Follow these personal spending tips and watch the savings pile up.
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By Morningstar.com | 03-02-09 | 01:00 PM | Email Article

We often discuss ways to invest money for various goals like college funding, big-ticket purchases, and retirement. But before investors can tackle where to put the money, they need to tackle where to find the money.

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Proper budgeting and cost-cutting can help you free up funds for investment, emergency accounts, or debt-paydown. And today, we've revived our 101 ideas to help you stretch your dollars to the max. If you follow through on them, you'll make significant progress in cutting costs in your day-to-day life.

  1. Watch out for shipping costs when buying via the Internet. Use the Internet to comparison shop, then pick up the item locally.
  2. If you see something in a catalog that you want to buy, wait a week before ordering to see if you still really want it.
  3. Use the public library to check out movies or books for free.
  4. Consider dropping your land line phone at home. Your cell phone may be all you need, and some come with free long distance services.
  5. When traveling, look online before you leave for ideas and/or coupons. Once on site, ask the locals for low-cost  favorite spots.
  6. Try a vacation at home (staycation). See and do the things you've always meant to do and save on hotel costs.
  7. Compare rates for cable and satellite. Go with the less expensive option. Only sign up for the channels you know you'll watch.
  8. Send free e-cards and save on postage.
  9. Consider buying a certified preowned car instead of a new one.
  10. Cut back trips to Starbucks or other premium coffee shops.
  11. Stop buying clothes that are "dry clean only." Learn to iron.
  12. Don't renew subscriptions to publications you don't have time to read.
  13. Don't watch so much TV. You won't see all the ads and be as tempted to buy. Take a walk instead or play with your kids.
  14. Make IRA contributions early in the year to take advantage of additional months of tax deferral.
  15. Lock in a fixed mortgage rate so your interest rate can't increase to a point you can no longer make your house payments.
  16. Only use ATMs where you won't be charged service fees.
  17. Give your time/services instead of "things" for gifts.
  18. Give up expensive health club memberships. Learn to exercise outdoors, at home, or through the park district. Or join the YMCA.
  19. Even though oil costs have abated, choosing a small hybrid car over a similarly priced mid-sized non-hybrid will save you unnecessary pain at the pump. Plus, gas prices will likely tick up again over time. Check out Hybrid Car Guide for more.
  20. Wait a little longer between manicures (try doing one yourself!), massages, or highlights (try a local training school). 
  21. Let your hair go gray. I don't know if hair dyes are linked to cancer or not, but as the baby boomers age, gray is "in."
  22. Play golf less often, look for tee times when rates are reduced, or play at lower-cost public courses.
  23. Pay off your credit cards monthly and avoid paying interest.
  24. If you must charge, switch to a no-fee or low-fee credit card. Go to Bankrate.com to compare rates.
  25. If you own a house, shift your higher-rate credit card debt to a lower-rate line of credit. Deduct the interest on your tax return.
  26. If you own a house, use a home-equity loan to pay off auto loans. The interest is tax-deductible.
  27. Pay your mortgage payment biweekly instead of monthly--you'll save on interest costs and pay off your mortgage sooner.
  28. Pay extra premium payments when paying your mortgage. As above, you'll save interest payments and be able to pay off your mortgage sooner.
  29. If your house down payment was less than 20%, cancel your private mortgage insurance once your mortgage balance is 80% or less of your home's value.
  30. Pay cash when possible--psychologically it's harder to spend cash than using credit cards, and you'll save on interest charges.
  31. Check your credit history. Go to annualcreditreport.com and make sure everything is accurate. Good credit may mean lower interest charges.
  32. If you have a tendency to bounce checks, deduct a "cushion" from your balance. Then if you accidentally let your balance go below zero, you'll hit that cushion instead of paying fees for insufficient funds.
  33. Set up one checking account for regular recurring expenses and another for bigger-ticket items. (Only buy if you've saved enough.)
  34. Participate in company retirement plans to save on taxes. Your taxable income will go down and you'll defer taxes to the future.
  35. Take advantage of your employer match in your 401(k) or other retirement plan.
  36. Don't take a loan from your 401(k) plan--you'll save on double taxation of that repaid interest.
  37. Take advantage of company-sponsored reimbursement plans. If your company sponsors free retirement advice, take advantage of it.
  38. Talk to financial planners at no cost. Look for newspaper money shows or local events where this service may be offered.
  39. Take advantage of free health screenings at work (if offered).
  40. Switch to an HMO from a PPO for health insurance.
  41. If self-employed, consider switching health insurance plans to high-deductible plans to take advantage of HSAs.
  42. Take advantage of medical prescription drug cards.
  43. Get multiple quotes on insurance. It pays to shop around.
  44. Raise the deductible on your homeowner's and car insurance policies.
  45. Increase the waiting period to six months or longer on your long-term care insurance.
  46. Review life insurance premiums. Can the dividends pay the premium instead of purchasing more coverage?
  47. Buy term instead of whole life or universal life insurance.
  48. Check with state or federal government to see if you have money owed to you. To find out more about claims in your state, go to the National Association of Unclaimed Property Administrators' Web site.
  49. If considering moving or retirement, look into places where the cost of living and/or state tax rates are cheaper.
  50. Keep track of your cost basis on investments to save money on taxes when you sell an investment.
  51. If you have a loss on your Roth IRA (the current balance is less than what you contributed), consider taking out the balance and claiming a deduction for the loss on Schedule A of your tax return.
  52. Avoid paying penalties on retirement distributions by waiting until you're over age 59 1/2 to make withdrawals. Start required minimum distributions from traditional IRAs when you're age 70 1/2.
  53. Do a 1035 annuity exchange to a company with lower expenses.
  54. Put investments that generate ordinary income in tax-deferred accounts.
  55. Use tax-exempt bonds in taxable accounts.
  56. Put investments that generate capital gains or dividends (both generally taxed at lower rates than ordinary income) in taxable accounts.
  57. If you've inherited an IRA, understand how to stretch out the tax deferral by taking the correct minimum required distribution.
  58. Pay attention to the expense ratios on mutual funds you buy. 
  59. Consider using exchange-traded funds (ETFs).
  60. Pay attention to mutual fund brokerage fees.
  61. Use prior-year capital-loss carryforwards to net out realized capital gains. You'll pay less tax.
  62. If you have stock options, consider holding the shares after exercise for at least one year. You'll pay capital gains tax on the appreciation when you sell.
  63. Don't get divorced.
  64. Quit smoking.
  65. Save all your change and use it to buy gifts next year.
  66. Go to matinee movies instead of movies at night.
  67. Cook in bulk and freeze.
  68. Turn down your home thermostat a couple degrees in the winter.
  69. Only do full loads of laundry and fill the dishwasher before running it.
  70. Plan parties where everyone brings something.
  71. Bring your lunch to work or scout out the inexpensive places to buy lunch. Look for inexpensive items on the menu, like soup.
  72. Have cocktails at home and then go out; have dessert at home.
  73. Order vegetarian when you're out.
  74. Look up phone numbers in the phone book instead of paying for directory assistance.
  75. Sell stuff you don't need or use anymore on eBay.
  76. Get a roommate and share expenses.
  77. Investigate phone service via the Internet.
  78. Use regular gas instead of premium.
  79. Cut back on eating out.
  80. Be a smart grocery shopper--cut coupons, shop at discount stores, and stock up on sale items. Check out Costco or Sam's Club.
  81. Buy energy-efficient appliances. They're cheaper in the long run.
  82. Get rid of "add on" services with phone, TV, etc.
  83. Shop resale shops or estate sales.
  84. Shop the clearance racks.
  85. Make your own greeting cards on a computer.
  86. Fill prescriptions with the generic form of the drug.
  87. Plan your purchases--avoid impulse buying.
  88. Use public transportation.
  89. Keep up maintenance on cars. It may prevent costly future problems.
  90. Get annual physicals to prevent costly future problems.
  91. Track your spending. If you write it all down, you'll probably spend less. And you'll know exactly where your money goes.
  92. Use your senior discount (if eligible). Go to AARP.org for information about member discounts and services.
  93. Skip paying cab fare now and then. Walk or take the bus.
  94. Wash your car at home and skip the car wash.
  95. Pay bills online. Save postage.
  96. Don't buy mutual funds just before capital gains distributions.
  97. Use a budget--especially for items like gifts.
  98. Trade in your car with high insurance premiums for a car with lower insurance premiums. Go to Bankrate.com for more ideas.
  99. Buy an I-PASS and save on highway tolls (in Illinois).
  100. Sign up for a Upromise credit card. A percentage of your purchases will go into a college savings fund for your children.
  101. Do your own home improvements. Home Depot and Lowe's employees can walk you through what you need to know.
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