ScottMarsh.com

Million Dollar Choices for Everyone!

If you know what you are looking for click the link below to jump to that part of the page. By clicking on any of the categories of expenses below, you can learn how to save a portion of your costs. After you have decided how you will save money, don't forget to invest the savings. Remember, it is only a Million Dollar Decision if you choose to invest the money saved. For your convenience there is a button on the bottom right that will appear to scroll you back to the top of the page.

AUTO

Vehicle Purchasing

The average American family spent over $8,500 on transportation in the most recent year for which data is available. This represents nearly 15 percent of the average family's income. Our research has uncovered incredible disparities in the costs of owning various vehicles. Making smart transportation decisions by purchasing reliable used cars can save a family an impressive amount of money. Professor Marsh's car buying formula will save the average family $1,000s of dollars per year. We recommend that individuals buy used vehicles (2-3 years old), buy for value (high quality cars that depreciate quickly), and drive what they purchase for at least 10 years. A $25,000 vehicle will depreciate, on average, over $11,000 dollars in the first 3 years of its use. While maintenance costs on used cars are slightly higher than on brand new vehicles, a significant portion of this depreciation can be saved and invested instead. If we conservatively assume that a 25 year will save half of the $11,000 depreciation by purchasing a used vehicle, this $5,500 savings would be worth over $500,000 dollars at retirement. Use the resources highlighted below to determine how to purchase for value.

  1. http://www.edmunds.com/apps/cto/CTOintroController The True Cost to Own Calculator lets you choose any model of car (past 6 years) and gives you both cash price and true cost to own estimates. See which car in the class you are shopping within will cost the least. For example, a person looking at Toyota Camry would want to look at Honda Accord and Mitsubishi Galant as well. This tool helps individuals understand the true costs of car ownership over the long term. The calculator even calculates a cost per mile.
  2. http://www.carfax.com is a critical resource for any savvy used car buyer. Use the VIN number to check out the car you are looking at purchasing. Make sure the vehicle you are purchasing is not a wreck.
  3. USA Today Article This interesting study helps overturn some of the common myths about which vehicles are the most reliable. Use this study to help you shop for value in your auto shopping.
  4. http://www.fueleconomy.gov/feg/findacar.htm is a tool you should use when you are shopping for a car. This tool allows you to easily compare the fuel efficiency of various vehicles.
  5. http://partners.leadfusion.com/tools/statefarm/auto11/tool.fcs This tool allows you to easily calculate the price range of vehicle that you can afford.

Car Insurance

Auto insurance is a part of nearly every person's budget. Many people, unfortunately, unknowingly pay more money for this coverage. Premiums for the same car and the same coverage can vary as much as 50% among various carriers. Utah Department of Insurance rate information collected showed that average premiums for a single, 20-year old male ranged from as low as $466 to as high as $2613 for a six month policy. The fact is that you may be paying way too much for your automobile insurance coverage. Assuming a 20 year old saved only half the amount between the lowest Utah rate of $466 and the highest rate of $2613, the decision to make this million dollar choice could be worth well over $3,300,000 by retirement. Explore the links below to determine how you can save a huge amount of money on your insurance coverage.

  1. Insurance Rate Information by State Use this great resource to find your state's insurance department rate information. This is the best, most objective, place to begin your comparison shopping
  2. http://www.naic.org/documents/consumer_guide_auto.pdf is a wonderful publication from the National Association of Insurance Commissioners that teaches you how to effectively shop for automobile insurance. Pay particular attention to the section that discusses the many potential discounts available. Ask your insurance agent about each of these discounts to see if you qualify.
  3. Insurance Rates Database A large part of your insurance costs stem from the vehicle you choose to purchase and drive. Use this handy database to compare the costs of the vehicle you drive with those costs of other vehicles. This database is intended to help individuals compare insurance rates for different vehicles. On the first tab, you can see the alphabetical listing (by make) of the 568 cars in the database. On sheet two, the results are sorted so they highlight those cars that have the best liability ratings (meaning individuals are charged lower rates on liability coverage). The third tab is sorted according to those cars that have the best collision and comprehensive rates. Tab four is sorted so it displays those vehicles that have the best VSD (a discount on medical/PIP for vehicle safety). Finally, tab 5 lists those cars that both had either a significantly or somewhere lower than average liability premium AND a significantly or somewhat lower collision/comprehensive premium. This database should help you in making wise auto insurance purchasing decisions.

Car Washes

The average cost for a basic auto detailing package is $58, according to Costhelper.com. The tab for getting your car detailed every month is $696 per year. Fortunately, you can learn to clean your car at home very inexpensively. If a 25 year old decided he/she was going to just wash his/her car at home, let's conservatively assume that he/she could save half of the $58 per month (after all, he/she would have to purchase some supplies). This decision to save just $29 per month would be worth about $350,000 if he/she invested the savings. Use the links to learn more about how to properly wash a car.

  1. http://www.consumerreports.org/cro/cars/new-cars/news/2005/dos-and-donts-of-washing-your-car-1205/overview/ is a great, short video and article that teaches you what to buy to take care of your car at home. This provides some great tips that will allow you to do your detailing like a professional.
  2. http://www.ehow.com/how_1328_wash-car.html provides another great step-by-step description of how to wash your car by hand.
  3. http://www.ehow.com/video_2328293_wash-car.html provides a whole series of videos that show you how to do everything from washing your car's interior mats to waxing the exterior.

Gasoline

Over 20% of the cost of owning a vehicle stems from fuel costs. The average cost per mile for gasoline is 11.7 cents. Fortunately, there are numerous ways to help control fuel costs. The decision to include fuel costs in your next car purchase can save you a huge amount of money. Additionally, we provide tips below for improving the fuel efficiency of your current vehicle. Conservatively assuming that a 25 year-old person could save only 25% of the average cost per mile for gasoline, and they chose to invest the savings, this Million Dollar Decision could be worth over $400,000 to them at retirement.

  1. http://www.fueleconomy.gov/FEG/drive.shtml provides a great listing of tips from the US Department of Energy to help you improve the fuel economy of the vehicle you currently drive. Learn how doing simple things such as removing excess weight.
  2. http://www.fueleconomy.gov/feg/gasprices/states/UT.shtml allows you to easily find the most inexpensive gasoline in your area.
  3. http://www.fueleconomy.gov/feg/findacar.htm is a tool you should use when you are shopping for a car. This tool allows you to easily compare the fuel efficiency of various vehicles.
  4. http://www.fuelcostcalculator.com/ Oftentimes, we forget to figure in the cost of fuel when we go on a trip. Use this handy calculator to determine how much money you will spend on your trip. It may, sometimes, be cheaper to fly. Be sure to invest the savings you find.
  5. http://www.opentravelinfo.com/travel-guide/uncategorized/how-to-save-money-on-gas-29-tips.html lists 29 tips on how to save gas.
  6. http://www.bankrate.com/brm/news/advice/20000215c.asp Bankrate, a well-known website for loan advice, lists 15 ways to save gas.
  7. Gas Buddy Mobile Application If you have a mobile device with access to the internet, this app will provide you a list of gas stations nearby. You can then choose to sort the list by price or distance. Remember cheaper isn't always better if you have to drive way out of your way to get it.

Auto Loans

While it would be ideal if people did not have to finance their auto purchases, the fact is that most people are making a car payment. The average monthly auto payment for a single car is a whopping $479. Research has shown that many people spend a substantial amount of time shopping for a great deal on a car only to fall prey to predatory dealer financing. Often, dealers charge higher rates than the credit of borrowers really warrants. Edmunds.com reports that the average car loan is nearly $25,000 dollars. Research shows that bank rates on loans are often lower than dealer rates. Credit unions are often a full 1.5% lower than the best bank loans. If a person were to get a 60 month loan with an interest rate that was 2% lower than the dealer rate (assumed 8%), they would save an impressive $23.59/month. This savings could be worth over $100,000 at retirement (EVEN IF THIS WERE THE ONLY AUTO LOAN THIS INDIVIDUAL EVER HAD!). Use the resources below to learn how to save substantial amounts of money on auto loans or to get out of a bad loan you are in.

  1. http://partners.leadfusion.com/tools/statefarm/auto05/tool.fcs this great calculator allows you to easily see how much you will actually save based on different loan interest rates. Use it to determine how much you should be contributing to your qualified retirement plan.
  2. http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/ABCsForAGreatCarLoan.aspx provides a great list of tips for getting the best possible loan. It explains how you can prepare to ensure you don’t get taken advantage of when you are getting your loan.
  3. http://www.capitalone.com/autoloans/refinance/?linkid=WWW_Z_Z_Z_Z_H1_04_T_ALRF Are you already stuck in a high-rate loan? This website allows you to see if it would be possible to reduce your rates even further by refinancing your auto loan.
  4. http://www.bankrate.com/auto.aspx Credit Unions generally have the best rates for auto loans. Use this neat Bankrate.com tool to comparison shop among various auto loans.

Auto Leases

While Lessors often lure you into leases with lower monthly payments, there are a lot of hidden costs involved with a lease. Most leases will charge you an extra amount of money if you drive too many miles (usually 15 cents per mile). Research shows that 35% of drivers will exceed their lease mileage allowances. You must care for the vehicle properly (pay for ALL scheduled maintenance), and if there is excess wear and tear, you will be charged for that too. The average excess wear and tear expense is $1700. Additionally, leases often limit your flexibility and don't allow you to take the vehicle out of the leasing state. Finally, leased vehicles are often more expensive to insure. Consumer Reports ran tests to determine whether it would cost more or less to lease or purchase an auto. To purchase an average 2008 Honda Accord, it would cost $4,597 dollars less to purchase this vehicle than to lease it. If a person twenty-five year old purchased a new car every five years instead of leasing a vehicle, this Million Dollar Decision could be worth a whopping $321,000 for him/her at retirement. To learn more about leases, follow these great links below:

  1. http://www.federalreserve.gov/pubs/leasing/glossary.htm is a guide from the Federal Reserve that helps consumers understand leases and the many hidden costs out there.
  2. http://www.federalreserve.gov/pubs/leasing/checklist.htm is a checklist from the Federal Reserve that helps consumers take the steps to analyze what an auto lease will cost them.
  3. http://www.leasetrader.com/ is a service for those individuals who are already trapped in a lease. Use this resource to get rid of your lease.
  4. http://www.swapalease.com/ is another site that allows you to conveniently exit your expensive lease before it ends.


HOME

Home Purchasing

Buying a home is an important part of the American dream. Home ownership provides security, a sense of satisfaction, and a pride of ownership. Also, a home purchase can be a sound financial investment. Over the past 40 years, home prices have appreciated at an average of 6 percent per year.(source: National Association of Realtors)
For most Americans, the cost of paying for their home averages nearly $17,000/year. This is the largest category in the average American's budget. A purchase of housing that is outside of a person's budget range is one of the most frequent causes of bankruptcy. Professor Marsh recommends that individuals follow a simply formula to ensure that they don’t spend too much of their budget on housing costs. This formula takes the monthly income of the primary breadwinner for the family and subtracts from this number all obligations. The resulting number is then multiplied by 35% to determine the maximum monthly payment that should be paid. The average mortgage payment is currently over $1500 dollars (30 year fixed loan with an APR of about 5%) for a $240,000 home loan. With a median household that barely exceeds $50,000, and monthly debt payments of $2300 on average, it is obvious that most Americans are probably spending too much on their housing. Imagine that a 25 year old couple made decisions that would allow them to save only $2000/year versus the national average housing costs. This decision could be worth over $1.5 million to them at retirement. Use the following tools and articles to see how to save money on a housing purchase. If you are already in a home, see the "mortgage" category under Credit Management Million Dollar Choice Opportunities to see how you too can save.

  1. http://www.hud.gov/homes/index.cfm provides access to the listing of HUD foreclosures available for purchase. Often, you can get a much better deal on these types of homes than on typical homes.
  2. http://www.biggerpockets.com/bank-reo.html contains a great, free listing of REOs. REOs are properties that have been foreclosed on by the bank. Often, these can be purchased at firehouse sale prices.
  3. www.zillow.com is an amazing resource that allows you to look and see how much houses in a neighborhood cost on average. This is a great way to see if you are getting a good deal on a home purchase.
  4. http://www.nachi.org/ is a site that any prospective home buyer needs to carefully look at. Hiring a home inspector certified by The National Association of Certified Home Inspectors will ensure that you don't purchase a house that has significant problems. Find out what is wrong before buying.
  5. http://www.usa.gov/Citizen/Topics/Family/Homeowners.shtml#vgn-buying-and-financing-vgn provides the Federal Government's guide for buying a home. Learn many great tips for saving money on your home purchase right here.

Renting

Renting can be a substantial expense. The median national rental cost is $1324 over all metro areas. However, rental expenses are literally all over the map. An average rental costs only $936 in Phoenix, while the average rental in Washington DC is $1608. If possible, it may be best to investigate the possibility of moving to a lower cost area. Similarly, it may be that your situation makes it more preferential to buy a home instead of continuing to rent. Use the utilities below to understand the potential savings. Finally, if you stay where you are, you may be able to save money on your rental insurance coverage by following the tips below. Assuming a 25 year old moved from a place where he/she was paying the average national rental rate to lower-cost Pheonix. If this person invested his/her savings, they would be worth nearly 5 million dollars at retirement.

  1. http://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx is a great cost of living calculator that allows you to see how much rent you will likely pay in the city you move to.
  2. http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH provides a great calculator that allows you to consider all of the various costs of buying a home versus renting a home. See how much you could save by either renting or buying. Using the default assumptions, purchasing a home would save a person $34,000 over 10 years.
  3. http://realestate.msn.com/slideshow.aspx?cp-documentid=19258191 allows you to find a list of those ten metro areas that have the lowest rent. For example, in Oklahoma City renters only spend 12% of their income on rent.
  4. http://www.apartmentreviews.net/save-renters-insurance.htm provides 10 easy tips that will allow you to lower the amount you are paying for renters insurance.

Energy

The average household spends over $2000/year on energy. Fortunately, there are many suggestions you can follow to reduce your energy consumption and expenditures. Additionally, if you live in an area with competitive power markets, you may be able to switch to another electricity provider and save money in that way. If a person were able to implement several simple suggestions, such as using programmable thermostats, they could save a large proportion of their energy costs each year. Assuming a 25 year old was able to save just 25% of his energy costs, this decision would be worth nearly $500,000 by the time he/she retired. Explore the links below and discover how you can make a Million Dollar Decision today.

  1. http://www.energystar.gov/index.cfm?fuseaction=popuptool.atHome is a neat, interactive tool that allows you to see how you can save energy in various parts of your home.
  2. http://www.energystar.gov/index.cfm?fuseaction=HOME_ENERGY_YARDSTICK.showGetStarted is a neat tool that allows you to complete an energy audit of your home to see how energy efficient it is relative to other homes
  3. http://www2.whitefence.com/order-now-wfi.html?mcId=5 allows you to see if your home is serviced by more than one electricity provider. You may be able to easily switch and save money.

Cell Phone

The average American household spent over $600 for cell phone bills in 2007. Many individuals get stuck in two or three year contracts, only to find out that they didn't get the best deal on their service. Many cell phone sales dealers get people to purchase minutes they have no need of. Unfortunately, to cancel a contract, you generally have had to pay a fee of up to $250.00. Fortunately, now, internet technology has made it possible to switch to a new cell phone plan affordably. You can get out of your high priced contract and get a good, basic plan for about $30/month. That is a savings of $20/month (probably more) than the average cost. If a 20 year old switched from a $50/month plan to a $30/month plan, the $20/month savings, if invested, would mean the 20 year old would have $433,000 dollars at retirement.

  1. http://www.cellswapper.com/ was one Time's Best Sites of 2007. This site allows you to get out of the expensive contract you are stuck in without having to pay the early termination fee that usually accompanies the breaking of your cell phone contract.
  2. http://www.myrateplan.com/ is a great site that allows you to find the cheapest, best rate plan. They will pay your activation fee with most plans. After you get out of your high-priced contract, come here to get into a great, lower-priced contract.
  3. http://www.celltradeusa.com/ is another site that will help you to get out of your expensive cell-phone contract.
  4. Google Voice allows you free calls and texts anywhere in the United States and low rates on international calls.

Home Phone

The average American household spends just under $500/year on home phone service. Many consumers spend huge amounts of money on long-distance telephone bills. New VOIP technology and the internet will allow individuals to avoid most of these types of expenses. There are numerous VOIP technology providers you can learn more about using the links below. Skype, one of the providers, costs only $2.95 and gives you unlimited calling to all cell phones and landlines in the US and Canada. A 25 year old who decided to use Skype service at a cost of $2.95 instead of paying the average amount of $500/year would have over $450,000 by the time he/she retired. Use the links to see how you can begin saving today.

  1. http://www.voipnow.org/2007/04/want_free_voip_.html this site provides a listing of the ten most frequently used VOIP phone systems. It provides free trials and discounts for many of them, allowing you to try them without any risk.
  2. http://www.skype.com/allfeatures/subscriptions/?region=uscanada&ver=d#mexicanSubscriptionTab is the site that is referenced in the paragraph above. You will see that you can sign up and make calls to over 40 countries for only $12.95/month.
  3. http://www.fcc.gov/voip/ provides a great information resource from the Federal Communications Commission that will help you learn more about VOIP phones.
  4. Google Voice allows you free calls and texts anywhere in the United States and low rates on international calls.

Internet Access

The average cost of internet access is $38/month. Many customers end up paying much more for service. Most people end up being sold on internet services and add-ons that they really don't need. A basic, high-speed connection from Quest will only cost a person $14.99. For those who don't need high-speed internet, free internet resources are available. If a twenty year old decided to switch to a basic, high-speed package from his/her average priced internet, the savings could be worth over $375,000 at retirement. If he/she decided to use one of the free internet services, this decision could be worth over $700,000 at retirement.

  1. http://www.all-free-isp.com/ is a great resource that allows you to search for free and low cost internet service in your area.
  2. http://www2.whitefence.com/order-now-wfi.html?mcId=8 is a site that allows you to shop for cheap, high-speed internet service in your area.
  3. https://fiber.google.com/about2/ is a site that will allow you to check and see if you are eligble for Google Fiber. Google Fiber is an internet service that is either free for several years after paying the installation fee of about $30 or receive a rather low rate for very fast internet.

Newspaper Subscription

While newspaper subscriptions have been declining in recent years, millions of Americans still enjoy receiving a copy of the newspaper each day. While many Americans already receive a good deal on their Newspaper subscriptions, others pay about $1.00/day for their Newspaper. Fortunately, there are now many resources that allow individuals to stay abreast of current events that reduce or eliminate this expense. Most news can now be found on the internet free of charge. For those who prefer a hard-copy of the paper, discount subscription sites help individuals get a great deal. For a twenty year old who decided to stop paying $1.00/day for a paper and decided to get his/her news online, this decision could be worth nearly $700,000 by retirement.

  1. http://www.slate.com is a great site that allows you to sign up for a daily email review of all of the nation's major papers. You will likely receive better coverage of all major items in the news than you would from a single paper.
  2. http://www.discountednewspapers.com/ is a great site that ensures you receive the finest deals available on the papers you want to subscribe to. Simply type in your zip code and see if you are paying too much for the paper your currently subscribe to.

Magazine Subscription

If you are paying the cover price for any magazine subscriptions, it is likely you are paying too much. Research has shown that magazine companies don't expect to successfully charge the cover price. This price is used to help psychologically create the perception that the magazine is a truly valuable resource. A recent Media Life Magazine study uncovered that, in one category of magazines, the savings on all magazines in the category ranged from 35% to 77% off of the cover price. If a 20 year old, who subscribed to 3 magazines with a cover price of 3.50/magazine decided to investigate the possibility of saving just 50% of the cover price for each of these magazines and invested the savings, this decision could be worth over $110,000 at retirement.

  1. http://freebies.about.com/od/magazinesubs/Free_Magazine_Subscriptions.htm allows you to get completely free subscriptions to a wide range of magazines. Go see if any of the magazines you are currently paying for are available here for free.
  2. http://www.getrichslowly.org/blog/2007/02/14/save-money-with-a-magazine-exchange/ explains how to successfully set up a magazine exchange with neighbors and friends. This is a great way to save and better get to know the people around you.
  3. http://www.magazines.com/ is a great sites that allow you to search for the best discounts on magazine subscriptions.
  4. http://www.smartmoney.com/spending/deals/magazines-for-less-18354/ provides a listing of lots of great places you can purchase discount subscriptions.


FOOD

Menu Planning/Groceries

The average American family spends a large percentage of their income (about 13%) on groceries. That translates into an average of $160/month per person. For a family of 4 children and 2 parents, that means average food expenditures total roughly $1000/month. Research has consistently shown that, through appropriate planning, families can save more about 50% of the amounts they spend on food. To be conservative, we will assume that a family saves only 25% of the amount they have been spending on food. If a 30 year old couple with four children decided they would implement the simple suggestions necessary to save 25% of their food bill, this decision could be worth over $1,600,000 by retirement. Start at these useful links to find some of the best, easiest strategies for reducing the amount your family spends on groceries and make a Million Dollar Decision today.

  1. http://www.mealsmatter.org/MealPlanning/index.aspx Set up your meal plans well into the future using a very intuitive tool. Planning ahead using this tool will help you avoid last minute meals and impulse buying, saving you tons of money!
  2. http://www.ppgazette.com/ This neat, free site that allows you to sign up, compare local stores and their sale prices, and then immediately search for coupons you can use to reduce prices even further. If you click on details underneath a product it shows its price history. Best of all, it is completely free of charge!
  3. http://www.fool.com/personal-finance/saving/2008/07/31/six-ways-to-save-on-groceries.aspx Estimate how much money you can save by following six easy tips, none of which involve coupon clipping.
Click here to view original research completed by Professor Marsh's students that documents potential savings of up to 52% from following a nutritionally adequate two week meal plan. For a family of 8, this could mean savings of as much as $12,345/year.

Eating Out

For many people, eating out is a meaningful family ritual that draws them closer together. Nevertheless, eating out can be extremely expensive. The average American family spends over $2500/year eating out. Fortunately, there are many possible ways that a person can save on dining out. If a 25 year old made cumulative decisions that allowed him/her to save half of the average $2500/year spent on eating out, this decision could be worth more than $1,225,000 at retirement. Click on the links below to see how you could begin to save on restaurant bills.

  1. http://abcnews.go.com/GMA/AmericanFamily/story?id=1020055&page=1 provides a great article that explains how a person can save up to 94% off the price of eating out.
  2. http://www.restaurant.com/ allows a person to save a large percentage of the cost of eating out by purchasing discounted gift certificates.
  3. http://copycat.cdkitchen.com/ if the restaurant experience is not really that important to you, but you just love the taste of the food, you will love this website. Learn how to inexpensively make the food you buy at restaurants for a fraction of the cost.

Vending Machine Snacks

The average vending machine snack costs $1. If a person purchases a snack every day at work, they would pay $260.00/year on vending machine snacks. Research has shown that it is relatively easy to save the cost of these expenditures. Professor Marsh did his own study comparing the cost of 7-11 (comparable to vending machine mark-ups) with purchasing snack items in bulk at Costco. The mark-ups were as high as 215%. If a 20 year old could save just half of the $260.00/year he/she was spending on vending snacks, this could be worth nearly $235,000 at retirement. Use the links below to learn more about this savings possibility.

  1. Vending Machine Snacks vs. Costco Snacks Click here to see a portion of the study Professor Marsh did comparing the prices of snacks at Costco versus those purchased in convenience stores. See how easy it is to save and still enjoy the great snacks you enjoy so much.
  2. http://finance.yahoo.com/banking-budgeting/article/103379/Top-10-Money-Drains Spending money on vending machines was listed as one of Bankrate's top 10 money drains. See what they said about this spending category right here.

Coffee

Many people believe they absolutely need a coffee to get going in the morning. Unfortunately, getting this jump start can be quite expensive. The National Coffee Association reports that the cost of brewed coffee is $1.38 per day. If a person buys a coffee each day of the year, this costs him/her about $500/year. Fortunately, a large portion of this expense can be saved by a smart person who decides to brew his/her own coffee. If a 20 year old decided to brew his or her own coffee (costs about 25 cents per day), he or she could have nearly $950,000 saved by the time he/she retired. Explore the resources below to see how you could save.

  1. http://www.ehow.com/how_415_brew-pot-coffee.html contains the directions for brewing a perfect cup of coffee at home. Related articles on the side of the page teach you how to make an espresso, caffe latte or caffe Americano.
  2. http://www.hughchou.org/calc/coffee.cgi is an interesting calculator that lets you calculate how much you could save on coffee given the investment and age assumptions you would like to use.


INSURANCE

Term Life Insurance

Life insurance can be quite expensive, but that doesn't mean you have to or should go without it. That being said, because life insurance commissions are some of the highest out there, often life insurance agents don't have your best interests at heart. Many people end up paying far more than they need to pay for life insurance. There are basically two types of life insurance: term life insurance and investment life insurance. Investment life insurance is always more expensive than term life insurance. For most people, term life insurance is the better option. Generally, the premiums for cash value policies can be 2 to 3 times as much as those for term coverage. For a twenty year old who cancelled his whole life insurance policy and chose to instead use term4sale.com to find the cheapest term policy, this decision could be worth nearly $850,000 at retirement.

  1. http://www.naic.org/documents/consumer_guide_life.pdf This is a great resource from the National Association of Insurance Commissioners that will help you better understand life insurance and what you are really getting.
  2. http://money.cnn.com/magazines/moneymag/money101/lesson20/index.htm This is a great article explaining why term life insurance is generally a better deal.
  3. http://www.term4sale.com/ is one of the finest tools for finding the best rates on term life insurance. See how much you could save today. The nicest part is that the site is not trying to sell you anything.

Homeowner's Insurance

Homeowner's insurance is an extremely expensive component of your budget, but it is one you should definitely not go without. For many people, their home is their largest asset and it must be carefully protected. This being said, it is very possible you are paying far too much for your homeowner's insurance coverage. The state insurance commissioners of most states produce a comparative listing of homeowner's insurance prices. For a $225,000 brick home in Utah, yearly premiums for the same coverage range from a low of $396 to a high of $908. If a 25 year old was able to save just half of this difference each year and invested the savings, this decision could be worth over $250,000 by the time he/she retired. Follow the links below to learn how you can save on Homeowner's insurance.

  1. Insurance Rate Information by State Use this great resource to find your state's insurance department rate information. This is the best, most objective, place to begin your comparison shopping for Homeowner's insurance.
  2. http://www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm This is a great guide from the Insurance Information Institute that gives you twelve great tips for further reducing your house insurance premiums.
  3. http://www.privacyrights.org/fs/fs26-CLUE.htm is a great site that helps you understand more about CLUE reports and how avoiding small claims can help you lower your insurance premiums.

Limited Insurance Policies

The insurance industry is a big business. If you have ever seen the headquarter buildings for large insurance companies, it is very evident that the business is very profitable one. Insurance firms are constantly coming up with new insurance products. Often, these products are ones you don't really need. By cancelling unnecessary insurance policies, you could potentially save yourself a lot of money. Consumer Reports has identified 10 types of policies a person does not need. If a 25 year old, who had each of these types of policies decided to instead cancel them and invest the savings, this decision could be worth over 5 million dollars. Click on the links below to determine how you could save.

  1. http://articles.moneycentral.msn.com/Insurance/AvoidRipoffs/10kindsOfInsuranceYouProbablyDontNeed.aspx?page=2 is another article that identifies even more types of insurance you could likely do without.


DEBT/CREDIT MANAGEMENT

Interest Charges on Credit Card

According to a survey released at the end of May 2008, the median amount of credit card debt carried by Americans is $6,600. The average interest rate on a standard card is about 13%. Making the minimum payment each month, it would take 250 months (almost 21 years) to pay off the debt and cost $4,868 in interest. If a 20 year old was able to instead find a card with only a 7% interest rate, he or she could instead be completely out of debt in less than 10 years. If he/she then chose to invest the savings until retirement, this could be worth nearly $500,000. Explore the links below to see how you could save on credit cards.

  1. http://www.indexcreditcards.com/ is another good index of credit cards by type. Start your search here. Newsweek magazine called this, "As comprehensive a list as you'll find of all the credit card offers on the table now."
  2. http://www.federalreserve.gov/pubs/shop/default.htm Credit card terms can be complicated. This great publication from the Federal Reserve breaks things down and makes them very understandable.
  3. http://www.powerpay.org/ is an awesome site that provides information on how to get out of debt quickly following an accelerated debt reduction plan.

Mortgage

If you have a mortgage, it is likely your mortgage is one of the largest components of your monthly budget. The average household pays $16,000/year for their home. A large percentage of this amount is their mortgage payment. Interest rates have plummeted recently and it may be time to consider refinancing your mortgage to get a lower rate. Mortgage rates have never been as low as they are right now in the last 40+ years. If a person who had taken out a 30 year mortgage in 2006 when then were 25 for $255,000 refinanced this mortgage at today's low rates, they could save nearly $450/month. If they invested this savings, this would be worth nearly $3.5 million. Use the tools below to see how you could save on your mortgage costs.

  1. http://www.bankrate.com/mortgage.aspx this calculator allows you to find the best possible refinancing rates available in your area.
  2. http://www.bankrate.com/brm/news/cheap/331ways/Home/mortgage.asp provides a listing of great tips that will help you reduce your mortgage payments. Some of these tips even apply to those who don't want to refinance their home.

Accelerated Debt Reduction

The average American family can be completely out of debt in seven years through following a debt acceleration plan. A 30 year old making monthly payment of $2500 dollars, who was able to get completely out of debt in eight years, would potentially have over $4.3 million dollars by retirement. Fortunately, an ADR plan is easy to follow and set up. Find out how using the tools listed below.

  1. http://www.powerpay.org/ This is a free, non-profit site set up by Utah State University to help individuals with the accelerated debt reduction process. This site will allow you to set up a personalized debt acceleration chart and document your savings. You create a personalized login and password so you can save your chart and update it as you make progress.
  2. http://truthfullending.com/debt-consolidation-calculators/debt-free-calculator/ is a site that allows you to set up a calculator on a one-time basis. This is a good tool that will help you see if you would like to follow an accelerated debt reduction plan.

FICO Score Management

Many people have never even heard of their FICO score, but your FICO score is important for your financial success. These scores determine, among many things, whether or not you will be extended credit and what rates you will be charged, whether you will be extended many types of insurance coverage and what your premiums will be, whether or not an employer will employ you, and whether your will be allowed to rent a home. Learning to manage this score properly can save you a lot of money. For example, for a 25 year old with a 30 year mortgage, the difference between a credit score in the range of 620-670 and one with a score in the range of 720-850 would be $340 per month. By investing this savings, the 25 year old with the higher score would potentially have over $4,000,000 by retirement. Use the links below to see how much you could save.

  1. http://www.myfico.com/myfico/creditcentral/LoanRates.asp is a neat calculator from the creators of the FICO score that effectively shows how much money you can save by having a better FICO score.
  2. http://www.pueblo.gsa.gov/cic_text/money/creditscores/your.htm is a government publication explaining how important credit scores actually are.
  3. http://www.myfico.com/Downloads/Files/MyFICO_UYFS_Booklet.pdf is a great booklet that helps you understand how to increase your credit score through time. This is a great article.
  4. http://www.creditkarma.com/ This site allows you to get your credit score for free. It is a neat resource.


EXPENSE TRACKING

Where Are You Spending Your Money?

Research has shown that most high-net worth individuals become very good at understanding how and where their money is being spent. This understanding helps them to discover new ways in which they can save money. While the process to track expenses can be tedious, fortunately there are numerous tools that can substantially simplify the process. Explore some of our favorite tools below to learn how you can begin tracking your expenses and disco. While we can't estimate the potential value of the savings you might find, we do know it is virtually limitless.

  1. http://www.mint.com/ This site allows you to keep track of all your finances in one single place for free. We feel it is likely the best of the budgeting utilities out there on the internet.
  2. http://www.moneytrackin.com/ is another very functional utility.


FAMILY

Childcare Expenses

Child care expenses can really add up for many two-income families. In fact, many people are surprised to learn just how little a second income actually adds in terms of take home income after paying child care and other extra expenses. Fortunately, there are several creative ways to save on child care costs. For example, if your employer offers a flex spending account, you can you the cost of child care expenses with pre-tax dollars. In Utah the average cost of child care for a single child is nearly $5000 dollars per year according to USA today. If a 25 year old was in the 35% tax bracket and used a flexible spending arrangement to pay for healthcare, this decision could be worth nearly 2.75 million dollars by retirement. Use the links below to discover how you could save.

  1. http://www.thestreet.com/story/10359665/1/10-ways-to-reduce-child-care-costs.html discusses ten ways a family can cut its child care costs. The story also provides a link to a calculator that allows a family to quantify the benefits/costs of having a two income household.
  2. http://www.aupairinamerica.com/ This is a fairly creative strategy for those with larger families. Au pairs are basically nannies from foreign countries that come and live with your family. Using an Au pair can save families with lots of children big money. They usually charge by family, not by child.

Travel

The average vacation cost, according to a 2008 AAA study, for two adults traveling together in the United States was $244/day, just for lodging and meals. With children, this cost would be even higher. Assuming a couple spends just one week on vacation in a year, this vacation would cost $1708, not even including travel expenses. What if a 20 year old decided he would find ways to save a portion of his/her vacation costs. If he were able to save half of the cost of vacationing each year, this could ultimately be worth over $1.5 million to him/her. Explore the links below to learn how you can save on travel.

  1. http://www.kayak.com/ This is likely the best travel aggregator site available on the internet. Effortlessly look for the finest deals on flights, hotels and cars from a huge number of travel sites.
  2. http://www.msnbc.msn.com/id/24859538/ is a great article about a novel idea, the staycation. You could save a ton of money by implementing this simple suggestion.
  3. http://www.voyij.com/ searches hundred of websites to give you last-minute deals on hotel rooms, flights, and other vacation packages.
  4. http://www.farecast.com/ is a great site that uses data mining to see if air fares to the destination you are planning to visit are likely to rise or fall.

Education

The average cost of an education increases each and every year. For many individuals, paying for their childrens' educations can cost them 100's of thousands of dollars. The average cost of a private education in 2008-2009 was $25,143, and this number is increasing each year. Unfortunately, many individuals feel it is necessary to deplete their retirement savings to pay for the education of their children. Fortunately, there are intelligent ways you can adequately prepare for and reduce the large expense that is paying for an education. Explore the resources below to determine how much money you could potentially save.

  1. http://www.collegesavings.org/index.aspx One great way to make sure you don't have to deplete your retirement savings to pay for college is beginning to save early. Find information on each state's 529 savings plan at this link and learn the many benefits of putting money away in one of these plans.
  2. http://www.morningstar.com/529/529Table.html Find information from Morningstar on the performance of each 529 plan so you can pick the finest plan.
  3. http://www.students.gov/STUGOVWebApp/Public?topicID=20&operation=topic provides information on a slew of great educational resources available from the government. Find information about government grants, work study and other types of aid that can reduce the cost of your education.
  4. http://www.students.gov/STUGOVWebApp/Public?topicID=16&operation=topic contains an impressive index of scholarships available. A little work can save a huge amount of money.


ENTERTAINMENT

Movie Entertainment

The average price of a movie ticket in 2008 was $7.18/ticket. Taking your whole family to the movies could certainly be quite expensive. 1.363 billion movie tickets were sold last year in the US. This means that the average American went to the movies about 5 times during the course of the year. This area of the budget is one where a person can save a substantial amount of money, without having to sacrifice the fun of watching video entertainment. If a 25 year old couple with two children decided that they were going to find a way to reduce their movie expenditures by only 50%, this decision could be worth nearly $150,000 by retirement. Explore the links below to see how you could save a substantial amount on video entertainment.

  1. http://www.redboxcodes.com/codes Redbox already provides a great deal with $1 video rentals. Use this website to find Redbox codes and get Redbox movies for free.
  2. http://www.hulu.com/ has a large collection of free movies that you can access without any charge right from your computer.

Cable Television

The average American cable bill was $58.44/month last year. Many people are likely paying too much for their cable. Many people are finding they can do without cable all together due to the proliferation of sites on the internet offering free entertainment content. If a 20 year old person was able to save half of his $58.44/month bill, this decision could be worth nearly $650,000 at retirement. Use the links below to save money on your cable television bill.

  1. http://www2.whitefence.com/order-now-wfi.html?mcId=7 allows you to conveniently comparison shop for cable television service. See how much you could save here.
  2. http://www.hulu.com/browse/alphabetical/tv gives you the ability to watch 100s of different television shows via the internet for free.
  3. http://websearch.about.com/od/freedownloads/qt/freemovies2.htm and http://www.cucirca.com/2007/02/21/13-places-to-watch-tv-online-for-free/ both provide free listings of places where you can watch TV and movies online for free.


HEALTH

Gym Memberships

Data from costhelper.com reports that the average gym membership usually costs about $40/month. Research has shown that most people don't use their gym passes regularly. If a 20 year old individual decided that he would use the tips in this section to save his gym pass expenses, this decision could be worth over $850,000 dollars at retirement.

  1. http://www.ehow.com/ Ehow.com has videos of numerous home workouts that can be completed very inexpensively. Just do a video search for Home Workout. There is even a video of how to get a workout using a Nintendo Wii. There are 1230 home exercise videos on the site.
  2. http://articles.moneycentral.msn.com/SavingandDebt/ConsumerActionGuide/HowToQuitTheGymOrAnything.aspx?page=1 is a great article that will provide you with instructions for how to get out of your gym contract so you can start saving sooner.
  3. http://www.craigslist.com/ provides a place where you could easily sell your gym memberships early.

The Wealth of Great Health

Average healthcare expenditures in the US/household were over $2800 in the last year. A large proportion of these expenses are avoidable using the links below. If a 25 year old were able to save half of the average amount each year, this decision could be worth nearly $1.4 million at retirement. Explore the links below and learn how to save money.

  1. http://www.medgle.com/ provides a sort of online doctor (for informational purposes only) that can help give you a good idea of what is wrong with you before you go to the doctor.
  2. http://www.hospitalcompare.hhs.gov/Hospital/Search/Welcome.asp?version=default&browser=IE%7C7%7CWindows+Vista&language=English&defaultstatus=0&pagelist=Home is an online tool from the US Department of Health and Human Services that allows individuals to determine which medical facility is best for a particular condition.


FEMALE HYGIENE

Manicures

According to data from costhelper.com, manicures can cost anywhere from $10-$85. If you get a manicure every two weeks and pay the average price of about $30 per manicure, you could pay nearly $800 for manicures each year. You can, however, get a great manicure without paying nearly as much. If a 20 year old were able to save the cost of manicures over the course of her life, this decision would be worth nearly 1.5 million at retirement. Use the links below to see how much you could save.

  1. http://www.ehow.com/nail-art-and-care/ This series of free articles shows you how to give yourself a great manicure at home, saving you a huge amount of money each year.
  2. http://www.costhelper.com/cost/health/manicure-pedicure.html contains information on how you could save money by going to a smaller nail salon. The average cost of smaller salons is less than half of the average price for a manicure.

Haircuts

According to the Professional Beauty Association, the average cost of a haircut is about $45.00. If you get a haircut every other month, this means you will spend $270.00/year on your hair cuts. If a 20 year old were able to save this expense, this would be worth nearly $500,000 at retirement. Use the tips below to figure out how you can save this expenditure.

  1. http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/HaircutsAndCarRepairsOnTheCheap.aspx?page=1 is a really good article on how to save money on everything from hair cuts to auto repairs.
  2. http://www.frugal-living-tips.com/frugal-beauty-haircuts.html is a great site with a lot of different tips on how to save money on haircuts.


INVESTING

401(k) Fees

Though the name sounds technical, a 401(k) is simply a type of retirement account set up by an employer that allows an employee to make tax-deferred contributions. 401(k) accounts have two large tax advantages: 1) The contributions are not taxed until the plan participant begins making withdrawals and 2) The contributions lower the plan participant's amount of adjusted income, lowering their tax liability.
Many employers also offer to match a percentage of income that an employee contributes to a 401(k). The combination of tax savings, free money from employers, and the fact that contributions are withdrawn automatically, makes a 401(k) an excellent investment vehicle.
If you are like many Americans, it is likely you have recently seen your 401(k) decrease in value. What you may not be aware of is that many 401(k) plans have very high fees charged within them. Why is this important? Well, 1% extra fees can actually, over time, just about cut in half the amount of money you would have in your 401(k) by retirement. Use these links below to discover more about the fees being charged in your 401(k) plan and learn what you can do about them.

  1. http://www.freeerisa.com/default.asp This tools allows you to search for free fee data for 401(k) plans. You are required to register, but registration data is free. This is a great way to get information about the fees, some hidden, that your 401(k) plan is charging you.
  2. http://www.kiplinger.com/magazine/archives/2008/05/hidden-401k-fees.html?kipad_id=2?kipad_id=2 talks about 401(k) expenses, how you can calculate those your plan is charging, and what you can do if these fees are too high.
  3. http://www.dol.gov/ebsa/publications/401k_employee.html is a great guide from the Department of Labor that discusses 401(k) fees in easy-to-understand language.

Mutual Fund Expenses

All mutual funds are not created equal. Some offer fees that are much higher than others. Often, unfortunately, it can be difficult to figure out the costs charged in a mutual fund. Fortunately, using the tools below you can easily figure out what kind of fees are being charged in a mutual fund investment. A 20 year old with a $25,000 401(k) balance, who was charged 1% additional fees in a mutual fund (total return of 11% instead of 10%) could have nearly 2 million less in his 401(k) at retirement. Use the great tool below to learn more about the fees charged.

  1. http://apps.finra.org/Investor_Information/EA/1/mfetf.aspx is a great tool provided by FINRA that allows you to assess the fees in a 401(k) before investing in it.
  2. http://www.sec.gov/answers/mffees.htm is a great guide to understanding mutual fund fees.