Personal Finance > Saving and Spending  
5 ways to stretch your money
Clearance sales aren't always the way to go; spending smarts are.
April 5, 2002: 2:45 PM EST
By Jeanne Sahadi, CNN/Money Staff Writer

NEW YORK (CNN/Money) - You don't need to be a penny pincher, but why pay more than you need to? Especially when paying less doesn't require much effort.

Paying less doesn't necessarily mean shopping every sale, buying everything used or always opting for package deals. In fact, in doing so you might actually end up spending more or at best not saving much at all, said Jonni McCoy, author of Frugal Families: Making the Most of Your Hard-Earned Money.

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Take furniture and clothing. Full-price, both are typically marked up 50 percent by retailers, so a 30-percent-off "blowout" sale is not necessarily that great a deal, she says.

With that in mind, here are five ways to get more bang for your buck.

Buying groceries

It's hard to save money if you don't know what things cost. When it comes to things you buy regularly, such as groceries or toiletries, "you need to know your prices," McCoy said. She recommends you keep a "price book" -- a log of prices you see advertised in different stores for products you typically use. That way, when the stores you usually shop in have a sale, you'll know if it's really a good deal. If it is (and the product is not perishable), buy four to six weeks' worth, since grocery product sales tend to come in four-to-six week cycles, she said.

Buying major appliances

If you're in the market for a washer-and-dryer or a refrigerator, you usually can get a significant discount if you select last year's model or a new model that has slight cosmetic imperfections, such as a ding or dent in the back of the machine. These models may be squirreled away in the storeroom or at the back of the store, so ask a salesperson, McCoy said.

If you're tempted to buy used appliances for added savings, beware. If you buy from a refurbisher, you may not be paying much less than the original price, you won't get a warranty, you'll have to pay delivery charges, and, if you're buying a product that's more than two or three years old, it won't be as energy-efficient (and hence as low-cost to own) as the newer models, she said.

When buying full retail, you still might be able to negotiate a lower price. "If they're not having a sale, ask if they're having a sale in the near future," said Larry Roth, owner of Living Cheap Press. If they sense you're eager to buy right away, retailers may be inclined to give you a price break. They know you don't buy durable goods everyday and if they lose you now there's a good chance you won't return for years, Roth explained.

Buying a home

You're likely to get more for your money if you put down roots in an up-and-coming neighborhood -- one where renovations of some homes have begun on the street where your home would be -- and/or you purchase a property that has "curable" defects -- i.e., things you can fix, such as the lack of a half bath on the first floor, said Roth, a realtor in Kansas City, Mo. You may pay $10,000 to put in that extra bathroom, but that could translate into an additional $40,000 or more on your selling price. Whatever you do, Roth said, "stay away from incurable defects" such as a busy street. You may get a discount to move there but when you turn around to sell you're going to have to offer buyers a discount, too, he explained.

Paying off a mortgage

It might be a good idea to set up a biweekly payment plan, which typically can save you up to 29 percent in interest over the life of your loan and shave years off your mortgage, but don't pay for the privilege. Such a plan is attractive if you can afford to make what is in effect one extra payment on your mortgage a year, your loan doesn't apply prepayment penalties and you don't sacrifice much in the way of tax deductions that regular mortgage interest payments offer.

Your bank may try to talk you into paying a $200 fee to set such a plan up. But you can do it yourself for free simply by sending in the extra money and informing the bank in writing that the excess should be applied to your principal, not your interest, said certified financial planner Judi Martindale. (For more on how biweekly payment plans work, click here.)

Going on vacation

Who says procrastinators pay more? Last-minute deals abound this year, said certified travel agent Renee Coon of North Coast Travel in Eerie, Pa. You can find rock-bottom airfares when tour and charter companies scramble to fill seats on flights that are only half full. For those planning a driving vacation in the United States this summer, a lot of good hotels are offering bargains as low as $40 a night and package deals that may be worth your while, Coon said. For instance, if you're headed to the Grand Canyon, $119 per person will buy you a night's stay at the Fray Marcos Hotel, dinner, breakfast and a roundtrip train ticket to the Grand Canyon on a historic steam engine.

Some travel websites, like Travelocity, feature last-minute travel deals. If you're not comfortable buying online, you can use the Web to research your trip and then call a reputable travel agent to match or beat the offers you've found. For some of the latest travel bargains, check out our weekly "Best Travel Deals." And for vacations that offer good value for the money, check out MONEY magazine's Best Places to Vacation.

One of the best money-saving tips for all travelers is to think carefully about what you hope to get out of your vacation before slapping down hundreds, if not thousands of dollars. "Think about why you're going," McCoy said. If true R&R is on the agenda, a five-star resort is likely to charge you far more than a friends' cabin by the lake. And if you're averse to Beautiful People and trendy spots, the cheaper alternative may in fact be the preferred one.  Top of page