How to Save on Expenses Believed to Be Non-Negotiable

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Every few weeks, I take questions from consumers and do my best to answer them here in this space. This time I'm going to answer a key question that was put to me by one person seeking a "GMA" savings makeover." In case you missed it, last year I offered "Good Morning America" viewers makeovers, drawing on the 100 simple cost-cutting strategies in my book, "Save Big."

I found roughly $47,000 in savings for the first family, $189,000 for the second, $108,000 for the third and $58,000 for the fourth. (To see the stories, and how the same strategies could help you, click on the dollar amounts.) The key is to look for big savings instead of small ones, and look in the places where we spend the most money: our homes, cars, credit, groceries and health care.

In my book, I work from some very different assumptions about the best way to save (but I let you have your latte!), so here's my contrarian response to a classic question.

Q: How do we save when so many of our costs are fixed? ~CM, Connecticut

A: In this tricky economy, try to adjust your attitude. Are you sure your costs are fixed? It's time to get scrappy to save some much-needed money. The truth is, even most supposedly "fixed" costs can be negotiated, refinanced or shopped around.

If you rent, try negotiating for a better rate. It costs landlords a lot of money to leave properties empty, so if you're a good tenant, that is valuable to them. Research the incentives your landlord and other nearby buildings are offering new tenants, and use that as a starting point to argue for a better deal.

If you own a home, interest rates have been historically low. Are you in a position to refinance? I argue that it's worth refinancing if you can get half a point off your rate and if you will add no more than five years to the length of your mortgage and can still pay your closing costs off in five years or less -- preferably much less. That's my Refinancing Rule of 5s. Can't get approved at a big bank? Try a credit union. Credit unions pay attention to your situation, not just your score. Find one here.

Property taxes? Appeal your assessment. Many local jurisdictions have not caught up with reality and are still using market values from early 2008 to assess homes. This is the time of year that assessments get mailed out. Appealing takes about the same amount of work as fighting a traffic ticket -- with a much bigger payout. I interviewed a New Jersey man who stood to save $5,000 a year if he won his appeal.

If car payments are a burden and your vehicle is not too old and you are not underwater on the value, did you know you can refinance it? Yup. Once again, credit unions are the place to turn. They do more of these auto loan refinances than anybody else.

Insurance, Medical Costs and Groceries

Insurance? That is certainly not fixed. I found a New York family more than $2,000 in annual savings on its car insurance just by shopping around. Approach an independent agent who represents many different companies. Find one here. I found a Virginia family of seven nearly $7,000 in savings on its health insurance, again by shopping around through an independent agent. There are savings to be had on homeowner's insurance too.

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