Save Big: A Family Gets a Savings Makeover for the New Year

Jan. 5, 2010— -- How would you like to save thousands of dollars in 2010? "SAVE BIG: Cut Your Top 5 Costs and Save Thousands" is the title of a my new book, which I rushed to write in an effort to give people money-saving, life-changing information in this tricky economy. To see whether my strategies can work for ordinary folks, "Good Morning America" challenged me to do a savings makeover for a family.

The way to SAVE BIG is to target your top five costs, namely: houses, cars, credit, groceries and health care. I managed to compile $1,176,916 worth of savings examples for the book and I used several of them to help the Crest family of Baltimore SAVE BIG. I arrived at the Crest's house on New Year's Day, bearing a gift -- the gift of savings.

"Are you ready to save big in 2010?" I asked when they opened the door.

"Yes. Absolutely!" they answered.

The Crests purchased their first home, a sturdy brick row house in Baltimore, a little over a year ago. They've discovered that home ownership is wonderful -- but expensive. So saving money matters to them. I found five ways for them to SAVE BIG.

"One way that you could save $1,236," I told Warren Crest, "is by dropping the collision and comprehensive part of your car insurance."

He was definitely skeptical, because he had always been taught that you should pay for full coverage for peace of mind. Collision and comprehensive are the parts of your car insurance that pay to repair your vehicle if it's damaged in an accident or if a tree falls on it or something. Many experts suggest that you should consider dropping this coverage when the collision and comprehensive premium equals more than ten percent of your vehicle's value. That was the case with the Crest's two older cars. It usually saves people about 40 percent on auto insurance. You are taking a calculated risk, because if your car is damaged, you will have to pay to repair or replace it yourself. But if you are paying $500 to insure a car that is only worth $1,000, in just two years you could save enough to buy another inexpensive car.

"I'll talk it over with the missus and we will consider giving that a try," Warren said.

CARS: Car companies often offer secret warranties where they will pay to fix your car instead of issuing a recall.

CREDIT: If you pay your credit card bills biweekly instead of monthly you can finish them off faster because it lowers the average daily balance on which you are charged interest.

GROCERIES: Learn to recognize seasonal savings cycles. Many products go on sale at rock-bottom prices at the same time every year -- for example, Quaker products in January and spaghetti sauce in September.

HEALTH CARE: Some prescription medications are also sold over the counter. You can get the exact same drug in the same dose for a fraction of the cost.

Click here to read an excerpt from Elisabeth Leamy's book "SAVE BIG."

Click here to find out where you can get a copy of "SAVE BIG."

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