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YOUNG, BROKE, AND FABULOUS: MY PATH TO FINANCIAL STABILITY
One Broke Girl

Fearing the wrath of her father, the author, a D.C. journalist, writes under the pseudonym “one broke girl.” Her mission? Get out of debt, and through that journey show other 20-somethings how they can, too! #onebrokegirl

The certified financial planner wants to meet at Starbucks. I’m not sure if discussing the student loans and credit card bills I’ve amassed over $4 lattes seems like the most prudent idea, but he is the expert. Me? I’m an idiot.

At 26, my debts are mounting while my savings account remains constant. By constant, I mean zero. I honestly don’t know where most of the money has gone over the years. The trail runs through my closet, which could easily double as the Anthropologie sale rack. But then it runs cold. That’s my problem: I’m careless with money. Always on the go for my job or grad school. Grabbing lunch here, dinner there, a cab ride to connect the dots around town. Stocking up on groceries without being price conscious. I don’t party excessively, but it’s easy to blow $40 in just a couple of hours at a bar in Washington, DC. If I had budgeted better – or at all – I wouldn’t need to put that $40 on a credit card, groaning inwardly.

I recently got a new job that came with the significant raise that I’ve been working hard for. My parents are getting older and I want to shoulder more of the financial responsibility for my undergraduate loans – back when I was 18, we had agreed to split the debt. I want to save for a down payment on a condo or my ultimate dream, a row house in DC. I can’t do any of these things and more if I keep living paycheck-to-paycheck and playing with balance transfers as I hover near the top of my credit limits. Which brings me to Starbucks.

Ashamed at throwing yet more money away in front of the financial planner, I buy the cheapest drink on the menu and sit across from Kris Persinger, a youthful fatherly type dressed in a red waffle weave shirt and small glasses. I think of my father some 300 miles away, unaware of this conversation and the credit card portion of this show.

“Do you have kids?” I ask. He nods. “Do they know how to financially plan for themselves?”

“Well, she’s five-and-a-half,” he says.

“She’ll get there, right?”

He laughs. “I hope so. She likes her monies.”

“Monies. I like my monies, too.”

I lay out my student loans for Kris. The biggest is in my dad’s name and has a balance of 40 grand. It carries a daily interest rate of 6.25% and the monthly payment comes to about $300. Then there’s a quarterly federal Perkins loan that we’ve whittled down to around $5,000. Interest on that accrues at 5% per year. That bitch Sallie Mae lords over my last four loans, which total $12,000. The two smaller portions have a daily interest rate of 2.39%, and the two larger ones accrue interest at a rate of 6.80% every day.

I’m supposed to send my dad a check every month to help with all of the loan payments, but I’ve slacked off recently, with his consent, even his encouragement, due to an onslaught of mid-twenties weddings. At this point, I should have the HR department at work sign the checks over to my friends (I swear, I love you all and otherwise bask in your happiness!). But here’s what I’m more ashamed to admit: I’ve slacked off before. At times when rent and car insurance and yes, secret credit card bills have overwhelmed me, he has let a month or two or more go by with no check. He deserves better. And that normally loving man will kill me if he finds out. Or reads this. Credit card debt is not just frowned upon back home. My dad would turn from Bruce Banner into the Hulk in about five seconds flat, if the Hulk had a mustache left over from the 1970s. This has to stop.

I pull up the credit cards for Kris. There are only two of them, but they have been swiped almost to their limits. I’m careful to hover at least hundred or two hundred dollars below. Right now, the Bank of America Visa card is at $6,921.28 out of $7,000. The annual interest rate is 13.99%.

“Oh my God,” he says.

The second card, though, is what really gets him. It’s a Banana Republic Visa that I discovered could be used anywhere. Or rather, everywhere. Even though the balance is smaller – just $5,809.81! – the annual interest rate is 23.99%. Which Kris calls “obscene,” albeit legal.

The good thing is that I’ve never been late on any credit card payments, and I always pay more than the minimum. Although the high balances will hurt my credit score – I’ll learn more about that later – that’s one gold star on my report card. Another, perhaps more significant boost comes from my 401(k). I may not have been putting money into a savings account, but I have been directing the maximum percentage of my salary before tax to retirement since I joined the workforce. I have more than $26,000 in there, and my new job is matching the 6 percent of pre-tax dollars I’ve allocated.

Kris says I could borrow up to 50% of my 401(k), as there is only a penalty for withdrawals before the retirement age, not for loans. But I’m not at that point yet, he says.

In fact, he doesn’t think I’m as ruined as I think I am.

“It feels bad to you because the numbers relative to your income seem high, but if you were a foreign country that’s been in the news lately, you would be more like Spain, not like Greece or Portugal,” he says. “Your total debt, when you add it up, is a little bit more than your income, pre-tax. So I mean, it’s serious, but you haven’t ruined your financial life at age 26.”

My take-away: I’m only as fucked as Spain and not Greece. I hear Spain is lovely this time of year. But I wouldn’t have enough credit to get there.

Credit Woes and Personal Loans

Now how do I go about un-fucking myself? I never thought those words would come out of my mouth. If you think I’m ashamed to admit my debts to my father, to my friends, to anyone, I cannot imagine disclosing this to someone I’m dating – especially if the relationship got serious. “Honey, we can’t get a mortgage at a decent interest rate because of all those hot high heels I bought to impress you. And look: It worked!”

Once upon a time, Good Morning America’s consumer correspondent also had a love affair with shoes and such. Elisabeth Leamy managed to trade her financial woes for financial stability, so perhaps there’s hope for me yet. She racked up a couple thousand or so in credit card debt in her twenties. When she confessed the debt to her parents, they paid off the bill. Then she did it again. This time, she had a boyfriend “cracking the whip” to get out of debt and teaching her how to invest: Kris Persinger.

I already have an autographed copy of Elisabeth’s book, Save Big: Cut Your Top 5 Costs and Save Thousands, a gift she passed through Kris, when I meet her to talk about how I can stop spending and start saving. Big, apparently.

She echoes a lot of the advice Kris gave about eliminating that high interest credit card as soon as possible and otherwise trying to increase my cash flow. Back when she had credit card debt, she would pre-address envelopes to the credit card companies and send a check any time she had extra money. Fun fact: Increasing the frequency of payments also reduces the average daily balance on which the interest is due.

I should ask the credit card companies to lower my interest rates, Elisabeth says; often a quick call can shave off a percentage point or two. But why not aim bigger?

“All 20-somethings should be considering credit unions,” she says. “To me, it’s a very 20-something ethos that a credit union has.”

These not-for-profit organizations are there to financially support their members rather than make money off them. Often credit unions can offer credit cards at much lower interest rates than what is out there in the for-profit banking world. I could roll over my current balances onto a low interest card and pay it off. Save big!

So I take Elisabeth’s advice and march myself down to the Congressional Federal Credit Union, which I have access to as a credentialed Capitol Hill reporter. But there are thousands of credit unions across the country. Many companies have credit unions, including both my current and former employer. Now I’m presented with two options: a low interest credit card and a personal loan. The loan appeals to me more – the last thing I need is another juicy open line of credit. And the loan would reflect more favorably in my credit score. However, Elisabeth cautioned that I would probably need collateral for the loan, though not as much as a bank would require.

It turns out that my credit score – the official FICO score used to determine creditworthiness – is higher than I thought. For less than $40, I order reports from two of the major credit bureaus via www.myFICO.com and get a score of 717 from TransUnion and 727 from Equifax; it appears that the number will vary somewhat from bureau to bureau. Elisabeth’s book compared credit scores to SAT scores: “It’s a three digit number that sizes up your potential – only it’s your potential as a customer rather than a college student.” The top score is 850, but I fall in the same category as 18% of the U.S. population. It’s a decent score, but the book notes that lenders began giving the best rates to people with scores starting at 720 and perhaps as even high as 740 after the credit crunch of fall 2008. I’m right on the precipice.

Nevertheless, I apply for a $13,000 personal loan – just enough to cover my credit card debt – at an interest rate that will be determined by a credit check and the length of the repayment period. I also apply for a credit card that has an interest rate almost three times lower than that “obscene” Banana Republic card that made Kris shudder. I can use the new card for emergencies.

The credit union approves me for both almost immediately. The personal loan, though, is my savior. At $402 a month, I’ll have the loan paid off in three years. I was already paying $400 or more monthly to my credit cards – and then getting charged hefty interest. One step forward, two steps back. The loan, though, carries an interest rate of just 6.99%. I’ll be free of all credit card debt in 36 months.

But not everyone is thrilled with this option.

Did I Do The Right Thing?

What personal finance writer Zac Bissonnette worries about is the “psychological” impact of a lowered interest rate.

“I cringe, but there is something to the idea that having the debt at a high-interest rate keeps you more focused on it,” he says.

Zac is two years younger than I am. He has no debt and two books to his name:

Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents and How to Be Richer, Smarter, and Better-Looking Than Your Parents. Basically, I want to figure out how to become this guy. He’s doing everything right and I’m doing everything wrong.

I’m inclined to agree with Zac on the interest matter. Frankly, he thinks the credit card issue is overblown – student loans are doing us youngsters disproportionately more damage. But I need to knock out these credit cards so that I can ratchet up my student loan payments, and even he agrees that consolidation – legitimate consolidation through my new credit union – makes sense with the amount of debt I have.

He says I just can’t relax about it. And he’s not the only one to give me that advice.

Michelle Singletary, author of The Color of Money, the Washington Post’s nationally syndicated personal finance column, warns that she has seen people clear out their credit cards through personal loans – and then rack up the cards again.

“I’m a huge fan of pain,” she says. “Experience the pain. If you experience the pain of painstakingly paying off stuff, hopefully that memory will last long enough that you won’t do it again.”

But I didn’t really seek out Zac and Michelle for their feedback on my loans; I’ve turned to them for advice on how to budget.

Zac’s advice is simple: drop the budget.

“I don’t think budgets are necessary for most people,” he says. Most people aren’t going to follow their budgets, so why bother? Instead, I should be automating the highest priority expenses in my life, such as rent, retirement, and student loan payments, and then “live on the rest, no matter what.”

“If you do it that way, you don’t need to have a special category in your budget, you know, a line-item for Q-tips,” he adds.

I can see the wisdom in that. I already have automatic withdrawals from my paycheck for my 401(k) and never think about the extra money I’m not seeing. It would be just as painless if I did the same for other savings accounts and expenses. And it takes away from the guilt of spending whatever is left over because that’s mine to use at my discretion. Spending $50 on a pair of shoes once all your obligations are taken care of is different from blowing $50 on the same item while debts languish.

Frankly, I don’t trust myself to get to that point. And Michelle says budgets are essential.

“You have to have a written plan for what’s coming in and what’s going out,” she says. She doesn’t care how I do it, as long as it’s done.

So where does that leave me?

“You’ve got to just sit down and go, ‘What do I want to do with the money that I’m working so hard to earn?’”

Budgeting, Or Chicken Soup for the Irresponsible Soul

Yes, that question should be flavoring all my future financial decisions. But I still don’t know the practical ways to track and set limits for myself across various categories of expenses. I need someone to tell me just how much I should be earmarking for food, for housing, for savings.

Janet Al-Saad, managing editor of Mint.com and Quicken.com, says that budget experts generally recommend spending no more than 30% of your take-home income on housing and no more than 15% on servicing debt.

I just did the math – no small feat for a journalist – and it looks like my rent takes up 40 percent of my paycheck.

I think about something Michelle Singletary said – you need to live like a student if you have student loan debt. But even the two bedroom apartments I could share with a Craigslist roommate are only a couple hundred dollars cheaper than what I’m paying now and still amount to more than a third of my income. Unless I go the group house route, it looks like the best I can do is trim as many percentage points as possible.

While there’s something to be said for living like a student, I know myself better than the financial experts in this regard. I’m afraid that I won’t be able to get the writing done that I’m relying on for extra income if I’m living with multiple housemates and no guarantee of quiet. And like Danny Glover, I’m too old for this shit. I’ll just have to actively look for the cheapest studio I can find, even if that means compromising in terms of location and amenities.

The debt cap is even more unrealistic than the one for housing. I don’t bother calculating it – my student loans and credit cards together just about total my approximate income before taxes. Thank goodness for the new job, or my debt would significantly outpace my income.

Maybe I should have taken proactive steps to avoid student loan debt. Zac Bissonnette encourages young people – and their parents – “to not be so linear” in choosing higher education.

“The idea that spending $50,000 a year is the most efficient way of finding opportunities is a hard one for me to swallow,” he said in our interview.

But sometimes it is, and I don’t regret the choice I made to pick “the most expensive school in the universe,” as Kris Persinger had called my alma mater. Zac was right – there are many different routes to get where you want to go in your career, and oftentimes you end up in a completely different place than what you imagined at 18. But when I was 18 I said I would go to Washington and become a political reporter, and damn it, I did it – for better and for worse. Then again, I know other Washington reporters my age who have reached great heights of success without the undergraduate debt I’m buried under.

At least I’m not going to law school now, I think as I pat myself on the back. A creative writing graduate degree – now that will open all sorts of doors to financial success in the vibrant publishing industry! I suppose I could defer some of my loans while in grad school (but likely not others since I’m only in school part-time). It’s never been a consideration, though. Deferment may be prudent for other 20-somethings enrolled in a full-time graduate program. I have been able to continue working the entire time, though. Luckily – or shrewdly – I’ve sought out jobs with generous tuition reimbursement programs. Why prolong the pain when I don’t have to?

With seemingly more 20-somethings than ever getting themselves into layers of school debt, Janet recommends doing a cost-benefit calculation before embarking on a designer education that could just be vanity. “Will you actually make more money as a result of this degree?” she says we should ask ourselves. Rule of thumb is that you should not take on more debt than what you expect to earn your first year out.” For all the talk about our generation being a bunch of knuckleheads, there is a pervasive attitude of overachievement. GREs, LSATs, GMATs, and a whole bunch of other expensive acronyms profess to be the gateway to the future. Some young people see advanced degrees as the only way to advance their careers, even if they’re unsure about exactly what they want to do. Still others, like myself, might be looking to shift gears. (Turns out being a political reporter ain’t all it’s cracked up to be.) No matter the reason, debt has to be a factor in determining the worth of the degree – and whether it’s worth it to take out more loans.

Janet acknowledges the difficulty of keeping debt payments below 15 percent of income, but it’s important to recognize it as a goal so that young people can take action – negotiate lower interest rates, increase cash flow through waiting tables a couple of nights a week. Me? I freelance.

But before I can begin to claw my way out of debt, Janet says I should stash aside enough money to live for nine months to one year in case I lose my job. Michelle had recommended just 3-6 months of emergency savings unless I have the kind of job that is not easily replaceable. The fund needs to cover not just rent and car payments but utilities, food, cable, and beyond, since it takes people a while to shut down all outlays. Michelle added that I should have a “life happens fund” for car repairs, last-minute travel, and other unforeseen expenses that people tend to pay out of their emergency fund.

That’s all well and good, but Elisabeth Leamy had said that my credit card could function as my emergency fund. It’s certainly not ideal.

“We should all have an emergency fund once we’re financially stable, but you’re not yet,” she said. “Take the sure thing over the possible risk.” The sure thing right now is that I have a ton of debt – and if I’m ever going to free up my cash flow to start saving, I need to eliminate debt now.

Maybe I can’t build up accounts for emergencies and such, but I can do the best that I can when it comes to savings. Janet says I should automate transfers of 10% of my paychecks to a savings account, and when I do the math – math! – that $170 or so every two weeks will add up to over $4,000 in a year. Even I can put $170 aside biweekly, and if I can increase my cash flow by moving to a cheaper apartment, it really won’t make much of an impact.

Meanwhile, I can use Mint.com to help me budget now that I have an outline of how much money I should direct toward different goals. I’ve linked most of my accounts – checking, savings, credit cards, personal loan, etc. – into the free, read-only site. The online tools will help me identify a “base-level understanding” of what I’m currently doing with my money, Janet says. Mint visually tracks my expenditures by category – the green bar across the screen for “Clothing,” “Groceries,” “Mortgage and Rent,” etc. will turn yellow as it nears the cap and red once it crosses over. Using Mint, I can create a budget based either on my personalized needs or on the profile of others in my demographic.

And so can you.

The Bottom Line

So why do I write about this now? Because three weeks ago, when I started this article – or rather, life project – I really thought there was no way out of the debt I created for myself. This is not the part of the article where I turn into a personal cheerleader; it’s going to take a lot of hard work to stick to a budget, to resist temptation. There’s a lot of shame here. I’m generally more than open about everything with everyone, but this is the one subject on perpetual lockdown. I want to let go of the shame and the stress of hiding my debts, and I figure a lot of 20-somethings out there feel the same way. So remember:

- Base decisions off income because that is “the fountain of all the things you can pay for,” says Kris Persinger. When it comes to credit cards, stop using them, but don’t cancel the cards, Elisabeth Leamy says. Doing so will negatively impact your FICO score, which gets a boost from higher amounts of available credit and longer lengths of credit history.

-Zac Bissonnette and Michelle Singletary remind us to Experience. The. Pain. Even if you’re able to consolidate your debts, keep hitting them like you didn’t.

Michelle adds that we don’t have to give up everything. Get your hair done if you want to, or buy that iPad. “But you can’t do all of it.”

“By all means be aggressive about planning out your career and your financial future because things are harder for young people today than they ever have been,” our friend Janet Al-Saad at Mint.com says.

Save. Save. Save. For retirement. For emergencies. For a house and kids and vacations and all sorts of things you should not have to go into debt over.

My long day’s journey into financial stability might not be the same as yours, but feel free to use it as a model. Reach out to financial experts and read their books and articles that can only be far more nuanced than what I’ve presented here. You can do this. (I guess I’m part cheerleader, after all). Just don’t tell my dad.

“Help me find more money in my budget!”
Kristina Mastrocola

From zeroing in on lost treasure to making a few extra dollars on the side, our savvy panel of financial pros share painless ways to put more cash in your pocket!

Read the whole article here

Book Review: 'Save Big: Cut Your Top 5 Costs and Save Thousands!'
Tara-Nicholle Nelson

Book Review
Title: "Save Big: Cut Your Top 5 Costs and Save Thousands!"
Author: Elisabeth Leamy
Publisher: Wiley, 2009; 338 pages; $24.95

If you are a regular reader of this column, you probably already know how I feel about all those personal finance gurus who suggest that a penny-pinching savings of a few bucks here and a few bucks there, depriving yourself of the little lattes and sundry other small joys of life, is the best way to riches. I agree that it's one way -- for sure, those $3.95 expenses here and there certainly add up.

However, I also see how people overspend big time on their homes, mortgages and other big-ticket items on a daily basis -- trimming your expenses on one of these big things can be the equivalent of a lifetime's worth of lattes.

Plus, that scarcity mindset -- i.e., you work so hard and can't buy a coffee here and there -- is both demoralizing and difficult for most people to incorporate into lasting habits.

So, my pump was already primed favorably when I got my hands on the latest book from "Good Morning America" consumer finance correspondent Elisabeth Leamy, "Save Big: Cut Your Top 5 Costs and Save Thousands!" A big book with a big bang, "Save Big" focuses on helping readers cut big chunks out of their monthly budgets by focusing on only five expenses, in line with Leamy's philosophy that "it's better to save a lot of money on a few things rather than a little money on a bunch of things."

Leamy starts with the largest of most households' expenses: housing. And she sure doesn't dilly-dally in getting to the point. The first words you see on the first page of the first chapter are: "Buy a House ASAP." From there, Leamy weaves together proof points for her theory that smart homeownership is a money-saving strategy that allows owners to shelter both their money and their family in one fell swoop, especially given that housing is a virtually inescapable expense.

If you have to pay for housing, Leamy goes on, you might as well pay fixed payments toward something you own and that will go up in value, rather than pay ever-increasing rent payments to a landlord.

While Leamy's housing argument probably overrelies on appreciation and oversimplifies the analysis relevant to housing consumers in markets where buying any home is dramatically more expensive than renting, her basic arguments are valid for most Americans, and her timing strategies and exceptions are valid for people who owe significant debt, are not able to make a geographic commitment or are otherwise not financially ready to buy are sensible and clear.

The next few chapters of the "Housing" section deal with: how much to spend on a home (Leamy espouses using downpayment and being conservative about purchase price to make your mortgage equal your rent, which may be unrealistic for urban or large-market buyers), basic homebuying education, finding the right mortgage and the right real estate and mortgage professionals, cutting mortgage costs and property taxes, and paying your mortgage off early -- any or all of which pose the potential for the homeowner to save thousands of dollars.

The second part of "Save Big" is devoted to money-saving strategies around cars, ranging widely from buying decisions (nothing new here -- buy used, not new; don't buy every couple of years, etc.) to using and negotiating for low-interest, non-dealer financing, to shopping for the best deal on auto insurance and maintaining your car to make it last.

"Save Big, Part 3" is all about credit -- one of the things consumers least think about when determining how to cut expenses. Leamy provides powerful examples of how increasing your credit score can save you thousands of dollars in interest, then coaches readers through a primer on credit scores and how they are calculated; how they can protect and improve their credit scores in both the short and long term; and how to reduce or eliminate debt.

Leamy concludes "Save Big" with sections on saving on groceries -- really, on all retail purchases -- and on health care, including how to choose an insurance plan and even how to schedule appointments to make the most of your health benefits.

"Save Big" is like one of those "Hits from the '80s" CD sets; it contains tons of material that you've probably heard in a scattershot fashion before, but is great to have all in one place. "Save Big" would make a great holiday gift for yourself if saving money is on your list of New Year's resolutions for 2011.

How to Save on Big-Ticket Items
Kimberly Palmer

March 31, 2010

To Elisabeth Leamy, Good Morning America's consumer correspondent, pinching pennies by skipping coffee or bringing lunch to work is barely worth the trouble. (She says she ends up eating her bagged meal by 11 a.m. and buying a second one in the midafternoon, anyway.) Plus, she likes supporting the local coffeehouse with her green tea habit. She also likes saving money—but only when she can save a lot of it.

That's why she tells people how to save thousands of dollars at once, instead of a few bucks here and there, in her new book, Save Big: Cut Your Top 5 Costs and Save Thousands! By negotiating with everyone from real estate agents to doctors to grocery stores, Leamy estimates that she shows readers how to save close to $2 million—more than the cost of all of the lattes anyone could safely drink.

[Slide Show: How to Save on Big-Ticket Items.]

Plus, she notes, many people are already pinching pennies but are still struggling to spend less than they bring in. "Little things aren't enough right now," she says. "People tell me that they're skipping lattes but are paying bills late, and that slams your credit score, and then you pay much more than you would otherwise," she says.

Leamy focuses on five big-ticket areas: homes, cars, credit, groceries, and healthcare.

Buy a house, but pay fewer fees. Leamy points out that generally speaking, buying a home allows people to save a lot of money, because it forces them to save by investing in their home each time they write a mortgage check. Plus, homeowners receive tax benefits unavailable to renters. To keep as much money as possible in your bank account, she recommends negotiating discounts with your Realtor, lender, and settlement company.

Real estate agents, for example, are often willing to accept a 2 percent fee instead of the traditional 3 percent, especially if house hunters do much of the work themselves. As for lenders and settlement companies, they will often cut buyers a break on various fees, such as application fees or document preparation fees, if asked.

"Negotiating in our culture is always a little awkward, but some of these dollar amounts are too big to let embarrassment get in the way," says Leamy. Plus, she says, mortgage professionals are increasingly getting used to it these days.

[See Life on $7 a Day.]

Stick to used cars. New cars lose so much of their value in the first few years of ownership that they're not worth purchasing, Leamy says, especially when you can buy a certified used car that will last. "Cars these days are really well built, so the risk is lower than it used to be," she says. Leamy suggests investing time in the research phase of your purchasing process so you're sure to buy a reliable vehicle. In fact, she even says it's worth paying extra on the car to increase the chances you're getting a good one.

Leamy also recommends bringing cash to the dealership to avoid paying interest on a car loan. "Paying interest on something that is definitely going down in value is a horrendous waste of money," she says.

Defend your credit. Keeping a clean credit report—and high credit score—means you'll pay less for any type of loan you take out, including massive mortgages. That's why Leamy suggests ordering your free credit report once a year through annualcreditreport.com to make sure it is correct. If you're taking out a $250,000 mortgage, for example, a credit score of 785 instead of 635 could potentially save you $87,480 over 30 years, depending on prevailing interest rates.

[See Credit Card Fees: 5 Things You Should Know.]

Keep a grocery stash. By stockpiling groceries, you'll not only be able to purchase more items when they're on sale and save them for later (just stick meat and bread in the freezer), but you'll also be able to make use of Leamy's other big idea: Skip shopping trips. She says that many people can get by on the food they already have for a week, so why not skip shopping once a month or once a quarter? If you're used to shopping very week and spending $7,500 a year, then skipping the trip once a month could save you $1,800, or 24 percent of your annual grocery bill.

Cut deals with doctors. Just like real estate agents, doctors are getting increasingly used to patients who want to bargain with them—and making the effort is worth it, says Leamy. By asking doctors for discounts upfront, especially if you're willing to pay for their services with cash, you might be able to get as much as 50 percent off your medical bills.

Then you'll be able to afford a latte after your visit.

Pinch $1,000s, not pennies, ex-reporter says
WALT BELCHER wbelcher

April 6, 2010

"Good Morning America" consumer reporter Elisabeth Leamy is fond of saying that people are stepping over thousands of dollars to pick up pennies.

"People are cutting out the lattes at the coffee shop and brown bagging their lunches when they really should be negotiating for lower interest rates on home loans, making deals with doctors and driving used cars," says Leamy, who has a new book, "Save Big: Cut Your Top 5 Costs and Save Thousands!"

In these tough economic times, she's come up with tips on how to cut costs on housing, automobiles, groceries and health care, as well as advice on cutting credit costs.

"I don't believe in penny pinching when I can pinch $1,000 bills," says Leamy, who got her start in consumer reporting when she worked at News Channel 8 in the 1990s.

On a recent visit to Tampa (where she has in-laws), she recalled being an "8 On Your Side" reporter along with Steve Overton (now a financial adviser).

She credits former News Channel 8 news director Dan Bradley with giving her the beat that changed her life. Tampa also gave her a husband, financial planner Kris Presinger. They now live in Washington, D.C.

Leamy also recalls getting a new look while in Tampa, one that caught the attention of this column then.

When she joined News Channel 8 in 1994 she had curly red hair. News consultants thought the Shirley Temple look was too distracting, but she balked at making a change for more than a year. She lost the curls after "the hair" began to define her. Today she has straight blonde locks.

After Leamy left News Channel 8 in 1997, she was a consumer reporter for a Fox station in Washington, D.C. She joined "GMA" in 2005. ABC News brags that Leamy is known for memorable ways to demonstrate her stories, such as testing hand sanitizers by putting E. coli bacteria on her hands.

There's nothing that dramatic in "Save Big" - just sound advice, such as stockpiling groceries when items are on sale to cut down on shopping trips. She says grocery shopping once a month instead of weekly cuts the annual grocery bill by 24 percent.

For information see www.elisabethleamy.com.

'Good Morning America' correspondent's book offers tips on saving big bucks
Ivan Penn

March 6, 2010

Don't skip the latte! Oh, and inflate your tires — but not to save a few bucks.

Save money, sure. But learn how to SAVE BIG, rather than pinching pennies that will take you a lifetime to accumulate.

Welcome to Elisabeth Leamy's world of how to SAVE BIG, the title of the Good Morning America consumer correspondent's new book. Not that you avoid all small savings tips, but Leamy wants consumers to find big ways to save money faster.

The notion resonates with me because in these troubled economic times we sometimes need a latte, or a spa treatment or a golf outing to ease the pressure. But it doesn't feel like we can (though we later go financially stir crazy and end up splurging).

So I had a talk with Leamy and a look at her book to see how to SAVE BIG rather than small.

Is it possible for everyday folks to do?

"People say to me, 'You're educated. You make good money. I can't do that,' " she said. "I reject that. These big savings steps are not hard to do."

So how does Leamy save big?

Reduce your top five costs, she says, and you'll save thousands. Those include costs related to your home, car, health care, credit and groceries.

Though she pays significant attention to home ownership — about a third of her book focuses on such ideas as selling your house yourself and using tax benefits — Leamy offers something for everyone on how to save, and big.

For example, need a car? Buy a used car instead of a new one and save $10,000 or even $20,000 on the car of your choice.

Sure, you have to do some homework, but the reality is you can find even the nice luxury car for a lot less. While inflating your tires to the right level saves you about $9 a month, Leamy touts some $152,417 in car savings in her book.

"You would have to properly inflate the tires of five cars for 282 years to match that!" she says in the book.

In all, SAVE BIG shows consumers how to save $1,176,916, or the equivalent of about 294,229 lattes.

One of Leamy's recommendations that most any consumer can benefit from is her suggestions for grocery savings. Take her suggestion about "price matching." She calls it "our first guerilla grocery shopping weapon."

Rather than running around to different stores to buy items at sale prices, find one store that honors other stores' prices and get everything there.

Some stores will "beat their competitors prices rather than just matching them," Leamy says in her book. "For example, Lowe's and Home Depot both promise to beat each other's prices by 10 percent."

Leamy also recommends stockpiling by catching "seasonal" specialties. Did you know there are spaghetti sauce wars in September between Ragu and Prego? And Quaker has sales in January, she says.

In her estimation, Leamy says, price matching can save as much as $10,000 a year in grocery costs.

"I thought people would really like to hear this," Leamy said of the book. "You want to have some pleasures in life," rather than avoiding a latte, always packing a lunch and constantly checking the tires.

So here's the Edge:

• Think about big ways to save. Leamy emphasizes a strong credit score can save you $2,916 a year on your mortgage. Raising your health insurance deductible can save $2,700.

• Price match when grocery shopping. Leamy says the Web site CouponMom.com can help you with price matching and other savings.

• Negotiate with retailers for products, banks for interest rates and car dealers for deals.

The Color of Money: Michelle Singletary on women with a wealthy attitude
Michelle Singletary

February 28, 2010

Except for the occasional special coin or the Martha Washington $1 silver certificate, I always wondered why the face of a woman isn't part of U.S. currency.

Then I saw this quote from Ivy Baker Priest, a former U.S. treasurer: "Why should we mind if men have their faces on the money, as long as we get our hands on it?"

How true.

So for March, in honor of Women's History Month, I've selected four financial books written by four dynamic women for the Color of Money Book Club.

Here are the books and why I've selected them.

'A Purse of Your Own'

I simply love using a purse as a metaphor for wealth. "More than anything, the purse represents our private financial identity," Deborah Owens writes in "A Purse of Your Own." "At the end of the day, creating wealth is about adding to the purse."

Owens covers much of what you should find in this type of book. She talks about investing, saving and spending less. But she does it with a conversational tone. She's the smart sister you might wish you had and could go to for financial advice. Owens is a 20-year veteran of the financial services industry, the chief executive of Owens Media Group and the host of "Wealthy Lifestyle Radio," a personal finance talk show that airs on National Public Radio's affiliate WEAA 88.9 FM in Baltimore.

'Live It, Love It, Earn It'

Marianna Olszewski is the founder and chief executive of Madison Financial Management, a broker-dealer and hedge fund marketing company.

Her book, "Live It, Love It, Earn It: A Woman's Guide to Financial Freedom," is part motivational, part personal finance, and Olszewski seeks to first inspire before she walks you down the path to prosperity.

"A healthy mind, body and bank account are all connected," she writes.

This isn't psychobabble. Often those who are poor money managers are unhappy and unhealthy people.

Olszewski suggests you get a few of your girlfriends together and read the book as a group to follow her exercises. "The power of the tools is enhanced, and abundance comes to all of us much more quickly than if we are working on them by ourselves."

'Save Big'

I'm a lifelong penny-pincher who follows the cautionary advice from Benjamin Franklin that "a small leak will sink a great ship." I use this quote to drive home to people that it's the small expenditures in life that can add up to big losses.

But in "Save Big," Elisabeth Leamy, who is a consumer correspondent for ABC's "Good Morning America," says to buy your latte in the morning and work on spending less on the big stuff.

Her personal finance philosophy: "I've always preferred to save a lot of money on a few things rather than a little bit of money on a bunch of things. I like to save big. Not small."

Every tip in her book has the potential to save you at least $1,000, she says. She shows you how to save on the five things we spend the most on -- a home, car, credit card, groceries and health care.


'Expect to Win'

Wall Street veteran Carla A. Harris is a managing director at Morgan Stanley Investment Management, and her book "Expect to Win" has a lot of sage and specific advice if you need a push to the top of the career ladder.

I know we're in a recession, so I'm not suggesting you buy all four books -- unless you can truly afford to. But at least put them all on your list to read eventually because each has something to offer and will help you, as Priest, the former treasurer, says, get your hands on some money.

It's easy to be a member of the Color of Money Book Club. We don't meet, at least not in person. We come together for a live online discussion. Join me at noon March 25 at http://washingtonpost.com/discussions. All four authors of this month's selected books will be available to take your questions. And, yes, gentlemen are welcome.

Every month, I randomly select readers to receive a copy of the featured book, donated by the publisher. This month, I'll be giving away copies of all four books.

For a chance to win one of them, e-mail colorofmoney@washpost.comwith your name and address. Please identify which book you would like in the subject line of your e-mail.

Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

Reporter Challenges Consumers to Think Big When Seeking Savings
Pinching $1,000 bills beats pinching pennies, says Good Morning America's Elisabeth Leamy
Truman Lewis

February 7, 2010
Feeling bad about your daily Starbucks fix? Don't. While it's true that all those $4 lattes could, in theory, buy you a used Mercedes to drive to the nursing home in 50 years, a noted consumer expert advises that it's the big things -- not that little ones -- that can make a really significant difference in your finances.

Elisabeth Leamy, Good Morning America's consumer correspondent, can recite the usual advice from memory: "Switch to low-flow showerheads, save $5. Inflate your tires properly, save $9. Use your own bank’s ATM, save $3. Pack your lunch, save $7." But that doesn't mean she agrees with it.

"I don't believe in penny pinching," says Leamy. "I like to pinch $1,000 bills." And Leamy says her new book -- SAVE BIG (Wiley; January 2010; $24.95; Hardcover) -- will do just that. Leamy estimates that consumers who follow her advice can save up to $1,176,916.

“Why give up life’s little pleasures and conveniences,” Leamy asks, “when you can save much more money by attacking a few BIG, boring expenses instead?” Some examples:

HOUSE:

• Fight junk closing costs when you buy a home and save $2,530.
• Refinance into a shorter mortgage. Save $103,536.
• Appeal your property taxes and save $1,265 a year.

CAR:

• Buy a “dark horse” car instead of the most popular make and model and save $ 6,814.
• Pay cash for your car and save $2,608.
• Exercise a “secret warranty” where the dealer fixes flaws for free and save $1,400.

CREDIT:

• Ferociously guard your credit score and save $2,916 a year on your mortgage.
• Undergo rapid rescoring before finalizing a mortgage and save $72,000 over the life of the loan.
• Negotiate for a lower credit card interest rate and save $1,272.

GROCERIES:

• Price match using simple online tools and save $4,628 a year on groceries.
• Stockpile and save $5,772 a year on groceries.
• Master creative couponing (Click don’t clip!) and save $7,956 a year.

HEALTHCARE:

• Raise your health insurance deductible and save $2,700 a year.
• Take the over-the-counter version of a drug instead of the identical prescription version and save $1,763 a year.
• Hire a medical billing advocate to fight hospital billing errors and save $6,858.

A recent Consumer Reports poll showed Americans have responded to the recession by ushering in a new era of “intelligent thrift;” 79% of respondents said they will continue to purchase only what they truly need post-recovery. Two-thirds said that if they were to win $10,000 they would use it to pay down debt or build their savings. Leamy thinks her book will resonate with an audience hungry for a new strategy that's built around significant savings.

Even better, says Leamy, is that many of her cost-saving tactics don't require sacrificing time and energy on a daily basis.

"Save big (not small) and I think you will find that you save something even more precious than money: time. The puny savings ideas other authors tout take a lot of time. They need constant maintenance. They require willpower," she said. "In the face of a zillion different daily deprivations, most people fail. I find it much easier to channel my energy into a few big cost-savers that I only have to tackle every once in awhile. direction.

Leamy, who assures us she has no connection with upscale coffee purveyors, appears on Good Morning America several times a week, digging up new ways to save money, alerting people to dangerous products and giving a heads up about scams and rip-offs. Leamy also reports for World News, Nightline and 20/20 and writes a weekly column for ABCNews.com. Her first book, The Savvy Consumer, was published in 2004.


SAVE BIG” MONEY ON BIG PURCHASES – SAYS “GMA’S” ELISABETH LEAMY

Elisabeth Leamy wants you to save thousands of dollars. The Good Morning America consumer correspondent has written a new book, Save Big, that addresses how to find hidden savings in the largest of our expenses.

Leamy says lattes can cost $3.00 a pop and cutting down on our consumption is smart, but why jump over the dollars to pick up the pennies? Leamy suggests in her book for consumers to look deep into the big ticket items, house, car and more, for ways to cut down.

Who knew you could actually ask for a reassessment of property values to reconfigure the tax amounts? How about taking a shorter mortgage at a lower interest rate? Choosing cars based on features rather than on popular names can save consumers plenty if they pay attention. And Leamy advises us to buy used instead of new for our wheels.

And for heaven’s sake, keep a watchful eye on your credit. The more carefully you scrutinize your purchases, pay bills on time and monitor your credit statements, the better rates you’ll receive when securing loans.

Even healthcare needs close examination says the financial expert. Don’t just accept medical costs, inspect the bill for overages and speak up quickly to reverse excessive charges.

Those are just a handful of ways to lower overhead, Leamy points out in Save Big, but there are many other ways to cut down on expenses and put thousands of bucks back in your wallet.

Click onto media bars for:

Leamy’s suggestions of where to save money.


Leamy pointing out where hidden costs arise.


Leamy’s advice regarding car purchases.


Leamy’s comments on scrutinizing your own credit for larger savings on loans and for requesting adjustments on interest rates.


Leamy’s cautions regarding hidden healthcare costs.


Elisabeth Leamy’s book, Save Big is currently on store shelves.

Big ideas on how to save a little money
MIKE THOMAS Staff Reporter

Elisabeth Leamy, widely known as the consumer correspondent on ABC's Good Morning America, wasn't always adept at managing her money.

While in grad school at Northwestern University's Medill School of Journalism several years ago, she sank deep into credit card debt -- partly the result, she says, of too many shopping sprees at Water Tower Place.

ADVICE FROM THE BOOK

Some good advice from Elisabeth Leamy's new book, Save Big.

Buy a house ASAP: "You should buy a house as soon as possible, because it's the one investment you can make with money you have to spend anyway. After all, you have to pay money to live somewhere. If you currently rent, it's your biggest expense, but you can make that money serve two purposes by buying a place instead. You get a nest and a nest egg."

Never buy a new car: "You know that cars go down in value, but did you know that a car's steepest depreciation occurs between ages zero and three -- an average of 45 percent? The depreciation from year three to year six is much more modest, more like 25 percent, according to Consumer Reports. If you were psychic and knew a stock was going to go way down in value for three years and then level off, wouldn't you wait until year four to buy it?"

Request a security freeze: "If you really want to safeguard your credit file, consider a security freeze, your right under the Identity Theft Protection Law. Prospective creditors are barred from even looking at your file unless you open it for them. (Banks and businesses with which you have an existing relationship still have access.) This prevents identity thieves from opening accounts in your name because banks won't establish new accounts without a credit check."

Save on healthcare: Raise your deductible as high as you can afford to; open a tax-free Health Savings Account; get a group rate on insurance.
Now, though, her saving savvy is at an all-time high, and she shares a number of effective techniques in her new book, Save Big. Inspired by a scrappy and smart Chicago area woman Leamy had interviewed for a GMA story about America's most frugal moms, it's chock-full of insider tips on everything from mortgage shopping and car buying to healthcare and credit cards.

Why sweat the small stuff, Leamy says, when there are so many other ways to more dramatically improve your bottom line?

Q. What's been your journey from financial layperson to where you are now?

A. I have smart parents who were very much up on this stuff. And they tried to teach me, but I frankly wasn't interested. I was math-phobic. And I also, as a young woman, loved to shop.

So in college and post-college I got myself a nice credit card habit and some credit card debt. And my parents bailed me out the first time, which was mortifying. And then, you know what? I dug myself into credit card debt again. And then I dug myself out, dollar by dollar, on my own. Very proud of that accomplishment.

Right around that same time I had a secret weapon. Namely, I started dating a guy who's now my husband, and he is a certified financial planner. So I have to admit, I've had a personal tutor on some of this stuff.

Q. There are a lot of great tips in your book, but some of them will take people quite a bit more time than they're used to spending.

A. Only [on] the grocery stuff. I have a love-hate relationship with the grocery section for that very reason. It takes more regular maintenance than all my other sections. Most of the other ways to save big are things you can focus on just once every few years or few months and then you'll get a big payoff. With groceries, you do have to do more frequent work. And I don't like that about it. But on the other hand, not everybody owns a home, not everybody even owns a car.

Everybody needs groceries. And so it's kind of the baseline way to save. You can then accumulate a little bit of savings, which you can then put toward some of the other savings techniques that are even bigger.

Q. Is a smart spender the same as a good saver, or are there differences?

A. I think they're cousins. I know plenty of people who have given up their daily latte and tried to do all these other little things, but they leased a car -- which is a terrible financial mistake.

They don't carefully guard their credit to maintain the highest possible score. I say credit is a cost -- the cost of interest. I raised my score and I calculated that I've saved $116,000 in mortgage interest over the past 10 years. So people are focused on the wrong things, I believe.

Q. Why don't people make more efforts to save? Is it just not knowing how to do it?

A. Again and again, what you hear is, "Brown bag your lunch, cut out your daily latte, go to your own bank's ATM," which I agree with, but it's not always convenient. The thing is, those are all little savings.

My shtick is that I say every tip in this book has the potential to save you at least $1,000. To me, that's money to get excited about. I'm not that excited about saving $4.

Q. It's more inspirational to focus on the big stuff. There's more of a payoff. But brown-bagging it everyday, saving four bucks, adds up.

A. Brown-bagging it does add up. But I say at the end of the book that some of those little pleasures in life are what keep the big responsibilities from bumping into each other.

So I hope people won't feel stressed out on the day that they don't have time to brown bag it. And I hope people will take 15 minutes to have a coffee with a friend, which is a nice little interlude in life. I think we should enjoy some of those little pleasures.

Savings guru Elisabeth Leamy offers tips on saving big
Martha C. White

So you're brown-bagging it, making your own coffee and clipping coupons. Sound familiar? It's what a lot of us are doing these days in order to save money. It's also what Elisabeth Leamy used to do before she realized it wasn't really getting her family's finances very far. Instead, Leamy attacked her big-ticket expenses and, by doing so, saved her family a whopping $160,000 over the past ten years.

In her new book, Save Big, Leamy doles out some saving advice that may not seem so conventional. For instance, she says to go ahead and keep that daily latte (though we still say skip it and embrace the Mr. Coffee machine instead.) Leamy believes that the only way consumers can truly save cash is to tackle larger chunks of wasteful spending, particularly when it comes to your house, your car and other key areas.

But can Leamy's ways help us save tens of thousands of dollar, too? WalletPop got her advice firsthand. Here's what she had to say about five key spending areas.


Housing
Most of us consider housing to be a fixed cost, but Leamy says there's a treasure trove of savings opportunities available when buying and selling a home.

When she and her husband were buying their house, says Leamy, "I scrutinized the closing costs and found $4,700 in junk fees."

What counts as a "junk fee"? After all, there are legitimate fees associated with closing on a property, and some of them can't be negotiated. Look at each item carefully, Leamy advises. Items that seem vague ("administration fees," for instance) can be a red flag. Other line items, such as courier fees, document preparation fees and funding fees, can be argued and successfully negotiated.

How you sell your home is another opportunity to save, she says. Leamy saved a cool $25,000 when she sold her condo prior to moving in with her husband by not using a realtor. While she says she doesn't recommend doing this in a turbulent market like the one we're in now, it's something to keep in mind for the future when the market is calmer.

Car
Leamy's number-one rule is to never buy a new car. "Cars depreciate 45 percent in the first three years," she says. If you can find a low-mileage vehicle that is just over the three-year mark, you can save a bundle. Leamy estimates she saved $5,000 by buying a three-year-old Honda Pilot the last time she went car shopping.

She also suggests going through a private seller; you'll most likely get a better deal than you would at a dealership. If you're wary of buying a vehicle from an individual (doing so usually means you forgo any service warranties and don't have any recourse should something be wrong with the car), Leamy says you can often bargain with auto dealers to have a warranty plan included --for a nominal sum -- on a used car that doesn't already offer one.

Finally, if your car's in decent shape, don't trade it in just because you can. If you're currently making car payments, multiply that monthly amount by 12 and then think about how nice it would feel to save that amount each year by not buying another car.

Credit
Few people grasp how a much a low credit score can really cost you. According to FICO, a person with a credit score of 550 will end up with an interest rate on their mortgage that is three percentage points higher than someone who has a score of 720.

Leamy puts this in more concrete terms by using a conventional 30-year mortgage as an example. "If you raise your score from 620 to 720, you could save $3,120 per year on a $300,000 mortgage - that's $93,600 over the life of the loan," she says. "Over the past decade, I calculate that I've saved $116,000 on two different mortgages because I was able to get better mortgage rates with a higher credit score."

If you're paying off credit card debt, Leamy says paying every two weeks instead of once a month can help you pay down your debt faster. First, that mid-month payment helps reduce your balance (and the interest you pay on it) more than if you'd waited until the end of the month. Second, if you stick to the every-two-week schedule like clockwork, you'll have made the equivalent of one extra payment a year, which goes even further towards chipping away at your debt.

Groceries
Since the recession began, women's magazines have been peppered with articles about "shopping your closet," meaning you should try wearing what you already own instead of buying new clothes. Leamy says Americans need to do the same with their pantries. With the exception of items that quickly spoil like milk, she advises that consumers skip the grocery shopping trip every once in a while and raid their pantry.

"Use up your leftovers, and use frozen and canned food you already have," Leamy says. "It's a fun challenge."

Leamy estimates she's saved 25 percent on groceries annually simply by shopping her pantry once a month instead of making her weekly food-shopping trip. Given that the average American family of four spends $10,692 on groceries annually, that adds up to a nice chunk of change.

For those who are willing to invest a little time in order to save even more, the web offers a bevy of resources. Leamy says she knows people who've cut 50 to 80 percent off their grocery bills by rigorously using coupons every time they shop. Sites like Couponmom.com let you enter the products you're looking for, and the site will tell you if a coupon is hiding in any of the paper circulars that come in your mail or in the newspaper. Leamy also recommends Becentsable.net for tips on maximizing your coupon buck.

Healthcare
Leamy says raising the deductible on your health insurance or increasing the amount you pay for doctor visits and prescriptions can also pay off, particularly for young, healthy Americans. "My family saves $1,100 a year on health insurance," she says.

Leamy opted for a plan through her employer that requires a higher payment each time they go to a doctor but costs a bundle less up front. "You don't want to be spending way more in premiums than you pay in healthcare costs," she advises.

Leamy also says people should stop rejecting generic medicines -- the difference in cost between generic and name-brand can be significant. For an example, Leamy cites the popular antidepressant Prozac. A year's supply of the name brand costs $8,290, whereas the same amount of its generic twin costs just $1,940, a savings of $6,350.

All told, not all of Leamy's tips will work for everybody, but it's likely that some of them probably apply to you. More important, though, is her mindset. Countless experts preach at us to watch our pennies, but watching those hundred-dollar bills could add up to significant savings a lot faster.

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What's your best recession bargain?
Experts and regular folks brag about their big scores, such as a $38,000 house and $114 in groceries for $1.62.
By Liz Pulliam Weston

Bad economic times have been a nightmare for millions of Americans who've lost jobs, homes and big chunks of their retirement funds.

If you have disposable income and the willingness to spend it, though, the flip side of the recession has been sometimes-amazing bargains as hard-hit businesses have become more willing to wheel, deal and discount.

I queried some of my fellow personal-finance writers as well as posters on the Your Money message board for their best recession bargains. These are their stories.


Retail heaven

Jean Chatzky, the financial editor of NBC's "Today" show and author of "Money 911," has become a fan of online sample-sale sites. These sites, which have sprouted like mushrooms in the past couple of years, offer designer duds at steep, steep discounts in lightning-fast sales that sometimes last only a few hours. To get access, you often have to be "sponsored in" by an existing site member.

Two of Chatzky's favorites: Rue La La and Gilt Groupe.

"My best (bargain)? The designer dress I'm planning to wear to my daughter's bat mitzvah," Chatzky said. "It was less than $100!"


Houses (and mortgages) on sale

Plunging home prices have proved a bonanza for homebuyers and investors. Your Money poster "PatrioticStablest," who owns several rentals, scooped up a foreclosed home for $38,000.

"(It) was in bad shape (and we) spent about $30,000 on it but now have it rented for $900 a month," PatrioticStablest wrote. That's a "good return on our investment (and we) wish we could find more at that price even if it was in poor condition."

Fellow poster "not_a_crook" counts a home loan as the best recession bargain: a 15-year fixed-rate mortgage at 4.25% (with a quarter-point).

Elisabeth Leamy, the consumer correspondent for ABC's "Good Morning America," is equally proud of the rate she nabbed on a refinance.

"My husband and I already had a great rate (5.875%), but we watched and waited to pounce on an even better deal. Sure enough, over the summer, we locked in a new rate a full point lower," said Leamy, the author of "Save Big: Cut Your Top 5 Costs and Save Thousands." "With just a couple weeks' worth of planning and paperwork, our new mortgage will save us approximately $7,000 a year. Now that's what I mean when I say 'save big!'"


Cruising through a remodel

J.D. Roth, who authors the Get Rich Slowly blog, is fixing up the home he shares with his wife and has been impressed by how eager contractors seem to be for the work.

"We got good deals, quick service and attention to detail we haven't got in the past," said Roth, who also has written a book, "Your Money: The Missing Manual." "We own a hundred-year-old house, and, as you can imagine, there's a lot of stuff that needs done. For example, we hired a carpenter to fix all of our windows, which were caulked shut. He did awesome work and for a lower price than we could have got two years ago."

Roth also noted all the travel bargains out there, particularly with cruises. Although he says he's "not a big cruise guy," the prices he's seeing on sites such as VacationsToGo.com are "mighty tempting."

"My wife and I rarely go on vacation, but we booked two trips for 2010 because we got great prices," Roth said. "And I know it sounds crazy, but I'm actually considering a 2011 repositioning cruise from China to Japan to Alaska because the prices are so good."

I'll second that. Our family took a seven-day cruise to Alaska with my in-laws on Holland America that set us back just under $500 a person for a relatively spacious interior cabin. Although tips and excursions increased the cost, that rate made me the envy of my Alaska buddies, who are used to seeing trips that cost at least twice that.


It's like getting paid to go to Vegas

Your Money poster "supposedROI" booked a three-night stay at the Venetian resort in Las Vegas that included airfare from Philadelphia, tickets to the Pro Bull Riders finals, $65 in casino chips, free drinks and free admittance to the hotel's clubs.

"Total cost was less than $350!" supposedROI wrote. "While there, we bought tickets to a (Cirque du Soleil) show 1/2 off in the balcony and got upgraded to the 4th row, then (we) took the $65 to gamble with, and got a return of $65 back. It was like they were paying us to stay there. I looove the recession!!"


The hunt for tile bargains

Frugal-living author Mary Hunt is in the midst of remodeling her family's 1972-era master bedroom suite and recently found the perfect tile for the bathroom floor at a local store, which was asking almost $16 per square foot.

"We've been saving for a long time to do this, and we want it to be as nice as we can afford. Still, that's a lot for a square foot of tile," said Hunt, who runs the Debt-Proof Living site and who authored "Debt-Proof Living: The Complete Guide to Living Financially Free." "We noted the manufacturer name and style number, and went home to think about it."

A little Internet research found an outlet called FastFloors.com that not only sold the same tile but was having "a big blowout sale," plus offered an additional 3% discount if Hunt paid with a debit card or a check. So instead of spending more than $2,000, she scored her floor for about half that price, including shipping.

"Sites like FastFloors are doing great during the recession because they rep all floorings at a huge discount," Hunt said, "and have no overhead except a Web site and phones."


Scoring at the supermarket

Stephanie Nelson is an old hand at layering coupons with store discounts for maximum savings, and showing others how to do it at her site, CouponMom.com. But the recession has provided opportunities for savings that impress even her.

"Because of the current economic situation, I've seen deeper grocery discounts on staples and common items like bananas and milk, an increase in store promotions and a surplus of store-distributed coupons," said Nelson, the author of "The Coupon Mom's Guide to Cutting Your Grocery Bill in Half." "I recently combined all three and was able to get $114 of groceries for $1.62. That was by far my best savings of the year."

You can watch Nelson achieve these savings on this video.


Enjoying the new frugality

A soaring savings rate and a renewed interest in frugality are music to the ears of Alice Wood, the author of "Wealth Watchers: A Simple Program to Help You Spend Less and Save More." Wood feels the buy-buy-buy frenzy of the boom years has given way to a thriftier ethic -- something she appreciates culturally and personally.

"My favorite thing about the recession is that everyone's expectations are lowered," Wood said, "so I don't really have to do much shopping."

She said her best score stemmed from two $10 Kohl's gift cards she and her mom received in the mail.

"(My daughter) needed long-sleeved shirts, and I found just the right shirts at Kohl's, and they were a little over $9," Wood said. "I used one gift card for each purchase so I walked away with two shirts without paying anything. I'm sure the idea is to get you into the store so that you'll also make an impulse purchase. But nothing called to me, so my outing was free."

These books bring financial matters into better focus
Gail MarksJarvis

How about buying a book for a holiday gift?

It's easy and affordable. You can shop from home, and the person who receives the book can fulfill the new pastime of entertaining themselves frugally at home.

Here are some suggestions to educate people about the harrowing financial crisis or enable them to make the most out of their money in a tough economy. Some of my favorite personal finance books were released prior to this year, so before heading to the bookstore, make a phone call or search online.

Disaster insight. Among the many books just released, two good reads are Gillian Tett's "Fool's Gold" and Andrew Ross Sorkin's "Too Big to Fail." Tett, an anthropologist turned financial journalist for the Financial Times, focuses on a Wall Street culture that resulted in disaster. Sorkin, a New York Times reporter, looks inside the private meetings in which Wall Street and the government's elite determined our financial fate during the crisis.

Two professors who have spent years studying the world's various financial crises put the recent blunders and challenges into historical perspective. Check out "This Time is Different: Eight Centuries of Financial Folly," by Carmen Reinhart and Kenneth Rogoff.

What makes us tick? Although some predict that "shop till you drop" is dead, Lee Eisenberg's "Shoptimism: Why the American Consumer Will Keep on Buying No Matter What" is an enjoyable look into what drives people to buy. Jason Zweig, in "Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich," will make you aware of how your brain can cause you to invest poorly and how to fix it.

Starting out right. Help friends and family handle their financial lives effectively so they can make the most of their money. Beth Kobliner's "Get a Financial Life: Personal Finance in Your Twenties and Thirties" is one of my favorite wedding or graduation gifts because it walks young adults through every financial decision, from mortgages to credit cards, bank fees, insurance and investing. For people of all ages, Liz Pulliam Weston's "Deal with Your Debt" illustrates how to escape debt, and her "Easy Money" shows how to handle money simply and effectively.

Save on everything. With frugality so popular, many books provide tips on cutting costs on everything from utilities to groceries. Elisabeth Leamy's "Save Big: Cut Your Top 5 Costs and Save Thousands" is invaluable because it focuses on big expenses, including mortgages, cars and insurance, and makes each step understandable.

Need a job? If you know someone who's having trouble landing an interview, Jeffrey Allen's "Instant Interviews: 101 Ways to Get the Best Job of Your Life" introduces a gutsy, creative approach.

Ready to retire? Many books are too generic or don't walk you through details needed to figure out if you have enough money to retire and how to not run out. "Spend 'til The End," by Laurence Kotlikoff and Scott Burns, is essential for anyone who wants to stretch retirement savings. Also helpful: Julie Jason's "The AARP Retirement Survival Guide."

Paying for college. An essential book for anyone who cannot afford the full cost of sending children to college is Kalman Chany's "Paying for College Without Going Broke." It provides financial aid strategies that can provide thousands of dollars in free assistance. It's essential reading for parents with sophomores and juniors in high school.

For Jim Cramer fans. If you know a fan of Jim Cramer's "Mad Money" TV show who buys stocks solely on his tips, they are taking risks that Cramer himself wouldn't endorse. He suggests putting at least an hour of work a week into researching stocks. His books tell people how. His latest is "Jim Cramer's Getting Back to Even."

If you know someone willing to read an investing classic, try Benjamin Graham's "The Intelligent Investor."