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

222 Pages·2008·1.112 MB·English
by  KarpGregory
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Preview Living Rich by Spending Smart: How to Get More of What You Really Want

LIVING RICH by SPENDING SMART This page intentionally left blank LIVING RICH by SPENDING SMART H G M OW TO ET ORE OF W Y R W HAT OU EALLY ANT G K REGORY ARP Vice President, Publisher: Tim Moore Associate Publisher and Director of Marketing: Amy Neidlinger Executive Editor: Jim Boyd Editorial Assistant: Pamela Boland Development Editor: Russ Hall Digital Marketing Manager: Julie Phifer Marketing Coordinator: Megan Colvin Cover Designer: John Barnett Managing Editor: Gina Kanouse Project Editor: Chelsey Marti Copy Editor: Geneil Breeze Proofreader: Leslie Joseph Indexer: Lisa Stumpf Compositor: Jake McFarland Manufacturing Buyer: Dan Uhrig ©2008 by Pearson Education, Inc. Publishing as FT Press Upper Saddle River, New Jersey 07458 FT Press offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales, 1-800-382-3419, [email protected] sales outside the U.S., please contact International Sales at [email protected]. Company and product names mentioned herein are the trademarks or registered trademarks of their respective owners. All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher. 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. Pearson Education Australia PTY, Limited. Pearson Education Singapore, Pte. Ltd. Pearson Education North Asia, Ltd. Pearson Education Canada, Ltd. Pearson Educatión de Mexico, S.A. de C.V. Pearson Education—Japan Pearson Education Malaysia, Pte. Ltd. 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 For Dad and Grandpop, role models and noble men This page intentionally left blank Contents Introduction The Spending Smart Philosophy . . . . . . . .xiv Chapter 1 Financial FITness Whacking the Worst Offenders . . . . . . . . . .1 Stockpiling Food for Savings: Bodega in the Basement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Coupon Clipping Conundrum: Hassle or Goldmine?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Dining Out: Celebrations Versus Poor Meal Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Life Insurance: It’s Your Money and Your Life . . 12 Home and Auto Insurance: Don’t Pay Too Much. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Phone at Home: Pay Less for Your Landline. . . . 19 Wireless Mobile Phone: Don’t Let Them Cell You a Bad Plan. . . . . . . . . . . . . . . . . . . . . . . . 23 Chapter 2 Know Thine Enemy; It Is Us The Problem Between Our Ears . . . . . . . .27 Smart People, Dumb Spending: Fire the Accountant in Your Head . . . . . . . . . . . . . . . . . . . 28 Evaluating Value: Psychological Income . . . . . . . 32 Impulse Spending: Harness the Urge to Splurge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 No Excuses: The Lies We Tell Ourselves. . . . . . . 37 Money Personalities: What Type Are You? . . . . . 39 Shopping Addiction: “Shop Till You Drop” Ain’t Funny . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 viii LIVINGRICHBYSPENDINGSMART Chapter 3 What a Waste! Pet Peeves and Hot Buttons . . . . . . . . . . . .45 Bottled Water: Tap into Savings. . . . . . . . . . . . . . 46 Junky Insurance: Extended Warranties and Other Insurance You Don’t Need. . . . . . . . . . . . . 49 Timeshare Vacations: The Worst Real Estate Deal Ever. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Smoking: Your Money, Up in Smoke. . . . . . . . . . 54 Ink-Jet Cartridges: Refill Rage. . . . . . . . . . . . . . . 57 Lottery: Winning the Jackpot Isn’t a Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Textbooks: Get Schooled in the Alternatives. . . . 60 Hybrid Vehicles: Have a Nonfinancial Reason for Buying One . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Greeting Cards Discarded: Special-Occasion Cardboard Rethought. . . . . . . . . . . . . . . . . . . . . . 64 Chapter 4 The Big Picture Strategies for Spending Smart . . . . . . . . . .67 Comparison Shopping: What’s a Good Price?. . . 68 Tracking Spending: Forensics on Your Finances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Rules of Thumb: Benchmarks for Spending Smart. . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Buying Tactics: When the Price Isn’t Really the Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Curse of Automatic Payments: Monthly Commitments Will Haunt You. . . . . . . . . . . . . . . 79 Buying Used: Secondhand Gives You a Leg Up. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Spending Windfalls: Don’t Blow It. . . . . . . . . . . . 84 Membership Has Its Privileges: Savings by Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Shopping Online: Geek Your Way to Savings . . . 89 CONTENTS ix Chapter 5 Around the House Everyday Spending . . . . . . . . . . . . . . . . . . .93 Running Hot and Cold: Keep Your Bought Air Indoors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Gasoline: Fuel Savings with Better Mileage . . . . 98 Television: Tune In to Savings . . . . . . . . . . . . . . 100 Pets: Don’t Let Fido Sink Your Finances. . . . . . 104 Prescription Drugs: Just Say No to High Prices for Meds. . . . . . . . . . . . . . . . . . . . . . . . . . 106 Library: Free Stuff Galore . . . . . . . . . . . . . . . . . 109 Compact Fluorescents: See the Light . . . . . . . . 111 Lawn and Garden: Grow Your Savings. . . . . . . . 114 Eyeglasses and Contact Lenses: See the Price Difference . . . . . . . . . . . . . . . . . . . . . . . . . 117 Clothing: Better Duds for Less . . . . . . . . . . . . . 120 Chapter 6 Financial Foolishness Overspending for Financial Services . . . .123 Bank Accounts: Don’t Pay Anyone to Hold Your Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Credit Cards: Play the Game Right . . . . . . . . . . 127 Credit Cards II: Advanced Tactics. . . . . . . . . . . 130 Debt Reduction: Finish Paying for Your Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Index Mutual Funds: You Can’t Beat ‘em, So Join ‘em. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 Identity Theft: What Protections are Worthwhile? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137 Chapter 7 That Time of Year Seasonal Strategies for Spending Smart . .143 Back to School Spending: School Daze . . . . . . . 144 Holiday Spending: Ho, Ho, Ho. Where’d My Money Go? . . . . . . . . . . . . . . . . . . . . . . . . . . 146 Valentine’s Day on the Cheap…Without Ending Up in the Doghouse. . . . . . . . . . . . . . . . 148

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