Elisabeth Leamy, consumer correspondent for "Good Morning America," identifies areas where people spend the most money and shows you how you can save more by tackling large expenses. In "Save Big," Leamy shows how to cut spending on houses, cars, groceries, health care, credit and more.
After reading the excerpt below, head to the "GMA" Library to find more good reads.
"SAVE BIG" Introduction
My savings sage —the one who crystallized everything I had ever thought about saving money— was a bleached-blonde mom wearing orange mood lipstick and towering, clear plastic high heels. She had this skittish way of laughing after she made an important point. You would think some imposing, paunchy, appropriately graying guy would have been my guru. But no . . .
Good Morning America had dispatched me to the Chicago area for a story about "The Most Frugal Moms in America." I admit I went with a resigned, well-at-least-I've-got-this-down-to-a-science kind of dread, expecting an interview about creative ways to reuse cottage cheese containers and old pantyhose. But then I met this savvy single mom who had paid off her mortgage in five years. Twice. On two different homes. She had even gotten laid off and managed to stay home with her kids for two years — without a job — because she kept her expenses so low.
"How do you do it?" I asked, with awe.
"I try to focus on the big stuff," she replied.
Then she let out that cute, kooky laugh. But I didn't really hear it this time because I was having my own little epiphany. Of course! I had never put my philosophy into words before, but there it was. 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.
I've never read a book that sees it my way. They all list a litany of what I call "Small Stuff Savings" on the premise that "every bit counts." 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. And the all-time favorite target: Skip your morning latte, save $4.
Brace yourself, now, because my advice is to go for it! Have the latte! No, the Coffee Council is not paying me off. No, I'm not caffeine-addled. I don't even drink coffee! The point is, why give up life's little pleasures and conveniences when you can save money by attacking a few BIG expenses instead? In fact, you can save more money my way. You can SAVE BIG. The key is to identify the areas where you spend the most money, because that's where you can save the most money. The five things we spend the most money on are:
5. Health Care
I'm going to show you how to save tens of thousands of dollars in these five parts of your financial life. For example, refinance into a shorter mortgage and you can save $103,536. Find out about a secret warranty where the manufacturer fixes your car for free and save $1,200. Raise your credit score just 100 points and save $93,600. Stockpile groceries when they're on sale instead of when you need them and save $5,772. And pick and choose your prescriptions to save $ 6,350.