WTOL.com, Toledo's News Leader, News 11 | 5 steps to save $5000 a year

5 steps to save $5000 a year

Report by Lauren Lowrey - email | bio

Posted by LS

(WTOL)- In these tough times, everybody's trying to save money. What if you could come up with $5,000?

In this Feeling the Pinch report, we'll give you the Top Five Ways to Save $5,000 a Year.

If you had $5,000 lying around, where would it go?

"I would pay off my college debt. That's what I would do with $5,000 dollars." says Courtney Balster.

Chase Ferguson tells us, "I would definitely pay off what was important first."

Shwata Patel would buy a car.

Well, start planning because we're about to save you $5k.

Number 5: Space out appointments.

How many haircuts do you get each year? For women, extending the time between haircuts by a week-and-a-half could save you $120 on two fewer cuts. It's the same story for manicures or other such visits. 

If you can wait an extra week between each visit, you could save nearly $200.

Number 4:  Look at the small expenses that tend to add up.

Little things such as ATM fees and specialty coffees add up. Banks usually charge non-members $2 for each withdrawal. That can easily add up to $100 a year if you do it weekly ($102).

And that cup of joe? Spending $3.69 on a specialty coffee three times a week costs you more than $575 over the course of 12 months. If you're buying your joe with a credit card, it's costing you even more.

"It's very easy to swipe that card for, say a Starbucks coffee for $3.50. It's not $3.50 anymore once you've swiped the card and started to pay interest on it. We're talking at least double if you haven't paid your balance," says Melanie Ogrodowski NW Ohio Credit Unions.

Since we're on credit cards...

Number 3: Call your credit card company and ask for a lower rate.

In 2007 the average American household owed over $9800 in credit card debt. If you tried to pay this card off in two years at 21% APR, you'd pay nearly $2100 in interest.

By reducing your APR to 11 percent, you cut the interest over two years to $1100, which saves you $978.

So far, we've saved $1,974, but our next two tips will make up the rest.

For many more tips and reports, visit Feeling the Pinch on wtol.com.

Number 2: Raise your deductible on home and auto insurance.

Ohio drivers pay an average premium of $669 for auto insurance. The average for homeowners insurance is $545. After paying both payments twice each year, you're spending more than $2400.

By raising your deductible, you could save up to 30 percent and knock down that number to $1,264. Instantly, you saved $728.

Number 1: You are what you eat.

According to the National Restaurant Association, Ohio residents will spend $16.5 billion at restaurants in 2008. That means each of Ohio's 10 million adults will spend an average of $1600 at restaurants this year. That's $31 a week.

By cutting that down to one lunch a week, you could save $1300 a year. To put us over the edge, we've got to start clipping coupons.

Web sites like GroceryGame.com and CouponMom.com research the lowest-priced products at your grocery store and match them with manufacturers' coupons that week. This could cut your grocery bill in half.

If each person eats $2100 worth of groceries each year, then clipping coupons just saved you more than a $1000.

All five tips totaled $5,062.

All it takes is a little self control. Ogrodowski says, "It's a challenge. It is difficult, and it's something we need to be conscious of. It takes a little bit of work, and a lot of discipline. But it's very important, especially moving forward in these tough economic times."