with a resigned, well-at- least I’ve-got-this-down-to-a-science kind of dread, expecting an interview about creative ways to reuse cottage cheese containers and old pantyhose.

But then I met this savvy single mom who had paid off her mortgage in five years. Twice. On two different homes. She had even gotten laid off and managed to stay home with her kids for two years—without a job—because she kept her expenses so low.

“How do you do it?” I asked, with awe.

“I try to focus on the big stuff,” she replied.

Then she let out that cute, kooky laugh. But I didn’t really hear it this time because I was having my own little epiphany. Of course! I had never put my philosophy into words before, but there it was. I’ve always preferred to save a lot of money on a few things rather than a little bit of money on a bunch of things. I like to SAVE BIG. Not small.

I’ve never read a book that sees it my way. They all list a litany of what I call Small Stuff Savings on the premise that “every bit counts.” Switch to low flow showerheads, save $5. Inflate your tires properly, save $9. Use your own bank’s ATM, save $3. Pack your lunch, save $7. And the all-time favorite target: Skip your morning latte, save $4.

Brace yourself, now, because my advice is to go for it! Have the latte!

No, the Coffee Council is not paying me off. No, I’m not caffeine-addled. I don’t even drink coffee! The point is, why give up life’s little pleasures and conveniences when you can save money by attacking a few BIG expenses instead? In fact, you can save more money my way. You can SAVE BIG. The key is to identify the areas where you spend the most money, because that’s where you can save the most money.

The five things we spend the most money on are:

1. Houses

2. Cars

3. Credit

4. Groceries

5. Healthcare

I’m going to show you how to save tens of thousands of dollars in these five parts of your financial life. For example, refinance into a shorter mortgage and you can save $103,536. Find out about a secret warranty where the manufacturer fixes your car for free and save $1,200. Raise your credit score just 100 points and save $93,600. Stockpile groceries when they’re on sale instead of when you need them and save $5,772. And pick and choose your prescriptions to save $6,350.

As you can see, I don’t believe in pinching pennies. I like to pinch $1,000 bills! In fact, every tip in this book has the potential to save you at least $1,000. Anything less than that didn’t make the cut. This book contains $1,176,916 worth of savings in all. You would have to deny yourself 294,229 lattes to save that much money!

These savings are possible for anybody who lives somewhere, drives places, charges stuff, eats food, or gets sick sometimes—and wants to do it all for thousands less. In the wake of the tumultuous economic times that began in 2008, there’s renewed interest in saving money. My message is that it doesn’t have to be a drag.

SAVE BIG (not small) and I think you will find that you save something even more precious than money: time. The puny savings ideas other authors tout take a lot of time. They need constant maintenance. They require willpower. In the face of a zillion different daily deprivations, most people fail. I find it much easier to channel my energy into a few BIG cost-savers that I only have to tackle every once in a while.

That’s why most of the savings strategies in this book are things you only have to do every few years. The precise rankings of our top five costs don’t really matter. The point is that they are BIG. In each Part of the book, I add up the BIG SAVINGS I’m about to show, then make a Small Stuff Savings comparison, just like I did with the lattes. You won’t achieve these savings all at once, but each time you try one of my ideas you will SAVE BIG.

But wait! There’s more! I’ve scattered BIG SECRETS throughout the chapters—insider information that will help you keep your money in your wallet. Then I summarize each chapter with my list of BIG TIPS, your action plan to get started saving.

My website, www.ElisabethLeamy.com, is a companion to the book, organized chapter by chapter. Every time you see a website or calculator mentioned in SAVE BIG, you can go to my site and I will link you to the precise page that you need, so you don’t have to hunt for it. I’ve also included recommended reading and other resources on my site.

You can read this book cover to cover and become one super saver. Or read the house, car, credit, grocery, and healthcare sections when you need them as you go about your life. Each Part of SAVE BIG is broken down into bite-size chapters that you can get through in the time it takes . . . to enjoy your latte. Remember, you’ve got 294,229 lattes to look forward to, because I show you how to save $1,176,916 in the pages of SAVE BIG!

PART I

HOUSES Home of Savings

If you want to SAVE BIG, you have to figure out the areas where you spend the most money, because that’s where you can save the most money. You might be sitting inside your number one expense right now: your home. According to the Bureau of Labor Statistics, we spend an average of $19,199 on our homes every year and those costs eat up 39 percent of our incomes.

I’ll tell you right now that the way to cut those costs is not to install low-flow shower heads, yet that’s one of the most common tips for saving money around the house. If you do it to save the environment, fine. But to save money? Please. That’s Small Stuff Savings: five dollars a month at most. Peanuts. Pennies. Pathetic.

Instead, you can turn your number one expense into your number one savings. I will prove it in the coming pages. I’m going to show you how to attack the dumb, dull expenses that come with every home. The House section of this book contains $781,877 worth of BIG SAVINGS! You would have to install low-flow showerheads in 200 houses and bathe for 65 years to save that much money!

Homes can be pigs that gobble up massive, messy chunks of our paychecks. But they can also be piggy banks where we stash a little cash for later in life.

Amazed that you can save that much on your house? It makes sense because what other undertaking has so many side costs associated with it that are in the thousands of dollars? Homes can be pigs that gobble up massive, messy chunks of our paychecks. But they can also be piggy banks where we stash a little cash for later in life. I can help you keep your home from being a hog.

Chapters in Part I are arranged chronologically, in the order you are most likely to encounter these adventures on the journey of home ownership, from buying a home to maintaining it and then selling it again and starting over.

• Chapter 1: In the opening chapters we tackle buying a home. I lay out why you should buy a house ASAP because spending money on this giant purchase is actually your number one way to save money.

• Chapter 2: Here I argue that your mortgage payment should equal your rent as part of my painless plan for affording a house and paying it off early to SAVE BIG. We talk about why you should stoop—not stretch—for a house.

• Chapter 3: In this chapter, it’s time to make an offer. By negotiating with your realtor before she negotiates for your house, you can SAVE BIG. When it is time to negotiate, I tell you how to do the deal in a way that saves you thousands.

• Chapter 4: These next chapters are about mortgages. Choosing the right loan might be even more important than choosing the right house because it can save you $100,000 or more! We go over the pros and cons of the different types.

• Chapter 5: Next up, choosing a mortgage professional. I’ll teach you the tricks bankers and brokers use to make money off of you and how to beat them at their own game and get a fair deal.

• Chapter 6: Then we conquer closing costs, the fees you pay in order to complete your loan. Fight junk fees and you can save another couple thousand dollars.

• Chapter 7: Once you are in the home, there are more ways to save. Have you ever thought of fighting your property tax assessment? Only 2 percent of people do and it’s a way to SAVE BIG.

• Chapter 8: Refinancing is one of the truly unique opportunities to cut costs, but how do you know if the time is right? My simple Rule of 5s will help you decide.

• Chapter 9: Pay your mortgage off early and you can cut thousands of dollars and several years off of your loan. I’ll show you where to find free money to do this.

• Chapter 10: Finally, when it’s time to move on, consider selling your house yourself without an agent. Do this with even one of the homes you will own in your lifetime and you will SAVE BIG.

Ready to learn how to save $781,877? If you do that, it really will be a home sweet home. Let’s get started.

CHAPTER 1

Buy a House ASAP

You should buy a house as soon as possible, because it’s the one investment you can make with money you have to spend anyone investment you can make with money you have to spend anyway. After all, you have to pay money to live somewhere. If you currently rent, it’s your biggest expense, but you can make that money serve two purposes by buying a place instead. You get a nest and a nest egg. By contrast, you can’t sleep in a stock, and bonds don’t keep you warm in the winter. Besides, many people can’t afford to pay their rent and buy stocks and bonds, and others aren’t disciplined enough to be reliable investors.

According to the Federal Reserve, the median net worth of homeowners is $234,000, while for renters it’s $5,100. Buying a house is a forced savings plan where you can shelter your money and shelter your family. Go for it and you will SAVE BIG.

In this chapter, learn to SAVE BIG by:

• Making your housing payment serve two purposes: shelter and savings.

• Buying a house using somebody else’s money—but keeping any gains.

• Locking in a monthly payment instead of paying increased rent every year.

• Making money tax- free in the form of real estate appreciation.

Why You Should Buy

In the post-housing bubble years, it’s fashionable for naysayers to contend that houses are not good investments and that you should rent instead. They say that real estate doesn’t appreciate as fast as the stock market. They babble that it’s not a good idea to put all your eggs in one investment basket. They moan that houses are not liquid investments, so your money is stuck.