Living Rich by Spending Smart: How to Get More of What You Really Want

159 Pages·2008·1.29 MB·English

by  Gregory Karp

Living Rich by Spending Smart
How to Get More of What You Really Want

Gregory Karp
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Printed in the United States of America
First Printing January 2008
ISBN-10 0-13-235009-2
ISBN-13 978-0-13-235009-9
Pearson Education LTD.
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Library of Congress Cataloging-in-Publication Data
Karp, Gregory.
Living rich by spending smart : how to get more of what you really want / Gregory Karp.
p. cm.
ISBN 0-13-235009-2 (pbk. : alk. paper) 1. Budgets, Personal. 2. Home economics—
Accounting. 3. Finance, Personal. I. Title.
HG179.K374 2008
332.024—dc22
2007035095
Dedication

For Dad and Grandpop,
role models and noble men
Contents

Introduction: The Spending Smart Philosophy
Chapter 1 Financial FITness: Whacking the Worst Offenders
Stockpiling Food for Savings: Bodega in the Basement
Coupon Clipping Conundrum: Hassle or Goldmine?
Dining Out: Celebrations Versus Poor Meal Planning
Life Insurance: It's Your Money and Your Life
Home and Auto Insurance: Don't Pay Too Much
Phone at Home: Pay Less for Your Landline
Wireless Mobile Phone: Don't Let Them Cell You a Bad Plan
Chapter 2 Know Thine Enemy; It Is Us: The Problem Between Our Ears
Smart People, Dumb Spending: Fire the Accountant in Your Head
Evaluating Value: Psychological Income
Impulse Spending: Harness the Urge to Splurge
No Excuses: The Lies We Tell Ourselves
Money Personalities: What Type Are You?
Shopping Addiction: "Shop Till You Drop" Ain't Funny
Chapter 3 What a Waste!: Pet Peeves and Hot Buttons
Bottled Water: Tap into Savings
Junky Insurance: Extended Warranties and Other Insurance You Don't Need
Timeshare Vacations: The Worst Real Estate Deal Ever
Smoking: Your Money, Up in Smoke
Ink-Jet Cartridges: Refill Rage
Lottery: Winning the Jackpot Isn't a Financial Plan
Textbooks: Get Schooled in the Alternatives
Hybrid Vehicles: Have a Nonfinancial Reason for Buying One
Greeting Cards Discarded: Special-Occasion Cardboard Rethought
Chapter 4 The Big Picture: Strategies for Spending Smart
Comparison Shopping: What's a Good Price?
Tracking Spending: Forensics on Your Finances
Rules of Thumb: Benchmarks for Spending Smart
Buying Tactics: When the Price Isn't Really the Price
Curse of Automatic Payments: Monthly Commitments Will Haunt You
Buying Used: Secondhand Gives You a Leg Up
Spending Windfalls: Don't Blow It
Membership Has Its Privileges: Savings by Association
Shopping Online: Geek Your Way to Savings
Chapter 5 Around the House: Everyday Spending
Running Hot and Cold: Keep Your Bought Air Indoors
Gasoline: Fuel Savings with Better Mileage
Television: Tune In to Savings
Pets: Don't Let Fido Sink Your Finances
Prescription Drugs: Just Say No to High Prices for Meds
Library: Free Stuff Galore
Compact Fluorescents: See the Light
Lawn and Garden: Grow Your Savings
Eyeglasses and Contact Lenses: See the Price Difference
Clothing: Better Duds for Less
Chapter 6 Financial Foolishness: Overspending for Financial Services
Bank Accounts: Don't Pay Anyone to Hold Your Money
Credit Cards: Play the Game Right
Credit Cards II: Advanced Tactics
Debt Reduction: Finish Paying for Your Purchases
Index Mutual Funds: You Can't Beat 'em, So Join 'em
Identity Theft: What Protections are Worthwhile?
Chapter 7 That Time of Year: Seasonal Strategies for Spending Smart
Back to School Spending: School Daze
Holiday Spending: Ho, Ho, Ho. Where'd My Money Go?
Valentine's Day on the Cheap...Without Ending Up in the Doghouse
Tax Preparation: Frugal Ways to Pay Uncle Sam
Wedding Gifts: An Invitation Is Not an Invoice
Kid Birthday Parties: Rein in the Ridiculous
Amusement Parks: Costs Shouldn't Take You for a Ride
Vacation Accommodations: Hotel Versus Home Rental
Chapter 8 Life Happens: Big-Ticket Infrequent Spending
How Much Car Can I Afford?—Less Than You Think
Why Buy Used? You're Not Buying Someone Else's Problem
How Much House Can I Afford? Don't Be "House Poor"
Moving Costs: Getting Your Stuff from Here to There
Wedding Spending: Like Marriage, It's About Compromise
College Tuition: The Two-Year, Two-Year Plan
Divorce: Spending Less on Splitting Up
Hospital Bills: Rampant Mistakes Are Sickening
Funerals: Try to Bury the Pain and Guilt
A Final Thought: Buying Happiness
Index
Acknowledgments

In 2003, Tribune Co. was creating a new personal finance section that would be available to all its
newspapers, including the one where I worked, the Allentown (PA) Morning Call. That's when I
successfully proposed a new kind of consumer column that I would write. We would call it "Spending
Smart." It was first published in January 2004.
"Spending Smart" was an instant success with the millions of readers who buy Tribune Co. newspapers,
which include the Chicago Tribune, Baltimore Sun, Hartford Courant, and Orlando Sentinel, among others.
The column's success did not stem from my journalistic prowess. Rather, the topic of spending your money
smarter struck a chord with readers. They had plenty of financial writers advising them on how to manage
their extra money. But they didn't have someone telling them how to accumulate that money in the first
place—how to spend their money smarter so they had some left over to manage. That's why they love the
"Spending Smart" column.
Since the first column rolled off the presses, literally hundreds of readers have written and phoned with
praise and criticism, both of which were invaluable. I am grateful and indebted to those readers.
"Spending Smart" the newspaper column—the genesis of the idea for this book—would never have
achieved liftoff without initial and continuing support from several top-quality editors at the Morning Call.
They are former Business Editor Michael Hirsch, Managing Editor David Erdman, and Editor Ardith
Hilliard. I thank them for that.
This book also benefited from many of the experts I talked to along the way. They are far too numerous to
mention by name, but I thank them nonetheless.
Thanks also to the folks at Pearson Prentice Hall, including Executive Editor Jim Boyd and Developmental
Editor Russ Hall. Thanks too, to manuscript reviewers Liz Pulliam Weston, an author who also writes
columns for MSN Money, and Cynthia Smith.
Thank you to Coach Deb, who helped me figure out what I wanted to do with my professional life. Those
Sunday evening coaching sessions by phone led directly to this book. Thanks, sis.
Finally and most importantly, I want to thank my immediate family for unwavering support. There were too
many times when Daddy couldn't pay enough attention to Jacob and Michael because he was cooped up in
the home office tapping away at the computer keyboard at night, on weekends, and during holidays. And to
my wife, Rebecca, thank you for your constant encouragement and boundless optimism. You are my
inspiration.