Feeling the Pinch: How You can Save $5,000 a Year - KAIT Jonesboro, AR - Region 8 News, weather, sports

Brandi Hodges Reports

Feeling the Pinch: How You can Save $5,000 a Year

JONESBORO, AR (KAIT) -- 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," said Courtney Balster.

"I would definitely pay off what was important first," said Chase Furguson.

"I'd buy a car," said Shwata Patel.

"Well, start planning because we're about to save you $5,000.

Number five in our "top 5 ways to save $5,000 a year": 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 bucks on two fewer cuts.  For women who color their hair, getting your hair colored every twelve weeks instead of every six weeks could save you about $245 dollars.  It's the same story for manicures.  

If you can wait an extra week between each visit you could save nearly 200-dollars.

Number four on the list: look at the small expenses that tend to add up.

ATM fees and specialty coffees are two things we can live without.  Banks usually charge non-members $2 for each withdrawal.  That can easily add up to $100 a year if you do it weekly.  For those of us who get that routine cup of coffee.  Spending $3.69 on a specialty coffee, three times a week, costs you more than $575 over the course of 12 months.  And if you're using your credit card it's costing you even more.

"It's very easy to swipe that card for, say a Starbucks coffee for $3.50, and 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 on it," said credit counselor Melanie Ogrodowski.

And since we're on credit cards, our number three way to save $5,000 a year call your credit card company and ask for a lower rate.

In 2007 the average American household owed over $9,800 in credit card debt.  If you tried to pay this card off in two years at 21% APR, you'd pay nearly $2,089.20 in interest.  By reducing your APR to 11% you cut the interest over two years to $1,110.24, saving you $978.

So far we've saved $1,974, but our next two tips will make up the rest.  Number Two on our list involves raising your deductible on home and auto insurance.  Arkansas drivers pay an average premium of $685 for auto insurance.  The average for homeowners insurance is $706.  After paying both payments twice each year you're spending more than $2,728.  By raising your deductible you could save up to 30% knocking down that number to $1,909.  Instantly, you saved $819.

And number one on our list of ways to save $5,000 a year, well, let's just say you are what you eat.

According to the National Restaurant Association, Arkansas residents will spend $3.1 billion dollars at restaurants in 2008.  That means each of Arkansas' almost $3,000,000 adults will spend an average of $1,100 at restaurants this year.  That's $21 a week. By cutting that down to one lunch a week, you could save almost one thousand dollars a year.

But to put us over the edge we've got to start clipping coupons.  Websites like "grocery game" and "couponmom.com" research the lowest-priced products at your grocery store and match them with manufacturers' coupons that week cutting your grocery bill in half.  So, if each person eats $2,100 worth of groceries each year, clipping coupons just saved you more than a grand all for a total of $5,059.

    

All it takes is a little self control.

"It's a challenge, it is difficult, and it's something we need to be conscious of.  And 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," said Ogrodowski.

We want to know what your tips are for saving money while we're feeling the pinch.

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