With the economy in a slump, everyone is looking to cut costs. The new year is a good time to make moves that could save you thousands in 2009. Stephanie AuWerter, contributing editor for SmartMoney.com, offers five tips.
First, slash your grocery bills. Embrace generic brands. They've come a long way and can easily shave 20% off your grocery bill. And watch for sales. Most items in the store go on sale once every 10 to 12 weeks. So when you see a deal, load up on it, since you probably won't see it again for 3 months or so.
It's also a good time to cut insurance costs. It's worth remembering that insurance is meant to help you out during a catastrophe, not during an inconvenience. And filing small claims is likely to raise your premiums. So to cut costs, consider raising your deductible on your home or auto insurance. Raising your homeowners' insurance deductible from $250 to $1,000, for example, and you could cut your premiums by 25%.
Look into reducing your home heating costs. Installing a programmable thermostat shouldn't set you back more than $150 bucks or so. But using one to cool down your house by just one degree when you aren't home or when you are sleeping can shave as much as 5% off your monthly bill. Also, shelling out a few bucks on caulk or weather stripping more than pays for itself. A well-sealed home is up to 20% more energy-efficient, according to the EPA.
Also, now is the time to dine out for cheap. A lot of folks try to cut their costs by skipping meals out. But that can be a tough sacrifice to make. A web site worth checking out is DinnerBroker.com. It allows you to make reservations online and in many cases, by using the site you'll get a 20% discount automatically on your meal. Granted, it may mean that you're not dining at Saturday night at 7:00, but if you can be a little bit flexible, it's a great way to save.
And finally consider refinancing your mortgage. Mortgage rates have been plummeting. They're the lowest we've seen in nearly four decades. Right now the 30 year fixed is around 5.1%. So crunch the numbers to see if refinancing makes sense. It could save you thousands of dollars in interest payments. Also, a lot of folks out there are still in adjustable rate mortgages. If you can afford the switch now, and if you can qualify, do it!
by Stephanie AuWerter and Jenn Eaker
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