Saving big in surprising places can help you work your way out of debt. But how can you cut costs without losing out on products and services you want and need?
On "The Early Show on Saturday Morning," CBS MoneyWatch Contributor Farnoosh Torabi shared how you can save big bucks by trying the following seven alternative buying methods.
1. Order prescription eyeglasses online
Americans spend more than $15 billion a year on eyewear every year. I've spent hundreds of dollars on prescription eyeglasses, myself. But by ordering online you can save a bundle. All you need is your prescription from your eye doctor and you can hop online and place your order. The caveat is that you won't get help from an eye doctor ahead of time to make sure the glasses fit perfectly, but for $7 - you may decide that the savings outweigh the risks. Other web sites worth checking out: 39dollarglasses.com and Optical4Less.com.
Annual Savings: $100 to $200 (if you're getting a new pair each year)
2. Instead of paying for cable, watch cable television on your laptop for $7.99 a month on Hulu or Netflix.
The fact is pay TV subscribers are declining, and according to a new survey by Forrester Research, people now use the Web more than their televisions. And get this: Netflix video streaming comprises more than 20 percent of all Internet traffic during peak web surfing hours, according to tech firm Sandvine.
An extra $75 dollars a month saved from forgoing cable can certainly add up. Saved each month for the next 30 years in a retirement account earning an average eight percent annually, you're looking at close to $100,000 in retirement, all for ditching cable. It's a considerable trade-off. Even if you pay $7.99 for Netflix's unlimited online streaming, you're saving a great deal.
Annual Savings: $800
3. Rent movies through redbox.com since it only charges you by the rental ($1 to $8), not per month.
Many movies are $1 so even if you are renting one a week, you could save close to $50 a year opting for Redbox instead of Netflix streaming.
Annual Savings: $50
4. Spread out your grocery shopping and buy perishables on a need-only basis and the rest of your grocery shopping once a month (as opposed to once a week).
Why? We waste 40 percent of our food every year, according to the USDA. That's partly because we forget to consume what we already have, then let it expire and chuck it out. Or we simply buy more than we need. Avoid both of those scenarios by checking your cabinets for items you already have and making a list of items you need - then make a conscious effort to plan meals around the existing ingredients you have so that items don't go to waste. Buy perishables only when you need them. Shop once a month, as opposed to once a week. The less you shop, the less you will spend.
Annual savings: more than $1,000 a year (figure, $100 a month savings).
These sites aim to do what Expedia and Priceline for travel, but for prescription drugs. To give you a list of bids for the prescription drugs you need so that you can save as much money as possible. BidRx will go so far as to show you where to find the best prices for the generic version of your drug, as well, which as we know generics can save you as much as 50 percent. Just check with your doctor first. So what are the annual savings? An AARP report found that the average annual cost for one brand name medication was about $1,400 in 2009. If you can save 50 percent by finding a generic substitute with competing bids, that's a savings of up to $700 a year.
Annual Savings: $700/year
6. Ditch Your Phone Service.
If you have Internet service, you can plug your landline into a device called an Ooma, which starts at around $250, but the company estimates that the average household will make that money back in eight months by cancelling their landline service. Ooma was recently named the best home phone service by Consumer Reports. How it works: You plug the device into your high-speed Internet connection and then you plug your phone into the Ooma unit. You don't even need a computer. Ooma offers all the normal calling features like caller ID, call waiting, etc., and there's no monthly bill. You just pay roughly $3.50 a month for taxes and fees. International calls cost one penny per minute. Annual Savings: Let's say you're currently paying $50 a month for your landline home phone. The company estimates you will earn back the cost of the Ooma in six months and from there, you'll save $300 in the first year and about $600 every year after that.
Annual Savings: $600/year
7. Apply for a Credit Card with Long Term Rewards
UPromise MasterCard. Get one percent cash back on all purchases, one to 25 percent cash back on online purchases and eight percent cash back on some dining expenses, all towards a UPromise Account, which is a savings account that you can apply towards college-related expenses for yourself, your kids, grandkids, nieces, nephews, etc. You can apply the money towards a high yield savings account, a 529 plan or directly towards college tuition.
Annual savings: Let's say you spend $10,000 a year on the credit card - that's at least $100 a year saved towards college. If you shop exclusively online with UPromise's retailing partners, you could save $250 a year. And if you get family and friends to join UPromise, their spending will also earn cash back towards your savings goals, so the annual savings really are limitless.
Annual Savings: $250/year