SayEducate

Four dollars per gallon gasoline is making a mess of many home budgets as is higher food costs, mortgage payments, and other consumer goods. The average American is feeling the sting of diminished earnings, putting a real crimp on savings.

One of the last things you want to do when life is tough is to cut back on savings. That extra money can pay for future emergencies, help fund your retirement, and cover vacation, home improvement, and other anticipated expenses.

But, saving money when your disposable income has shrunk seems virtually impossible to do. Or is it? Can there be a way to set aside money even when the cost of living continues to rise? Let’s take a look at some common sense ways you can lower your bills and still have more money left over to save.

Food — Milk, bread, bananas, you name it has been going up in price, much fast than the inflation rate. Transporting food from warehouse to store has gotten costlier and those costs are being passed on to you. Wherever possible, clip coupons to save on your favorite foods while switching to generic or less known brands when you can. Shop the warehouse clubs and you could save 10-30% off of your food order.

Insurance — If you combine your homeowners insurance with your auto insurance, then you should receive a ten percent discount on your bill. Shop around too and take a good look at your 2001 model year car with high miles — it could be time to drop collision coverage.

Debt — Pull out your credit card statements and examine which ones have jacked up their interest rate recently. If you are carrying balances on high interest rate credit cards, then transfer those balances over to a lower rate card. Many card providers are still offering 0% interest on balance transfers with some waiving transfer fees too.

Cable and Phone — If you haven’t combined your phone and cable service yet, consider doing so at once. Get an internet connection, cable service, and local and long distance coverage for a flat monthly rate. You should be able to save 10-50% by combining your bills to one service provider.

Electric and Gas — If you have central heating and air, keep the indoor temperature at 78 degrees in the summer and 68 degrees in the winter. Supplement cooling and heating with ceiling fans, reversing oscillation for the proper season.

Dental and Health Care — If you are covered through your employer, then medical costs are a known quantity. Still, you can reduce your expenses by using “in network” doctors and labs, get your prescriptions filled at WalMart or a similar store offering cut rate medication services. If you need insurance on your own, shop through a cooperative to get the lowest rates.

Miscellaneous Expenses — Perhaps the greatest savings can come through the elimination or curtailing of various vices. Quit smoking, stop drinking, avoid gambling (including the lottery!), and take a hard look at your entertainment expenses. Take in a matinee instead of a night movie; eat out less each month.

Finally, with all of the money you save you can start setting aside some cash for savings. Maximize your employer’s 401(k) plan and set up automated savings through an online bank such as ING Direct to withdraw money on a regular basis from your checking account to a savings account.

The national economy will eventually improve, but you don’t have to let your personal economy take a hit while you wait for that to happen.

A cool economy could make for some hot vacation deals

High fuel prices and an economy teetering on the brink of recession may not keep people from traveling this summer after all.

The American Automobile Association (AAA) recently shared a report from the Travel Industry Association (TIA) which says that Americans are expected to take more than 327 million leisure trips during June, July and August of 2008. Representing only a slight decline of 1-1.5% over last summer, it is expected that the current economic conditions will create opportunities for vacationers to find bargains when traveling to destinations worldwide.

According to AAA’s Leisure Travel Index, the average rate for a AAA Three Diamond hotel room in July 2008 is $136 in Honolulu/Waikiki, $259 in Maui, $256 in New York City, $160 in Washington, D.C., $138 in Las Vegas, and $193 in San Francisco, with travel packages offering additional opportunities to save. By combining airfare and hotel stay in one package, vacationers can receive significant savings. In some cases, as outlined below, extras such as transportation from the airport or some meals may also be included.

AAA, which is the largest automotive membership club in the US, is offering a variety of packages this summer including the following:

Hawaii: Five nights in Maui which includes hotel and airfare from Los Angeles or San Francisco for only $529*; Chicago, $795*; Denver, $739*; Seattle, $625*; and New York, $799*. AAA prices are per person, based on quad occupancy (two adults and two children under the age of 13) for select dates available August through December.

San Francisco: Package includes a 2-night hotel stay, San Francisco CityPass Sightseeing booklet, and all state and local taxes. Prices start at $209 per person, based on double occupancy, excluding airfare.

Washington, DC: Package includes 4-night hotel stay in Washington, D.C. Prices start at $329 per person, based on double occupancy, excluding airfare.

As with any package, certain restrictions apply. Visit AAA.com for more information and don’t forget to check out special deals being offered through Expedia, Travelocity, Priceline, and other online vacation package companies.

Credit cards are the backbone of the financing industry, driving profits to those institutions who manage their programs well. Competition for customers is fierce and, although consumers typically hold 4, 6, even 8 or more cards, getting them to use one card more than the rest is where profits can be found.

It doesn’t hurt that you run a monthly balance either, for the credit card issuer that is.

One of the most popular lures of credit card issuers are “rewards cards” those credit cards which offer incentives when used. Airline affinity cards were some of the earlier and most popular rewards cards created, but today that category has expanded as issuers contrive different ways to hook customers.

While some consumers still like to accumulate airline miles which can be used toward free flights, upgrades, even hotel stays and car rentals, their popularity has decreased over time. Airlines have made it more difficult to redeem accumulated points and points tend to expire faster than they can be redeemed.

Perhaps the best rewards card out there is the one you can tailor to your specific needs. These cards offer cash back or points toward other rewards, which typically include household items, sporting equipment, hotel stays, restaurant meals, etc. But, the rewards card game only becomes worth playing when you keep the following “rules” in mind:

No fees, no expenses, no monthly balances — Rewards cards should be obtained for free, with no annual fees, and they must be paid off monthly in order to reap the benefit of having one. As most rewards cards charge a high interest rate, carrying balances will serve to cancel out the benefit of accumulating points.

Free points — Oftentimes, to sweeten the deal, a credit card issuer will deposit a large sum of points in your account following the first time you use the card. This means that if you charge your breakfast at McDonald’s, you could be rewarded with an extra 2500, 5000, or even 10,000 points by using the card. From the start, you probably already have enough points to get a free gift, but resist that temptation and keep on accumulating for bigger and better things.

Cash in before they expire — Cards with points that never expire are a rarity as many programs start to remove points after two or three years time. Keep track of your points and save up for the bigger ticket items or cash rewards when you patiently wait to hit the next plateau. Many issuers offer further incentives if you keep accumulating; just don’t lose sight of those points which could start expiring if you wait too long.

Compare offers — Not all offers are the same, though most will pay one to three cents (points) for every dollar spent. Some will pay up to five points on select purchases, such as gas station fill ups, pharmacy visits, and grocery store purchases.

What is the best way to play the game? Answer: familiarize yourself with the credit card issuer’s rewards programs including the occasional program changes which are included with your monthly statement. Look for monthly specials too as that is one way for issuers to move discontinued or slow redeeming merchandise.

You can play the rewards card game and win: just follow the rules and you could score big!