Cheap Tips

Cinema Movies: How to Get Them for Free

Who likes forking over $10 for a movie. The only thing worse than that is paying $20 for you and a date plus another $30 in concessions that will make you feel like jogging for the rest of the week. But you don't have to pay for a movie if you live in certain major cities. Nearly all movies go througha screening process where the movie studios rent out a theater and give away tickets for free so that they can gauge audience reaction. In places like Los Angeles, New York and Chicago, it's hard not to get approached for screenings anytime you go to certain movie theaters, albeit for lesser movies. It also doesn't take long if you have a good group of friends before one of them sends you a forwarded email with an offer of screening tickets. The person sending the email has one objective: fill the theater. For good movies though, you have to act quickly, but if you setup a relationship, you'll be watching at least a movie a month for free.

A couple ways to increase your chances to get invited to screenings:

Get to know somebody in the movie business and ask them
Start writing film reviews on a blog, screenings are created to get reviews out ahead of the release date in addition to gauging audience reaction
Check the entertainment sections of relevant newspapers to see ads for screenings
Check out FilmMetro.com they have free screenings listed by city although don't expect to see Avatar or Transformers this way.

Like anything in life, if you focus on it, there's a really good chance that it will happen. And at $10 a ticket or more, you've got plenty of reasons to make it happen.

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A Way to Maximize Financial Aid

If you are about to send your kids to college, the cost will probably be more than a little shocking. One way to maximize your financial aid if you have substantial assets is to dramatically reduce your debt in the years leading up to college. A maximum of 5.64% of parental assets are expected as a contribution to education, so reducing those assets by paying down debt can make a huge difference. Normally, you have 3 major categories of debt: credit cards, auto loans, and a mortgage on your home. The first two categories should be paid off before the base year prior to college (to be safe, two years before they start). No credit is given for credit cards or auto loans so paying these down to zero with your available cash will increase your eligibility. For your home, if you have substantial assets whereby you can pay off your mortgage and still have additional cash, it likely makes sense to eliminate the debt. There's no better feeling than burning your mortgage anyway. Setup a line of credit ahead of time if you need the cash flexibility once they enter school. From your debt free position, you will maximize your financial aid package and still be able to shoulder the burden of higher education.

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College: Make Sure your Kids Pay Their Share

Cut Your Utility Costs By Smartly Planning a Vacation

Most utilities have penalty rates for exceeding certain thresholds of usage. They can hit you twice : once for an increased transmission charge that is dependent on your usage and then with a penalty rate for the electricity or water used. For instance due to a water shortage in the West, many utilities will charge 3 times as much for water once a threshold is reached. Typically, these thresholds are most often exceeded in the months of July and August where they can tack on $100 or $200 to a utility bill. However, if you plan your summer vacation at the end of one of these periods you can often bring usage to near zero for a week or even ten days. That "shut down" can save you a bundle since it all would have been at the penalty rate. While your grass may need water sorely when you get back, the extra usage will likely get charged at normal rates since the following periods have cooler weather. In addition, your use of air conditioning will plummet during the peak season week and your house, void of its normal inhabitants, will get by just fine. The extra $100 plus that you save can cover the cost of a nice meal on your vacation.

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Rent a Small Car at a Low Rate

When you make a reservation, rent a car that is smaller. Half the time, they won’t have the car in stock as many renters are gas conscious, and they will try to get you to upgrade to a larger size. Pass on the offer and you’ll likely get a midsize anyway and if you don’t, you’ll save on the gas.

More information on how to save on rental cars

The Only Time to Pay Your Mortgage Before Its Due

Normally if you want to maximize the interest on your money, you should take advantage of the 15 day grace period that most lenders give. But at the end of the year, you should think about making your January 1st mortgage payment on December 31st. If you are itemizing your taxes, you'll be able to deduct the interest on that 13th payment and save yourself some money on the current year's taxes.

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7 Tips to Reduce Food Spoilage

Warehouse club stores and bulk deals are great but don't forget to factor in how much spoilage you have when buy large quantities of items. Spoilage rates can be as much as 15% in some households and as high as 50% for fresh fruits and vegetables. Who hasn't had that big container of plain yogurt that somehow made it to the back of the refrigerator without ever being opened only to be discovered 3 months later? To reduce food spoilage and save as much as $25 to $50 a month, try these handy tips:

Make sure you clean out your refrigerator once a week
Right size your meals if you aren't good at keeping track of your leftovers
Keep a list or calendar of leftover meals if you make these
Resist the urge to buy super size packages if you don't tend to finish them
Plan your shopping around the meals that you intend to cook, then cook them
Eat out less, you'll finish more of the food you have
Keep your refrigerator 38 degrees or below

The last tip reminds us that sometimes when we try to save money (in this case by turning up the refrigerator to a warmer temperature), it often costs us more than the savings we get.

Mortgages: When to Pay Points

People often get confused over the issue of paying points on mortgages when in fact it is a fairly simple decision. Many people also believe incorrectly that zero point mortgages are best because you don't have to pay anything up front. What they are missing is that the rate that they are being charged on their mortgage is higher because of the lack of points. For a fixed rate mortgage, there are only a few factors that you need to make the decision: length of time expected to be in the home, interest rate, and the points.

Honestly, if any of you are thinking of buying a house and staying in it for less than 5 years, don't buy the house because you will end up with a much bigger problem than not getting the value of your points.

The simple rule is that if the difference in points divided by the difference in your interest rates is 3 or less, pay the points. What this means is that for ever dollar you pay in points it will take you 3 or fewer years to get your money back. Not a bad deal considering that you may hold the loan for 30 years! So for instance, let's say that you have a loan with a 5% interest rate and zero points or one with 4.5% and 1 point. The difference in interest rates is 0.5% and the difference in points is 1% giving you a ratio of 2. After 2 years, you will have broken even on your "investment" and after that, you are saving money. Each year you are saving 0.5%, so it takes two years. Lenders reward you for putting more money upfront because it lowers the probability that you will refinance the loan. Another benefit of points is their tax deductibility when you buy the home, a time when you need as many breaks as possible.

When might you pay more? If you are able to get a very, very low interest rate that you are almost certain you will never refinance and you really have your dream house. At that point, you might even go out to a break-even of 5 years. Realistically, let's assume that you could get a 4% interest rate on your dream house. What is the probability that you would ever get to refinance that? Likely pretty low since you would need to see a rate of 3.5% or less for it to make any sense and you would likely need to pay points.

When might you pay no points even with a ratio of 3? First, if you have no extra cash, it is pretty simple. Also, if the loan you have has a very high interest rate that you are likely to refinance in the near future. But be careful before you ever agree to a high rate. Declining property values make refinancing very difficult. If your rate is too high, you might just skip the purchase altogether until you can get your finances in order to get the best rates.

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Healthcare: Young? Skip the 80%+ PPO

With all the talk about healthcare, few people discuss about one shocking phenomenon that defies all logic. Young, single people who are healthy often opt for expensive PPOs with 80-90% coverage. They want the security of coverage "in case something happens". But the financial metrics for young people hardly justify the additional cost of premiums. In fact many times the difference in premiums is more than the maximum deductible. Young people who seldom go to the doctor would benefit far more from taking high deductible programs and banking the difference in premiums into a Health Savings Account. If something truly catastrophic happens after a few years, they are likely to have a health war chest that could easily pay for the maximum deductible. And of course if nothing happens which is statistically far more likely, you may have $10,000 or more to help you later in life.

Of course, some employees opt for the more expensive plans because their employer picks up the tab or at least most of it. But with more employers shifting the burden to employees, young people should consider lower cost high deductible programs.

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Free Shipping: Don't Be Alarmed on the Dates

Free shipping sounds like a great deal but once you've gone to the checkout, you might be shocked at the estimated shipping dates. Often they will indicate that your merchandise won't be shipping for 7 to 10 days! Not cheap. So you opt to spend the extra $10 on regular shipping or $15 or more for expedited shipping. Don't be fooled, you are falling to a marketing trick that some online retailers love to use. They want you to believe that they are going to wait that long to ship your products so that you pay more for your order. In reality most of the items ship far faster than they are telling you.

Some of the known offenders? Amazon.com, Vista Print, and Shutterfly...but of course, there are many more. Take a recent Holiday Amazon order placed on a Sunday night. The estimated shipping date was a full 5 days with Free Super Saver Shipping. However, 9 hours after the order was placed, the items shipped! We've had similar experiences with VistaPrint where they indicated up to 14 days to receive business cards. 5 days later, the cards arrived.

So don't be fooled by the ridiculously long estimated times to ship your purchases, it's just another gimmick to get more money out of you.

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Groceries: Pay Attention to Unit Costs

If you are heading to the grocery store, you better bring your calculator or a magnifying glass. Why? Well, its getting tougher to figure out who offers the best deal at grocery stores. It used to be that the larger the size you bought, the cheaper the unit cost. A simple example of volume discount. But lately, stores have been getting creative with their pricing. They will often put a smaller size on sale that will give it a lower price per unit than the jumbo size. In addition, it is harder to compare different food items because of shrinking package sizes for some brands. But the only things that matters is the unit price, typically expressed in price per ounce. However, sometimes that is even tough because the store will list on product in the price per quart and another in price per ounce. It's up to you to make the conversion. The basic information below should cover 99% of all the conversions:

1 pint = 16 ounces
1 quart = 32 ounces
1/2 gallon = 64 ounces
1 gallon = 128 ounces
1 liter = 33.8 ounces
1 gallon = 3.79 liters

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How to Shop at Costco Without Paying Membership

Want to get some great deals at Costco, but don't want to pay the $50 membership? Here's an easy way of doing it. Find anyone that you know that is a member and give them whatever amount you want to spend, say $250, and have them buy you a gift card. They can do this in the store or they can do it online. The trick is that once you have a gift card, you don't need a membership to get into the store. Your gift card is your pass.

This is also a great way to test out a Costco membership. And of course, if you want to go more often, check out our tip on Splitting Costco.

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Costco: Split the Membership, Split the Food, Split the Gas

Many people love shopping at Costco, but the cost of the membership can be prohibitive for some. In addition, the sizes are just far too large for many families to use before food spoilage becomes an issue.

A great way of saving even more money at Costco is splitting everything. First start with your transportation. If you or a friend or family member has a minivan or other large vehicle, go together in one vehicle. You'll save on gas. By going together, you'll also only need one membership so it will only cost $25 each. Costco officially prohibits people not at the same address from sharing the two cards (although many people do it) but there is nothing that prohibits two people shopping together on one account. But the real savings kick in when you split those mega packs. Many times you won't even consider one of those monsters because its just too large. 24 croissants? A dozen each family might work. Twin packs of 48 ounce ketchup, perfect for splitting. A case of canned vegetables? You get the idea.

If you spend enough between both families, you might even want to sign up for the Executive Membership which gives 2% cash back. If combined you spend a $100 a week on average at Costco, the membership would pay for itself and if it doesn't, you can always ask for a refund of the $50 by telling customer service before expiration that it wasn't worth it.

There's one last benefit to using the buddy system at Costco, you'll have someone to tell you when its time to stop overfilling your cart.

How much does this save you? If you go every other week to Costco and it is 10 miles away, you'll save about $50 a year each in gas. And of course, you can get gas their a little cheaper too. You'll save the $25 for membership and if you spend the $100 a week, you'll save $50 with the Executive Membership. Splitting the food to avoid spoilage is tough to calculate, but considering that spoilage accounts for up to 10% of groceries, you may save a couple hundred more.

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A Holiday Gift that Saves You Money

Get your kid a Nintendo DSi for a gift and no matter how good of a deal you snared, it will cost you a bundle in the long run. With games costing $30, that $10 that you saved on Amazon.com will be dwarfed when your child builds an extensive collection. And you'll probably spend a few minutes every day trying to pry the little game console out of their hands.

If you want a cheap gift this Christmas, go old school and get them a board game. It might seem lame upfront but we guarantee that your children will end up remembering more of the times they played it then what level they got to in Lego Batman DS game.

And board games save you money twice. First, they are really cheap pricewise and second, they get the family together for continual cheap entertainment. Your gift will pay for itself many times over as you avoid the $60 bill for the family to go to the movies. Get your own bag of popcorn and enjoy a fun night at home.

But what to get them. Start with Monopoly. What better game to teach kids how to save money, invest in real estate, and conquer the world. Or maybe you want to build railroads instead, try Ticket to Ride, one of the highest ranked board games out there. Looking for something just as fun, but under $10, try a card game like Five Crowns

Most board games will cost you $35 or less and if your kids learn to play them well, it won't be long before they are asking you to play again so that they can beat you one more time.

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How to Get Snow Removed Cheaply

It's that time of year again when the snow starts piling up from coast to coast. Unless you are lucky enough to live in the Southern extremes of our nation, snow removal is going to cost you something this year. It may not be cold hard cash, but your back might suffer if you do it yourself. Sure, you can go out and plunk down $600 on a snowblower, but if you only use it four times a year, you are paying way too much and you will hate it sitting in your garage the rest of the year. What can you do?

Well, if you have kids, preferably over 9 years old, you have your own free labor. No kids? Talk to some of your neighbors about hiring their child. Hey, we are in one deep Recession and your neighbor Sally might be a lot more keen on her teenage son pulling in $15 so that she isn't getting hit up for movie money. Now her son probably has to shovel his own driveway too, but cut a deal with Sally or with her son that your driveway will get done right afterwards. If you have a 35 foot driveway, it shouldn't take longer than 60 to 90 minutes for a strapping lad depending on the snowfall amount. And the benefit over using a snow plow is the damage to your driveway will likely be minimal.

Sure, you can hire it out, but this way your giving a kid a job and a good lesson in hard work and you'll likely save money compared to having a professional do it. A good tip to make it go faster is to buy good shovels that are well constructed. If you have a small enough driveway in an area that doesn't get more than a few inches, you can get a decent light duty Toro Power Shovel that a teenager could safely operate for $99.

How much to pay? Well, that's highly dependent on where you live and how much snow there is, but rates range from $5 for a small driveway with a couple inches to $20 for heavier wet snow. It's a buyer's market, but don't take too much advantage of it.

Got Kids? Do This to Save on Clothing

Kids grow at a amazing rates when they are young. Buy a nice pair of pink sweatpants when your little girl is four and before you know it, she hits a growth spurt and looks like she's ready for the great flood. And if your next one is little Tommy, that investment in those cute sweatpants will have lasted you a season unless you want to test his manliness early in life. Sure, maybe you will just luck out and birth 3 straight kids of the same sex, but the odds aren't on your side.

What can you do to stretch your clothing dollars? Buy clothing in colors and styles that work for both sexes. So forget your pinks and purples and skip the NASCAR, WWE, or Transformers branded stuff. Stick with basic colors that both girls and boys will be happy wearing and you'll save a ton. When it comes to socks, do yourself a favor and get white ones for your kids. Unless you want to have a garbage bag full of unmatched socks in short order, white is your choice. Kids lose everything, but socks can disappear at a rate of one a week.

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For more Cheap Fashion Tips, Read The Cheapster's Elegant Wardrobe

Groceries: Stock up on Cereal

Cereal is a great staple for many households. Because of the varieties of flavors and ingredients, it can be a quick breakfast or snack when you have little time. There are also good varieties of healthy cereals with whole grains and low sugar amounts. But cereal has huge price fluctuations and can be downright expensive or ridiculously cheap. Take for instance Vons this week, which is offering 4 or General Mills brand boxes 10-13 ounces of cereal for $1.50 each. You have to buy 4 but the savings are about 65% off the normal, albeit high, prices. Even without a coupon, its a great deal. With a coupon, some people are getting their cost down to 50 cents a box.

When you see a deal like this, it's time to stock up, big time. Ideally, to give you enough cereal until the next equally discounted sale. If that's 6 weeks and you want a little cushion, buy 8 weeks of cereal. In many households that might be 16 boxes of cereal. Over time if you would have paid an average of $3 a box of cereal, you are saving over $160 which is enough to buy 70 gallons of milk. So stock up on your cereal and effectively get your milk for free!

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Set Your Holiday Shopping Budget Now and in Cash

The simplest way to set your holiday gift budget is to start with an amount you are comfortable with and take it out in cash from your bank account. Pay for everything that you buy in cash and you won’t have a January hangover when you get your credit card bill. Let’s say you can afford $700 for holiday presents. You make your list in a spreadsheet and allocate dollar amounts until you get to $700. Then you take out your cash as you go shopping. For instance you might take out $350 to start with. If you go beyond that, use your debit card and subtract the overage from your $700. If you are online, use your debit card. If you hit your limit, you are done. Keeping within your budget is key if you ever want to improve your finances.

What this method forces you to do is to fit each present into your budget as opposed to adjusting your budget based on what you buy.

Don’t have the cash for presents? You might want to reconsider how much you can afford to gift then. Your family and friends aren’t going to be thrilled if you go broke by buying them presents.

Pay Your Bills Early

Most people like to pay their bills on the very last day they are due. Rationally, they figure that they get the free "float" on their money. Unfortunately, paying bills at the last moment eventually ends up in a late charge. A single $39 late fee will wipe out years of interest that you would have earned by delaying your payments. And banks in 2009 are set to earn $20.5 billion in late fees alone.

A great practice is to pay your bills the moment you get them. If you used online payment, you can pick a date in the future before the due date but make sure you schedule it early. There are also auto-pay plans for people who are often forgetful. So pay your bills early and don't let them earn any late fees off of you.

Paying your bills early also allows you to reduce your interest charges if you are carrying a balance on a credit card. If you are paying 10% interest on a credit card and getting 0.5% interest in your checking account, it really pays to pay it early.

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Turkey: Frugally Twice as Nice

Times are tough but turkey is cheap. Where else can you buy a good quality meat for $0.30 a pound? The problem is that we get sick of turkey sometime around 2PM on Friday and we don't want to see it again until next November. But really, by mid December, most of us wouldn't mind a nice piece of turkey breast or a good turkey soup. Take advantage of the super low Thanksgiving pricing by buying a second (or third) frozen turkey today. You can pick up a 24 lb turkey for $7 to $10 at most stores. If you have a second freezer, it is really time to stock up. Since your first turkey is likely thawing right now, you should have room for the new one in the freezer. A big turkey can feed a family for weeks: as a turkey, sandwiches, or soup. Sure, too much of a good thing will make your family beg for something else, but staged over time, your pocketbook will be thankful for your frugality.

Always Check Your Receipt

You would think in this day with electronic systems that there would never be mistakes on your receipt. Think again. There are still many errors that happen in the grocery store and other retailers. One really big one happens when you are applying a discount based on a coupon or purchasing a certain number of items to get a bulk discount. Take this example: A 20% off coupon for shoes was entered manually by a clerk but for whatever reason, the discount was only about 10%. The clerk simply entered in a different coupon code that was more common. Another example, this time in the grocery store, where 5 qualifying items were purchased to get a $5 discount but one of them didn't show up as qualifying. And lastly, one in which the price on the shelf was different from the price in the electronic register. By law, you are entitled to the price on the shelf. While errors are far less common than they were in the days of manual entry, they still happen and can cost you.

One other reason to look on your receipt? Coupons. Smart electronic systems look at what you purchased and will often offer you an extremely good coupon to buy a competitors brand. We've gotten free coupons and coupons for more than 50% off. But if you just throw away your receipt, you'll miss these great deals.

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Maximize Income After Social Security Limit

If you are going to live cheaply, you need to save on your taxes. There's a little part of the income spectrum where the more you make the less you pay in taxes. Once you have hit $106,800 in income, you stop paying Social Security tax of 6.2%. 6.2% is a huge amount of the taxes that you pay Federally. In fact, when you combine your Federal and Social Security taxes, you pay 34.2% on ever dollar over $82,250 of taxable income before hitting the cap and 28% afterwards until you hit $171,550 (Single filers). You would have to have nearly $373,000 in taxable income before you paid a higher marginal rate (35%).

So how can the Cheapster take advantage of the tax laws? If you have any income from bonuses, commissions, etc that comes in January, try to get them paid out on December 31st. Alternatively, you can shift money from the current year into next year. It's far better to earn $130,000 one year and $90,000 the next than to earn $110,000 both years. Barring any other deduction phaseouts, you will save over $1,000 in taxes if you can shift your income. If you can do that, it's like getting a HDTV for free!

Read more Year End Tax Tips.

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Super Size One Meal

If you are heading out for some fast food, here is an easy way to save some money. Rather than getting two value meals, get a single sandwich and super size the other meal. You'll get just as much food but the cost is much lower. Fast food restaurants know that they can only charge so much for a meal and the super size represents the best value. If you are good with sharing a drink it works well. If not, then bring another cup with you.

Which sandwich should you super size? Depends on the price gap between the meal and the sandwich which isn't always the same. Choose the one with the smallest gap.

Eating Out Well for Less

Dining out can be expensive. A quick way to save money and still get your fill is to order tap water with your meal. Drinks typically run about 15% of the bill and if you have alcohol, as much as a quarter of the bill. Drinking water is better for you anyway. For those that want bottled water, know that much of the bottled water in the market is simply municipal water (tap) filtered. Split an appetizer or skip it entirely and you'll be well on your way to shaving a third off your dining bill.

Hotels: Ask for a Good Room Right Away

When checking into a hotel, it always pays to smile and ask for a good room upfront. If you like a high floor or room facing a certain direction, don't let 20 seconds go by before you ask for one. If you wait until after they have chosen a room for you, they are less likely to give it to you. You'd be amazed how far a good smile, a little humor, and some kind words will go. It may not get you a suite upgrade, but you'll probably avoid the room next to the elevator on the second floor. It always pays to be friendly, especially when traveling.

Get $500 to $1,000 By Giving

In these tough times getting another $500 or $1,000 can make a huge difference. But getting extra hours at work, a raise, or finding an uncle that has spare cash just isn't in the cards this year. Well, your big Uncle, Uncle Sam, is always ready to give you a little money, so take advantage of it. Head to your closet and look at everything that that you really don't use anymore. What would you pay for each of these items if you went to a thrift store? If you don't know, head down to one and find out. If you have really nice stuff, head to a "boutique" thrift store. The IRS will allow you to take the Thrift Store value of each donated item off of your taxes. You have to itemize for this to be worth anything, but if you are in a high tax state or if you have a mortgage, you probably qualify.

Create a spreadsheet of every item, the color and the thrift store value. You'd be surprised how much this adds up to just due to the sheer number of pieces. How much is it worth to you? If you are itemizing and are in the 28% tax bracket with a 7% state income tax, you would get 35% of the thrift store value. The higher your income, the more you are able to deduct since it is all based on your marginal tax rates. So if something is worth $5, it's worth $1.75 in real cash to you. If you have 300 pieces like this, you just got yourself over $500 for your donation to charity.

Important Notes:

1) Always get a receipt from the charity that details what you have donated ("3 bags of women's clothing")

2) Keep the receipt and your detailed spreadsheet together in a file for your taxes

3) Be realistic on the values. That sweater may be precious to you but it isn't going to fetch $50 at a thrift store.

Take some time this Thanksgiving to collect and itemize all your charitable donations and help a family that is less fortunate than yours and help yourself at the same time.

The Importance of a Home Affordability Calculator

If you are planning to buy a house, the first thought that strikes you is affordability. It doesn’t make sense shopping for a house without knowing how much cash you can shell out each month for your mortgage payment. So, the first thing you need to do is locate a good website that offers free home affordability calculators such as MortgageFit.com, where you can find a number of helpful calculators. If you are aware of your financial strengths and weaknesses, it becomes easier for you to plan out your payments well in advance.

What are the magic numbers?

In order to use the home affordability calculator, you need to feed in the following information

Gross monthly income
Annual property taxes (typically 1-2%)
Mortgage Term (typically 30 or 15 years)
Mortgage interest rate (currently about 5%)
Amount you will be paying as down payment
Other monthly debt obligations (auto loans, credit cards, student loans, etc.)
Annual homeowners’ insurance premium

The home affordability calculator works on the basis of a 36% DTI or Debt-to-income ratio. This would be all of your debt payments divided by your gross income on a monthly basis. However, if you are comfortable in making a higher payment each month, you may opt for a higher ratio or conversely if you want to live below your means, a lower ratio. Typically, higher ratios are seen in expensive locations such as California and New York City where it would be tough to meet the standard ratios. Also, higher income families sometimes have a higher ratio since they can still easily live off of the balance of their income after the mortgage payments.

It is important that you remain current with your mortgage payments every month. If you fall behind on payments, there are serious consequences. First, lenders typically charge a hefty late payment of 5 percent on average, if you fail to make your payment within 15 days of the due date. After 30 days, the late payment will be reflected on your credit report pushing down your FICO score. Fail to pay your mortgage for a few months after that and you lender can start foreclosure proceedings in most states. Your dream of owning a home will turn into a nightmare as you go through the foreclosure process. So, it is important that you understand the seriousness of the amount you intend to borrow. If you have any doubts, opt for a cheaper house that you know you can make the payments on. So pay attention to the home affordability calculator and make sure its truly affordable for you before you buy.

Contributed by MortgageFit Community member

Credit Cards: Be Prepared for a Shock

If you are like us, you probably never paid much attention to the credit card letters that were sent to you over the years. Typically, there was some obscure change to privacy or a change in the minimum fee for balance transfers. Small changes that weren't likely to cause you to cancel a credit card. But things are different now and if you receive a letter from your credit card company, you had better read over it completely and thoroughly. Because of the economy and the change in credit card lending laws set to take place in February, banks are making drastic changes to their accounts. The most popular change is to jack up your rate to some obscenely high level even if you have made your payments on time for the last 10 years. The banks are free to raise your interest to a whopping 29.99%. You have the right to opt out and if you call them up you may be able to get this new rate reduced even if it takes a supervisor to get it done. Don't be passive about it, the combined increases in your rate and the minimum payment could result in you paying 300% more each month. If all else fails opt out and pay the card down to zero.

Ice Cream: How Manufacturers Screw the Consumer

Hey, if you are like us, you love ice cream. Nothing better than getting a nice half gallon of Breyers, Dreyers or whatever your favorite brand might be. And its amazing that over time, the price of ice cream, at least when its on sale, hasn't really gone up that much. Ever wonder why? Well, you might want to take a closer look at the package because its not a half gallon any more. That's right the executives at places like Unilever which owns Breyer's decided one day that the way to churn out more profits is to give you less product. First they moved from the standard half gallon size (2 quarts) to 1.75 quarts, a 12.5% reduction. Then that wasn't enough so they dropped it again to 1.50 quarts, a whopping 25% reduction from the original size. They apparently were pretty smart in doing this because most of America didn't notice. Perhaps that's why they did it in two stages, so that it would be tougher for us to distinguish.

Think that's the only thing in the grocery store that's shrunk? Think again! Tomorrow we will cover a whole host of grocery items that have shrunk at your expense. So when you think you are getting a deal, you might be surprised how they have been able to pull one over on you.

For more ways on how to save at the Grocery Store, read: Groceries: How to Save Big without Coupons

The True Cost of Buying Optional Stuff

It is far easier to build wealth but cutting your costs than increasing your income for one very good reason: taxes. Don't forget that the $150 purse that you bought in the store may have needed $225 in income to buy. The more money you make, the higher the income needed to pay for any item. For those people at upper incomes that live in high income tax states that also have high sales taxes, the number can approach 50% or said another way, if you want that $250 golf club it will take you $500 in income to get it.

So when you are out there buying items you don't need, think about what they are really costing you.

Electricity: Find Idle Energy Hogs

Electricity can cost the typical family $1,000 or more a year. What might be surprising is that 10% or more of this energy might be wasted on devices that are sitting idle. How do you find these energy sucking demons? Invest $24 in a device like the Kill A Watt that allows you to measure the electric usage of any electronic device. It will take you a couple days but you'll probably find $10 in wasted energy a month that you never knew was costing you money.

Typical culprits are computers, fax machines, stereos and DVD players. There are 720 hours a month that they are burning through your pocket. If you want to lower your cost on the Kill A Watt, split the purchase with a friend. It won't take you more than a week or two to get the bulk of the value and then you can give it to your friend. $12 for $10 a month in savings, that's cheap.

For more information on how to save on electricity, read How to Cut Your Electricity in Half.

Save 20-50% at Farmers Market

If you want to save money but love going to a farmers market for fresh produce, use this tip. Show up 45 minutes before closing time. If it is a Sunday, then it is ideal but it will likely work on Saturday too. Start searching for deals and ask some of the vendors how much is the price for different items even if they are clearly marked. Many of the vendors will start marking down their unsold produce when time starts to run out. You may just have to ask for a discount but you are far more likely to get it in the last few minutes since unsold produce may be too ripe for the next market. We've seen discounts of 20% to getting two-for-one deals. Same produce but different dynamic. Of course, the best produce may already be sold out, but we've rarely been dissapointed by going late.

If you want even more tips, read 5 Tips for Cheap Produce at Your Local Farmers Market.

Lump Your Donations in One Year

People often justify certain behaviors on the tax deductibility of activities such as student loan interest, mortgage interest, and charitable donations. However, all those deductions are worth exactly nothing if you are like most people and take the standard deduction. Plan your tax year in advance and lump donations from two years into one. You’ll increase the probability that for one year you will get some benefit for your generosity.

This can be tough if your charity or faith based organization expects continuous donations throughout the year or has a holiday drive. If possible, time end of the year contributions to occur on January 1st. That next year, give them your donation in December. They'll get the same amount of money at virtually the same time, but you'll get a bigger deduction. Nothing like using Uncle Sam's money to support your causes and if the charity gets the same amount and you pay less taxes, everybody wins.

To understand how you can get a bigger benefit for donating to your favorite charity, read Gift Appreciated Stock and Cut Your Taxes.

Lump Your Donations in One Year

To understand how you can get a bigger benefit for donating to your favorite charity, read Gift Appreciated Stock and Cut Your Taxes.

Cheapest Airfares

From a LiveCheap reader: all-in-all, airfare is often cheapest on Friday night and through the weekend. This is because the least price-sensitive travelers, business travelers, tend to book during weekdays and sometimes weeknights early in the week. Airlines raise rates at these times knowing they are less cost conscious. By the weekend, it's non-business, more price-sensitive travelers, and rates often lower accordingly. I've booked hundreds of flights and this seems to always be the case with few exceptions.

Find and exploit competitive routes. For example, JetBlue flies Oakland to JFK and they compete head-to-head with United on traffic. As a result, the airfare from from OAK-->JFK is typically hundreds less than SFO-->JFK, or SFO-->Laguardia, etc. Check where Jetblue or Southwest flies and match their routes and you'll get lower fares.

Whole Foods: Yes, it Can Be Cheap

From a Reader: Sometimes you really don’t want the cold cereal or oatmeal for breakfast, and you are too lazy to scramble the eggs and make the bacon. So what to do when you don't want to pay an arm and a leg? Where can a family of 4 eat breakfast for less than $8? I had to think outside the box for this one, and now it has become a favorite with our family. With locations in 38 states, DC, Canada and the UK, I am sure you have heard of them - Whole Foods Market. They may be known to many as "Whole Paycheck Foods", but they have a killer onsite bakery department that makes the BEST muffins that are hot and ready by 8:30 each morning. They also have seating in stores; some have larger stores than others, but the seating is like being in a diner. The kids bring their warm milk in their travel cups, and my hubby and I bring our travel coffee mugs, and we get 4 muffins at $1.49 each, then 2 coffee refills at $0.75 each, so for a total of $7.45, we have breakfast. We sit and eat our warm muffins, and people watch, then go back around the store for all the FREE samples they serve on the weekends- bonus!

I can't afford to shop at Whole Foods for all my foods, but I can take advantage of their cheap breakfasts.

Get a Reasonable Amount of Life Insurance When You Need It

Life insurance is there to protect your loved ones in case the unfortunate happens. It isn’t supposed to let them hit the jackpot when you die. If you have enough liquid assets and limited debt, life insurance isn’t even necessary, but of course, y...ou probably can afford it. Many insurance agents will try to sell you 20 times your salary in coverage. Unless you have a tremendous amount of debt or want your heirs to be vacationing in the South Pacific, its unnecessary. 10 times your salary should be sufficient if you have kids.

Building up a nest egg during your 30s and 40s will also keep you from needing to pay through the nose for term insurance that lasts into your sixties. Once your kids are grown up and you have enough liquid assets, there really isn’t a need for life insurance for the vast majority of people. Bank the premiums instead and enjoy yourself. One last tip, stay away from whole life insurance products unless you really know what you are doing. Insurance is there to insure you against the unfortunate from happening not an investment vehicle. If you want to invest, invest in the market.Read More

Don’t Keep Collision on Older Cars

If you own a car outright, and it's worth less than $5,000, don’t bother with collision coverage. Once you factor in the deductible, you aren’t going to get much of a payout anyway. Better to keep banking the difference in premiums so you are “self insured”. One of the other premiums about holding a car for a long time so you don't have to carry insurance.

Keep Your Mortgage Broker Honest

If you are using a mortgage broker, you need to get acquainted with a Good Faith Estimate. It details what the expected fees will be. There is one line that you really need to understand that few people discuss, it’s usually referred to Yield Spread Premium (YSP). It’s what the bank pays your broker. Let’s say you are paying a 1% origination on a $400,000 loan. You think you are paying them $4,000 for the loan which seems fair. But the bank is paying the broker another $2,500 in YSP. Brokers will tell you that you aren’t paying it, but you are. The bank is charging you a higher interest rate to enable them to pay the broker. So instead of 5.00% maybe you were charged 5.25%, a big difference over time. 1% is plenty for a decent sized loan, so add the two together and make sure it’s not more than that.

Keep Your Mortgage Broker Honest

Don’t Forget the Damn Baggage Fees

Used to be that you could compare airline prices easily, but now you have to factor in baggage fees if you plan on taking anything more than a carry on. A couple traveling with two bags each and you are going to tack on $200 round trip. If you are flying Southwest, they ...at least believ...e in free baggage. For more information about airline baggage and change fees, click the article below.

More information about airline fees

Don’t Forget the Damn Baggage Fees

More information about airline fees

Interest on Savings Will Never Make up for a Bounced Check

Interest on Savings will Never Make up for a Bounced Check: Current interest rates are so low that if you have a savings account and a checking account and bounce even 1 check (or pay a convenience fee) in a year, you will likely never make up for it. At the average rate of 0.5% for savings, you’d need to... have $7,000 to $9,000 in your savings to cover the cost of 1 bounced check after taxes. Remember you pay taxes on the interest in your savings account but you don’t get a break for bouncing a check. And you wonder why banks love to help you shuffle your money into their savings accounts. Forget the savings, make sure you have enough money in your checking account and invest in a higher yielding money market.

Rent a Small Car at a Low Rate

More information on how to save on rental cars

Always Ask for Forgiveness on Late Fees

It happens. You get busy with a vacation, a project at work, or just life in general and you miss a credit card payment by a day. If you don’t do it often, call the credit card company up and tell them some story about how life was tough that week. We’ve always gotten these removed, but just don’t let it happen often or they will jack your rate (sometimes up to 30%). And do yourself a favor, give the credit card a rest.

99 Cents Isn't Always Cheap

We love it when the stores get creative and lure you in with low priced offerings. For example, bleach is just Sodium Hypochlorite and the stronger stuff is 6.0% concentration. What do you get at the 99 cent store? They don’t usually say, most likely 3%... not a bargain. Same thing for bread, nothing like paying 99 cents when they are selling you 16 ounces instead of 24. Another one that we've seen lately is things that are normally sold in 1lb packages being sold in 12 ounce packages. They seem cheaper until you do the math. Stores love tricking unwary consumers into thinking they got a deal. Read the label and don’t be a sucker.

"Change Your Oil Every 3,000 miles" is a Marketing Gimmick

Seriously, at one point in time this might have been the case but most newer cars are every 7,500 or 10,000 miles. Even 10 year old cars are probably fine at 5,000 miles. So that little radio jingle about "lube it or lose it every 3,000 miles" is just costing you an extra $75 a year.