You can't do anything about the U.S. consumer price index, the official inflation measurement that is on the rise.
But believe it or not, you are totally in charge of your "personal price index," and tweaking it to save hundreds or even thousands of dollars a year doesn't have to hurt -- too much.
Just follow these 10 easy steps:
FIX MORTGAGE RATE -- If you have an adjustable-rate mortgage, refinance with a 30-year fixed-rate loan. Your biggest monthly expense will flat-line -- and eventually drop off a cliff.
Last week, the lowest rate for a conforming 30-year fixed rate was 5.375 percent, translating into a monthly payment of $2,240 on a $400,000 mortgage. If the best rate is more than what you're paying on your ARM, and you're not threatened with an imminent rate hike, don't call your broker right away. Be patient -- and pay attention, because rates could drop in the near future. Make www.bankrate.com a favorite in your Web browser and check rates at least once a week.
APPEAL PROPERTY TAX -- If you purchased your home in the last few years, there's a good chance you're paying too much property tax. In California, property values in most parts of the state have been plunging.
The silver lining in this black cloud is that the county will reassess your property to reflect the lower value, but you may have to fill out a form to get the ball rolling. That can save you hundreds -- maybe thousands -- of dollars.
The caveat: The law says these reductions in value are temporary. If property values jump back up, the assessor's office can boost yours to the pre-appeal level. Of course, if you think the county is wrong, you can appeal again.
How do you do it? You'll find instructions and forms on the Web sites of your county's assessor's office.
PLAN A WEEKLY MENU -- Arguably the most expensive items in your refrigerator are the ones that spoiled before you ate them -- all cost, no return.
To avoid having your vegetable bin turn into a petri dish, never set foot inside a grocery store without a list. And take a trip back in time. Sit down once a week and make a menu for each day. Post it somewhere that you'll see in the morning so you'll remember to take the pot roast out of the freezer or that today is the day you promised yourself to bring tuna on rye to work for lunch.
Your trips to the market will be reduced, as will be the need for emergency takeout. You'll be better able to mix up the menu, alternating meat dishes with less expensive vegetarian selections.
You'll save maybe one gallon of gasoline, at $3.50 a gallon, and $10 on spontaneous food purchases each week -- a total of $702 a year.
BE SMART ABOUT SNACKS -- As the parent of a constantly ravenous teenage son, I'd guess that a good portion of the average family's eating-out bill -- which exceeds $2,700 annually -- stems from swinging through a fast food joint to pick up an after-school bite. Personal experience says that anything I get at Burger King is going to cost a minimum of $5.
Meanwhile, my 15-year-old will just as happily heat up frozen Costco burritos, which cost 37 cents each (in the handy 24-pack). In other words, one meal at Burger King costs the same as almost a week's worth of burritos, assuming he has two a day, and my guess is that the burritos are marginally more healthful.
TELECOMMUTE -- Now that most phone companies have flat-rate plans, working from home isn't likely to generate a huge phone bill. But driving to work every day can bankrupt you.
If your office is 20 miles away and your car gets 20 miles to the gallon, you're spending about $7 a day. If you telecommute two days a week, you'll save $14 a week, or $728 a year.
SHOP FOR LIFE INSURANCE -- If it's been several years since you've checked out life insurance, you're in for a nice surprise. Term life premiums have dropped dramatically.
A person who bought a $500,000, 20-year level-premium term policy a decade ago, at age 35, is paying $700 to $800 a year, says Byron Udell, president of AccuQuote, a Wheeling, Ill.-based insurance brokerage. If that person is still in good health, he or she can replace the remaining 10 years on the policy at less than half the cost -- about $310 annually. And a 45-year-old would pay about $625 annually for a 20-year level-premium term policy today.
CHECK HEALTH COVERAGE -- If you're in a two-income family and both employers offer health insurance, make sure you spend some time evaluating the costs and benefits of each plan. In recent years, employers have moved toward subsidizing employee- only coverage far more heavily than family coverage. For a couple with no kids, that often means it's far cheaper to cover each spouse at his and her own workplace.
The analysis gets more complex for families with children. In some cases, it's most cost effective to buy family coverage with one employer, though some families are reluctant to put all their health benefits in one basket. The worry is often misplaced because many plans allow employees to enroll midyear if they've had a significant change in life circumstances, such as a job loss, which caused them to lose other coverage.
QUIT SMOKING -- The $4.50 to $5 per pack is just the start of what smoking costs. Those great term life insurance rates quoted earlier, for example, evaporate for anyone checking the box for "smoker." Instead of paying $625 for a $500,000 policy, a 45-year-old smoker would pay about $2,500, Udell says.
So that pack-a-day habit adds up to $1,825 a year for cigarettes alone. Add the life insurance costs of about $1,875 and you get an annual bill of $3,700 -- before you account for the potential additional doctor's visits, dry cleaning bills and other ancillary costs of smoking.
PAY DOWN DEBT -- I don't have to tell you how foolish it is to carry a balance on a credit card: If you buy something and leave the debt on an 18 percent card, you'll have paid for the item twice in less than five years. But some smart people will tell you that the same doesn't hold true when you're borrowing against your home because this debt is tax deductible, and many otherwise savvy advisers will even urge you to use a home equity loan to finance a car. This is insane.
Yes, mortgage and some home equity debt is tax deductible, so that, in simple terms, each dollar you pay in mortgage interest will cost you only 60 to 70 cents. But you're still out 60 to 70 cents.
If you manage to save some money out of your monthly budget by following the previous tips, use at least a portion of that to pay off -- in this order -- your credit cards, car loans, personal lines of credit, home equity lines and, finally, the mortgage.
USE REWARDS CARDS -- True confession: I am a credit card junkie. I use plastic to buy clothes, books, groceries. Understand, I never have a revolving balance. As soon as the bill comes, I pay it. So, all I get from using a credit card is "float" -- about 20 extra days to pay -- and "rewards" of cash or gift certificates.
In an average year, these rewards pay me $400 to $600.
My criteria for a rewards card is simple: I want a no-fee card that pays cash or provides gift certificates for something I use frequently: books from Amazon and groceries from Costco, for instance.
I don't want miles that I might have trouble using to book a trip, or "points" that can be redeemed only for merchandise, or credit on hotel stays.
Want to find a rewards card that meets your criteria? Point your Web browser to www.cardtrack.com and click on "search cards." The one caveat: Make sure you have the discipline to pay off your cards every month and never purchase anything that you wouldn't otherwise buy just because you're using plastic.
Los Angeles Times columnist Kathy Kristof welcomes your comments but cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. First St., Los Angeles 90012, or e-mail email@example.com.
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