7 Ways to Save $200 a Month
Looking for a little extra cash to build your rainy day fund, boost a college savings account or save up for a vacation? With a few adjustments to your monthly expenses, you can save up to $200 with just one hour of your time -- no major sacrifices required.
Home Is Where the Savings Are
The average U.S. homeowner's policy costs $764 a year, according to the National Association of Insurance Commissioners (NAIC). By raising your deductible to $1,000, you can save 25 percent on your premium, according to the Insurance Information Institute. Also shop around -- go to naic.org and click on "states and jurisdictions" and find your state. Some states offer surveys comparing premiums; also check out insweb.com or insurance.com.
Get in the Driver's Seat
The average cost for car insurance in the U.S. was about $847 in 2007, according to the Insurance Information Institute. "It is important to shop around, of course, but sometimes you can just go back and change your policy and save quite a bit of money," says Philip Reed, senior consumer advice editor Edmunds.com, the automotive website.
For example, raising your deductible to $1,000 can save 40 percent -- or about $340 per vehicle. "As your car gets older, it's better to shoulder the expense yourself for a lot of the inexpensive repairs than to pay higher premiums for years," says Reed. "Eventually you can also cancel the collision coverage (because) it gets to a point where it costs more to fix the car than (it's worth)."
Also, make sure you're getting all of the discounts you can. For example, a spotless driving record, good credit score, membership in a group such as AAA, "combination" deals for using the same insurer for your auto and home, and safety features such as anti-lock brakes, side-impact air bags or anti-theft features all may qualify. If you have a teen driver who excels in school, ask for the "good student" discount, as well as the reduction for a college student who lives more than 100 miles away.
If you don't spend loads of time behind the wheel, look for potential savings from insurers such as Progressive, which is moving toward offering better rates for people who drive fewer miles.
The average American household spends $2,000 a year on energy -- and half of that is spent on heating and cooling, according to the Environmental Protection Agency's Energy Star program. Install a programmable thermostat (about $30) and set it to automatically turn the temperature down in the winter and up in the summer when you're asleep or at work. It will cut your bill by 25 percent. You can boost your savings even more by setting your water heater at 120 degrees.
"Dry Clean Only" ... Says Who?
Most fabrics are washable using the delicate cycle and cold water, says Lindsey Wieber, co-founder of The Laundress, a collection of specialty fabric care products. "Don't get scared by 'dry clean only' -- wool, cashmere, silk, rayon, polyester and spandex can all be laundered," Wieber says. "Manufacturers will always put the label on because it protects them if for some reason you wash and shrink it." Assuming you spend just $20 a month on dry cleaning, you could save $240 a year.
Lay wool and cashmere flat to dry; everything else, including cotton and linen, can be thrown in the dryer on a low-heat setting, then pressed. (Time starved? Send the garments out to be pressed -- it's still cheaper than dry-cleaning.)
As for suits, hang them immediately and air out after wearing; dry clean just two to four times a season. It's actually better to spot clean stains with a lint-free cloth. "Dry cleaning can set in stains further, and does not remove odor from a suit," Wieber says. (For even greater savings, skip the dryer and use a laundry line; it saves an average of $100 a year, according to laundrylist.org.)
Invest in Date Night
When my kids were younger, my neighbor and I set up a once-a-month exchange on a Friday/Saturday between 9 p.m. and midnight. It allowed us to enjoy a night out with our respective spouses with no babysitting costs. (The kids had to be in bed before the other mom arrived.) Savings: About $30 a month or $360 a year.
Let Your Boss Help Pay Your Bills
If your employer offers a flexible spending account for healthcare and child care costs, head over to human resources and sign up. Money is taken out of your paycheck before taxes and deposited in the FSA, which then reimburses you for medical or qualifying child care expenses. Let's say you have $50 a month (or $600 a year) in out-of-pocket expenses -- doctor and dentist co-pays, prescriptions, over-the-counter drugs, eyeglasses, orthodontia or private pre-school. The actual cost for someone using an FSA would be $404, assuming she is in the 25 percent tax bracket and pays FICA taxes of 7.65 percent. (The savings is even greater if you also pay state taxes.)
Surf Before You Pump
Before hitting the pumps, visit Gaspricewatch.com or Gasbuddy.com, websites for the lowest reported gas prices in your area. I recently surfed several zip codes around the U.S. and found a difference of 15 to 20 cents a gallon between the lowest and highest prices. If you have two drivers in your household, you'll save $150 to $200 a year (the average American uses 500 gallons of gasoline a year, according to the Energy Department). On the road? You can get a widget for either your internet-enabled mobile phone or GPS, or connect to gasbuddytogo.com -- so you'll always know where to find the best deal.