Sunday, Jul. 27, 2008

Scour household expenditures, and you'll clean up with savings

The Consumer Reports Money Lab recently uncovered hidden savings in everyday spending that could save consumers as much as $500 per month -- even while gas and food prices continue to rise.

Here's where to look and the average savings consumers might be able to find: Savings shown are Consumer Reports estimates based on what a range of consumers really spend and can possibly save. Actual savings will depend on individual circumstances.

Find cheaper auto insurance -- $65: Annual surveys of Consumer Reports readers have shown that many have stayed with the same insurer for

15 years. Depending on people's profiles and where they live, they might be able to save hundreds a month by shopping around. For example, a married couple without violations or accidents but with a driving-age son in Los Angeles can save $380 per month on standard coverage by switching to a lower-cost auto insurer.

How to do it: Start at the National Association of Insurance Commissioners' Web site, at www.naic.org, and click on "NAIC States & Jurisdictions" in the upper lefthand corner to find a state's insurance department. Most provide comparative premium quotes based on standard customer profiles.

Optimize life insurance -- $110: Life insurance premiums have dropped dramatically since the 1990s; it will probably pay to replace a policy bought years ago. A $500,000, 20-year guaranteed level term from Prudential, for example, would have cost a 50-year-old man about $2,125 a year in 1998. Today the same guy, now 60, could pay Prudential $1,385 a year for the same coverage over the next 10 years, saving $60 a month.

How to do it: Get premium quotes at www.accuquote.com and www.lifeinsure.com. Don't cancel a policy until a new one is in place.

Shop smart for food -- $200: Making different choices in the supermarket and when eating out can net monthly savings of $130 to $255, say Consumer Reports Money experts. The average family of four can chop the grocery bill by $190 a month by shifting to a lower-cost mix of foods.

How to do it: Plan menus around sales of fresh poultry, fish, meat, dairy and produce and make use of leftovers. Avoid costly prepared meals. Eat more low-priced, high-nutrition foods such as beans and potatoes. Try store brands and sign up for store discount cards.

Stop paying bank fees -- $25: Banks collected about $39 billion in account fees and penalties last year. That works out to an average of $28 per month per household. But with some planning, it's possible to pay zero.

How to do it: Bank at large institutions with lots of cash machines in convenient locations. Shop for free checking and strictly adhere to provisions for minimum balance, direct deposit or other conditions to avoid monthly fees.

Call up phone savings -- $35: When Consumer Reports experts examined phone bills, they uncovered savings from $15 a month for budget callers to $55 per month for heavy users.

How to do it: Peruse the past few months' phone bills to assess how many minutes typically are used on land line and wireless calls.

Comparison-shop among cellular service providers, the local phone company and the cable TV company. Don't buy more than is needed, such as an unlimited cellular plan for those who rarely exceed 900 minutes per month.

Pay off credit cards -- $65: On average, consumers who carry a balance owe $2,200, on which they pay 15.2 percent in annual interest charges. Eliminate that and save $28 per month. About 15 percent of consumers carry balances of $10,000 or more; they can save $125 per month by paying off their debt.

How to do it: Stop charging, then pay more than the minimum required each month until it's paid off. Dig up cash for this from the U.S. Treasury stimulus check, garage sales or a part-time job.

On the Net: www.consumerreports.org.

NEWSPAPER ENTERPRISE ASSOCIATION