For several years, American consumers’ finances have been squeezed by surging housing costs, climbing grocery bills, and costs for insurance, utilities and child care that have increased faster than wages. Since 1976, Consumers’ Checkbook’s research has found that most families spend more than necessary, often because marketplaces are designed to make overpaying easy and comparison shopping hard. Ready to make some changes and start saving? Here are 20 ways to do it.
Buy less stuff. Retailers and brands spend billions of dollars conditioning American consumers to spring for the latest, most hyped products. The dopamine hit from a new purchase is real but short-lived, and it leaves many in long-term debt. Before clicking “buy” or heading to the mall, ask yourself (or family): “Do I actually need this?” Waiting a day or two often provides clarity.
Shop around for the best price, and don’t get fooled by fake sales. Over the last 50 years our researchers have collected more than a million prices from every sort of home service and retailer. We nearly always find enormous differences for the exact same work or product. And don’t let a “sale” price short-circuit your comparison shopping. Last year, Checkbook’s researchers spent six months tracking prices at 25 major retailers and found that 21 advertised “sale” prices more than half the time — meaning the “discount” is usually just the regular price.
Buy used or get it free. For furniture, kids’ gear, tools, bikes, sports equipment, books and clothing, used is usually good enough and often costs far less. Try Facebook Marketplace, Craigslist, eBay and thrift stores, but don’t overlook gifting networks like the Buy Nothing Project and Freecycle.org.
Avoid purchases that sound sensible but aren’t. That includes extended warranties for appliances and electronics, air-duct cleaning, home warranties, credit-monitoring services and vehicle-service contracts. Checkbook’s research has identified dozens of products, services, and add-ons widely marketed as smart buys that are almost always bad deals.
Don’t upgrade your phone until you must. Skipping even one upgrade cycle saves you hundreds and lets you avoid trading in a perfectly good device at a fraction of its value.
Keep your car longer. The average new car now sells for more than $50,000. More than 1 in 5 new car loans in recent years have been for 84 months or longer. A longer loan means paying far more interest and staying underwater — owing more than the car is worth — for years. Every year you drive a paid-off car is thousands of dollars saved on payments, depreciation and insurance.
Try to pay bills on time, stay out of high-interest debt and seek help if you need it. A growing number of Americans are finding it difficult to pay their bills. Nearly half of all credit-card holders carry balances from month to month, with many paying more than 25 percent interest.
“Debt is no longer a background concern, but a daily struggle for many families,” said Bruce McClary, a vice president at the nonprofit National Foundation for Credit Counseling. “People are having to make some really tough decisions: Should they buy certain types of groceries or get their medication? Should they pay one bill on time and let another one slide?”
Digging out from credit card debt might seem impossible. But with hard work, discipline and guidance from a certified credit counselor, it can be done. To find a counselor, visit NFCC.org or call 800-388-2227.
Avoid for-profit “debt relief” and “debt settlement” companies, which often leave clients’ finances worse off.
If you carry credit card balances, the card you use matters a lot. Airline-miles cards, hotel cards and other rewards cards typically carry interest rates of 25 to 30 percent. If you’re not paying your balance in full every month, the interest charges will be far more expensive than the value of any points you earn.
If you have high-interest credit card debt, a personal loan from a bank or credit union may be a better deal. Consolidating a $10,000 credit card balance into a personal loan at 10 percent interest will save you hundreds of dollars each year and give you a reasonable payoff date.
Shop around every year or two for car and home insurance. Our research shows that most policyholders can save more than $500 a year by switching to a lower-priced auto and/or home insurance company; some save $1,500 or more.
Choose your health insurance plan carefully each year. Most people stick with the same plan year after year. That can be costly. During your next open-enrollment period, do an audit of your needs and choices. The goal is to match what you’re paying for with what you use. The savings can be significant.
Maximize your employer benefits. FSAs, HSAs, 401(k) matching, free counseling through EAPs, tuition reimbursement, legal plans … most employees leave lots of money on the table every year by not paying close attention during open enrollment. A 401(k) match alone, if you’re not capturing it fully, is leaving money behind.
Shop around for prescription drugs. Drug prices vary wildly among pharmacies, sometimes by a factor of 10 or more for the same medication. Paying out of pocket with a discount service like GoodRx or Cost Plus Drugs can be significantly cheaper than your insurance co-pay. Also, always ask your doctor whether a generic is available and suitable for you.
Take care of your health. The best way to reduce health care costs? Take preventive measures: Annual physicals, well-woman visits, mammograms, flu shots, colonoscopies. Most health insurance plans minimize out-of-pocket costs for these types of services. To save even more, select in-network providers and double-check your medical bills for errors.
Switch to a lower-cost grocery store. Food prices continue to soar, but our evaluations of grocery store prices find that most shoppers can save by taking advantage of low-cost supermarket options. Compared to most conventional chains, Aldi, Lidl, Walmart and Wegmans offer big savings: For a family that spends $300 per week at the supermarket, a 15 percent price difference totals savings of $2,340 per year.
Cook more, and break up with delivery services. Cooking simple meals at home a few more times a week can save a typical household $150 to $200 a month compared with restaurant meal costs. When you get takeout, pick up your own food; delivery apps are brutally expensive once you add fees, tips and menu markups.
Get multiple bids on home repairs and improvements. Checkbook’s research shows the price you pay has almost nothing to do with the quality of work. For any significant job, get at least three to five fixed-price bids, and be especially wary of companies that pressure you to sign the same day.
Audit your subscriptions. The average American now spends more than $1,000 a year on subscriptions. Most households pay for several things they’ve forgotten about. Set aside 30 minutes, go through your credit card and bank statements, and ax anything you haven’t actively used in the past month.
Use your library. Most people pay for services they can get free with their library card: Books and audiobooks through the Libby app, streaming movies through Kanopy, logins for paywalled websites and discounts on museum passes. Before paying for a streaming service, an audiobook subscription or a digital magazine, check what your library offers.
Take advantage of free government and nonprofit resources. Many local governments offer programs residents don’t know about: Recreation centers, youth sports leagues, and in some areas, subsidized broadband. Free tax preparation is available to many Americans through IRS Free File and VITA sites.
Don’t get scammed. American consumers lose tens of billions of dollars to fraud every year. Never send money via wire transfer or gift cards in response to an urgent request, no matter how convincing the story. Never give remote access to your computer or phone. Verify any urgent financial request — even one that appears to come from a family member — by calling them back on a number you already have. Get free monitoring on your credit reports at AnnualCreditReport.com and place a free security freeze on your accounts with Equifax, Experian and TransUnion to prevent new accounts from being opened in your name.
Kevin Brasler is executive editor of Washington Consumers’ Checkbook and Checkbook.org, a nonprofit organization with a mission to help consumers get the best service and lowest prices. It is supported by consumers and takes no money from the service providers it evaluates. Until Oct. 15, Washington Post readers can access all of Checkbook’s advice and ratings free of charge at Checkbook.org/WashingtonPost/save.
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