10 Ways To Turn Money Leaks Into Big Savings

Image by Images by John 'K' via FlickrThey say, in life, it's the little things that matter. This rule also applies when it comes to your money. Many people have little money leaks that they may not even realize. Over the years these tiny amounts of money add up to hundreds of dollars. Being conscious of where your money is going is the difference between winning and losing in the money game.

I have listed 10 ways to save money and plug up those money leaks:

Savings Tips

1. Consider your needs vs. your wants. Think about items you purchase on a regular basis. These add up. Where can you save?

• Do you eat out at restaurants a lot? 
• Can you cut back on daily expenses, such as coffee, candy, soda, or cigarettes? 
• Do you have services you do not really need, such as cable television or a cell phone? 

2. Set up a direct deposit and an automatic transfer to your savings account.

• When you get paid, put a portion in savings through direct deposit or automatic transfer. 
• If you have a checking account, you can sign up to have money moved into your savings account every month. What you don’t see, you don’t miss! 

3. Pay your bills on time. This saves the added expense of:

• Late fees, extra finance charges 
• Disconnection fees for phone, electricity, or other services 
• Fees to reestablish connection if your service is disconnected 
• The cost of eviction, repossession and bill collectors 

4. If you use check-cashing stores regularly, you might be paying $3 - $5 for each check you cash. Consider opening a checking account at a bank or credit union.

5. If you get a raise or bonus from your employer, save that extra money.

6. If you have paid off a loan, keep making the monthly payments to yourself. You can save or invest the money for your future goals.

7. Avoid debt that does not help build long-term financial security. For example, avoid borrowing money for things that do not provide financial benefits or that do not last as long as the loan. Examples include: a vacation, clothing, and dinners out in restaurants.

8. Save your change at the end of the day. Take that change and deposit it into the bank (every week or month).

9. When you get a tax refund, save as much of it as possible.

10. If your work offers a retirement plan, such as 401(k) or 403(b) plan that deducts money from your paycheck, join it! Most employers will match up to $.50 on each dollar you contribute. The matched amount is free money!

Happy 35th Birthday Index Funds

Image via WikipediaIt was 35 years ago that John Bogle and the Vanguard Group launched the First Index Investment Trust that tracked the popular S&P 500 index. The fund name was changed to the Vanguard 500 in the 1980s. Bogle and his company has forever changed the investing landscape.

At the time John Bogle never thought how his idea would affect the way millions of people would invest. As a manager of mutual funds he wanted to find a way to make investing easy for the common man. At the time and even today mutual fund investing still means paying high management fees. He felt there could be a better way. His idea of a mutual fund that tracked an index and would always do as good as the market was a novel idea. It was simple and easy, without a lot of hassle. To make a good idea better he pioneered low management fees so the investor would benefit and not the broker salesman.

Bogle thought it was a travesty for the industry to make a fortune in management fees and wanted those fees to stay in the pockets of investors. He knew that even a small amount of reduced management fees kept in the investors account meant for higher returns.

We need to thank John Bogle and company for giving us the index mutual fund and the beginning of passive investing. Over the years the the inexpensive management fees has kept billions in the accounts of investors where it belongs. Thank you John Bogle!

More reading about John Bogle and Index Funds:

Wall Street Journal article titled How the Index Fund Was Born

The First Index Mutual Fund: A History of Vanguard Index Trust and the Vanguard Index Strategy.

The Power of Passive Investing

Does Prepaid Car Maintenance Save Money?

Image via WikipediaNew car buyers are often asked whether or not they want to purchase a “prepaid maintenance plan.” These are not extended warranties but plans that cover routine kinds of service to your car. But are they worth the money?

A plan could cost as much as $1,500 and can be added to the cost of a lease or purchase. Reading the fine print to see what items are covered can keep you from making a big mistake. But when a neighbor of mine got a new car and a new plan for $800, she didn’t realize it only covered oil changes and no other maintenance.

They may be pretty good moneymakers for dealers but the Better Business Bureau warns consumers to crunch all the numbers and read all the fine print.

“These kinds of plans are relatively new, so we’ve received about 100 over the past couple of years, we’ve certainly seen an uptick in the numbers,” said Rodney Davis of the Better Business Bureau.

Some unhappy customers complain maintenance plans were added to their closing paperwork without their approval or they dropped their cars off for maintenance and the work was never done. Some angry customers say the required repair shops went out of business and they couldn’t get a refund. That’s why some consumer advocates say “buyer beware.”

“These prepaid maintenance plans are a source of profit for the dealership so they’re really going to try to steer you toward that,” according to Edmunds.com Ron Montoya.

Since the plans vary, experts have a few recommendations:

• Read the details carefully to see how long it lasts and what it covers, and calculate the expenses to make sure you see savings.
• Once you buy a plan, remember, you’re stuck going to that dealer or repair shop.
• If you finance the plan with your car loan that means you’re paying interest on it, costing you more.

If you’re tempted to buy a prepaid maintenance plan, here’s an inside secret to getting the best deal.

We’ve been told dealers mark them up, up to 50-percent, so you know to try out offering half the price and then they may counter the offer and you can meet somewhere in between.

Always remember to check out the plan closely and don’t be rushed into signing anything. Edmunds.com offers a maintenance cost calculator that will estimate the scheduled maintenance costs for cars.

Some high-end car makers now offer free maintenance plans in the purchase price. If you plan on moving or selling your car before the plan is up, make sure it’s transferrable.

Startup CakeHealth.com Wants To Be Your Mint.com For Managing Your Healthcare Expenses

Cake Health is an online system that helps users understand and manage their health care. They have recently opened it to the public. Cake Health provides a central place to track all your healthcare plans online. It updates your plan status so you know what’s covered, automatically categorizes your claims, tracks your out-of-pocket expenses and alerts you to possible overcharges.

“Eight out of every 10 medical bills have mistakes,” said Rebecca Woodcock, co-founder and CEO of Cake Health. “We don’t think managing your healthcare dollar should be difficult. We developed Cake Health to help subscribers regain control of their health by helping them get the most out of their healthcare spending.”

Once a consumer signs up with Cake Health, getting started is easy. The new subscriber adds their insurance login information into their account and Cake Health does the rest. The service will monitor and analyze claims, dynamically update the policy information to reflect claims, insurance payments and deductible payments and search for potential billing mistakes like mismatched medications, double entries and other common errors.

Three key features to Cake Health include:

Cake Health Money Manager: A service that pulls together insurance benefit information as well as billing information from medical providers. Subscribers will see, in an easy-to-understand method, what coverage they have, where their healthcare dollar is spent and, in many cases, identifying benefits they didn’t realize they had.

Cake Health Plan Matcher: A unique recommendation engine that identifies healthcare plans based on a subscriber’s actual healthcare spending, individual requirements and history.

Cake Health Mobile: A bill capture feature for the iPhone and available through iTunes. With Cake Health Mobile, subscribers simply take a picture of their medical bills, and Cake Health Mobile reads the image and automatically populates their account. In addition, subscribers can scan documents and forward them to Cake Health via email at docs@cakehealth.com.

The healthcare system today is run like amateurs today. Having a reliable dashboard online to monitor your claims and benefits is desperately needed. You can use you insurers website but there is a lot of things there and often are hard to navigate. CakeHealth.com takes down the wall between insurers and consumers. Here you will find cost, coverage, and procedures plainly spelled out.