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Trick yourself into saving

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Follow these simple steps and you wont feel any pain.
You dont have to strike it rich on Wall Street, win the lottery or even earn a six-figure salary to build a comfortable savings cushion. You just have to play a few mental tricks on yourself to stay focused on spending less and keeping more cash. Small steps yield big results, and the best savings tips are the simplest. In fact, each of them could fit in a 140-character tweet.

Build an emergency fund

Upper Marlboro, Md., first appeared in Kiplingers Personal Finance in November 2007, when she shared her strategies for getting out of $7,000 in credit card debt. We recently checked back with Campbell, now 31, who has since discovered the value of a rainyday fund. Campbell was laid off from her job of five years in November 2009 and was out of work until April 2010. But thanks to my savings and keeping my bills to a manageable amount, I was not worried or drastically affected, she says. I found out how important it is to keep money in an emergency fund. Campbell kept six months worth of expenses in her rainyday stash and reduced her monthly bills by paying off her car loan, having zero credit card debt, eliminating cable TV for a year and finding a very low-cost phone plan. As soon as she found a new job, she focused on rebuilding her reserve fund, which paid off when she had a baby last year and took 16 weeks of unpaid maternity leave. Campbell is now back at work and rebuilding her savings for future needs. Thanks to my financial discipline, any life changes and/or setbacks do not hit me hard financially, and thats a great thing, she says.

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CINDY CAMPBELL OF

2012 by the Kiplinger Washington Editors Inc., 1100 13th St., N.W., Suite 750, Washington, DC 20005 BUDGETING/SAVINGS CREDIT INVESTING FAMILY FINANCES

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Start now. Dont wait till you make more money. The more you make, the more you spend.
Start small. Even $100 per paycheck will add up over time (to see how much, go to www.bankrate .com/calculators.aspx). Keep your budget and your goals simple. Zeroing in on your main objective will help you stay on course. Write down specific goals. That makes them more real. Pledging to save $2,000 for a beach vacation is likely to get you there. Set up an account for each goaleducation, vacation, car, computeror for large, recurring expenses, such as insurance premiums. Have your boss (or your bank) take money off the top of your salary for retirement or some other goal. Youll never miss it. Toss spare change into a bank or glass jar and watch your money grow into enough to pay for holiday gifts or even a vacation. Toss yourself spare change into a bank or glass and Give an instant reward. Eachjar time you watch your money grow into enough to pay brown-bag your lunch instead of eating out,for toss holiday gifts or even vacation. the savings into your a cash jar. Keep writing the check after you pay off a loan or a bill, and send it to a savings or investment account.

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CINDY CAMPBELL HAS TAPPED HER RAINY-DAY SAVINGS FOR A JOB LAYOFF AND UNPAID MATERNITY LEAVE.

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Beat pesky bank fees

Credit unions are a good source for free checking accounts; 78% of the credit unions surveyed by Bankrate .com in 2011 offered free accounts, compared with only 45% of the banks surveyed. In addition, most credit unions have no minimum balance requirement. Community banks are another good option. Find a credit union at www.culookup.com or www .asmarterchoice.org, and a high-yield checking account at www.checking finder.com. To avoid annoying ATM fees, open an account with an online bank such as Ally, Schwab or USAA, all of which rebate customers ATM fees. With an account at Citibank, which has more than 1,000 U.S. branches and 29,000 ATMs, chances are youll always be close to a free ATM. Another option is to have your account at a bank or credit union that belongs to the Allpoint network, with its 43,000 surcharge-free ATMs. In most cases, if you dont give a bank permission to enroll you in an overdraft-protection plan, your ATM withdrawals and debit card transactions will be declined if your balance is too low, and you will avoid any fees. However, this doesnt apply to checks and automatic payments. You can circumvent the typical $35 overdraft fee on these transactions by linking your account to a savings account or line of credit. If your balance dips below the total of the checks being processed that day, your bank will move the necessary funds and generally charge a $10 transfer fee per check. Signing up for free alerts on your phone or by e-mail can cut down on bank fees and thwart fraud. Your bank will notify you if your balance dips below the amount you specify; if a payment is due; if a transaction has occurred in your checking, savings or credit card account; or if your online ID, password or mailing address has been changed.

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Let Uncle Sam help you pay for it

Put short-term cash to work Be sure all your bank deposits are insured

Use flexible spending accounts to escape taxes on essential expenses.

nate the amount to be deducted from your salary each payday, starting at the beginning of the year. For now, your employer sets the maximum amount you can contribute (in 2013, the maximum for all plans will be $2,500); your contributions avoid federal, state and local income tax as well as Social Security and Medicare taxes. The money can be withdrawn as reimbursement for qualified health expenses, such as copayments, eyeglasses and contact lenses, and the cost of prescription drugs. (As of 2011, you can no longer use money in the account for nonprescription drugs.) If you dont use the money by the end of the plan year or, with some employers, by March 15 of the following year, you lose whatevers left in the account.
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HEALTH CARE SPENDING ACCOUNTS let you desig-

let you set aside up to $5,000 a year in pretax dollars to cover child care expenses for children under age 13, or day care for a disabled spouse or dependent. To qualify for this benefit, you must be employed, looking for work or a full-time student. As with the health spending account, if you dont use all the money by the end of the plan year, you lose the remaining amount.

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DEPENDENT CARE ACCOUNTS

aside pretax contributions for commuting expenses, such as bus fare, train fare or parking. In 2012, the monthly maximum you can contribute for parking is $240; for other commuting expenses, the max is $125. These plans typically let you adjust your contribution amount during the plan year, and they dont have the use it or lose it rule.
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TRANSPORTATION SPENDING ACCOUNTS allow you to set

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Take advantage of perks from your plastic

CONCIERGE SERVICES. Theyre available 24 hours a day for Visa Signature, World and World Elite MasterCard customers, as well as American Express platinum cardholders, to help you get tickets to soldout events, book travel, make dinner reservations and find unusual gifts. TRAVEL ASSISTANCE. If you become ill while traveling or your passport is lost or stolen, Visa, MasterCard and American Express will provide referrals to medical care, legal aid and help replacing your passport (you pay the costs of the services you receive).

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REWARDS POINTS AND CASH BACK ARENT THE

Pick the right rewards card

Deciding between a cash-back card and a travel rewards card? Cash-back cards, such as Chases Freedom card, may let you redeem your points periodically for cash, travel, gas or merchandise, or post a credit to your account. Or you could select the Fidelity Investment Rewards American Express card, which automatically deposits the cash in your brokerage account. Travel rewards cards, such as the Simmons First Visa Platinum Rewards card and the PenFed Premium Travel Rewards American Express card, generally require at least 22,000 points for a roundtrip ticket to fly anywhere within the contiguous 48 states. A cash-rebate card is probably a better option if the travel card has an annual fee and you dont spend enough to accumulate the points you need for a flight within a year or two. And if you tend to carry a balance on your card, note that the extra cost of paying interest would probably offset any rewards youd earn on your purchases.

only goodies that come with credit cards. Your card may also offer valuable perks that are less well known.
WARRANTIES. Gold and platinum

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MasterCards, Visa Signature cards, and American Express cards all extend the manufacturers warranty by up to one year when you purchase an item with your cardeven for products you buy overseas.
PURCHASE PROTECTION. If, for example, your iPad is stolen from your hotel room, MasterCard and American Express will reimburse you if you paid for the room with a gold or platinum card. Drop that new iPad and Visa Signature cardholders can have it repaired or replaced at a cost of up to $500 within 90 days from the date of purchase. Citibank and American Express offer protection up to $1,000. LUGGAGE PROTECTION. Was your luggage lost or damaged by the airline on your last flight? If you paid for your ticket with a Visa Signature card, you can be reimbursed for up to $3,000. RENTAL-CAR COVERAGE. You may decline collision damage waiver (CDW) insurance if you paid with most Visa, MasterCard, American Express or Discover cards.

CONCIERGE SERVICES FOR SOME CARDS CAN HELP YOU GET TICKETS TO SOLD-OUT EVENTS.
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KIPTIP

Check your credit report

Its smart to regularly review your credit report, which includes such information as loan and credit card balances and payment history. Checking your report is especially important before you apply for a loan. At Annual CreditReport.com, you can get a free report from each of the three major credit bureausEquifax, Experian and TransUniononce a year. In addition to surveying your credit health, check the report for errors. If you find a mistake on one report, get reports from the other two bureaus to see if theyre also in error. To resolve the issue, you may have to contact the lender involved, which could be giving inaccurate information to the reporting agencies. File a dispute with each bureau at which the error shows up, and include evidence, such as a letter from the lender, to support your claim. You should get a response from the agency within 30 days.
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SAM MARCUS DISCOVERED THAT A SKIMPY CREDIT HISTORY CAN PUT A LOW-RATE CREDIT CARD OUT OF REACH.
PHOTOGRAPH BY POON WATCHARA-AMPHAIWAN

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KIPTIP

Polish your credit at every life stage

STARTING OUT MIDLIFE
Your credit score could recover from a bankruptcy, foreclosure or loan default in a few years.

Take our quiz to test your credit IQand see how to boost your score.
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Once youve built a solid credit history, it will stay with you forever.

A bad credit historylate payments and mounting debtis the biggest roadblock to getting the best rates.

FACT FICTION
FICTION It wasnt mounting debt or FACT

FACT FICTION If you have a long credit history and you previously managed your credit well, your score could bounce back to decent standing in a few years if you return to good habits and start paying your bills on time, says Barry Paperno, consumer affairs manager for MyFico.com. He also suggests adding positive credit information to your file to counteract the negative. For example, open a secured card, keep the balance low and pay it off monthly. Six months later, apply for another secured card. Within three to five years after filing for bankruptcy, your score could rise enough to get a standard, unsecured credit card. But any card issuer involved in your bankruptcy is unlikely to extend credit to you again. Some lenders require that a set period pass before they will offer credit to a customer who has declared bankruptcy. And youll have to wait three to seven years after a foreclosure to get a mortgage backed by Fannie Mae or Freddie Mac (two to seven years after a deed in lieu of foreclosure or short sale), depending on the reason for the problem and how much money you can put down on a new home.

FACT FICTION
FICTION As a retiree, you may have

late payments that kept Sam Marcus, 25, from being approved for a PenFedAmerican Express Card last winter. Rather, the lender told him, it was a lack of action in his credit file. All that appeared on his credit report at the time, Marcus says, were a student loan and his history as an authorized user on his parents credit card. Twentysomethings with thin credit records often have trouble getting the most desirable rates. But there are ways to beef up your profile and boost your credit score. Try applying for a credit card through your bank or credit union. Credit cards from retailers are often easier to get than standard cards. Or get a secured credit card; your transactions will be reported to the credit bureaus. Marcus eventually qualified for a Blue Card from Amex, which considers, among other criteria, income and assetspossibly a factor in his applications approval. After a 12-month period featuring a 0% rate, Marcuss APR for the Blue Card will jump to 20.24%, but after a year he can apply for a lower rate.

banished credit from your life. Perhaps youve paid off your mortgage and other loans and now use your debit card for purchases instead of a credit card. You should be aware that your credit score could disappear along with the debt. To have a FICO score, you must have an account that has been open for at least six months, and the account must have been reported to the credit bureaus in the past six months. To ensure that you have an active account thats reported to the credit bureaus, use at least one credit card just a charge or two per month is all it takes. You can pay it off monthly and still revive your score. Even if you cant think of any compelling reason to have a credit score now, it will be crucial if you eventually decide to, say, take out a home-equity line of credit, open a rewards credit card or cosign a loan for a family member.

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C credit card fees abroad Cut T Three essential rules to raise y your score

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KIPTIP

Dont get soaked by rising inflation

threat of inflation isnt Treasury inflation-protected securities (TIPS). Its not gold, either. For long-term investors, the ultimate hedge is stocks. Consider this: The consumer price index has risen tenfold since January 1947. Over the same period, Standard & Poors 500-stock index climbed about 80-fold. To give things a more recent spin, we pitted the CPI against a portfolio of 60% domestic stocks and 40% international stocks. Over the ten-year period from 2002 through 2011, the CPI climbed 2.4% annualized, but our 60-40 stock portfolio returned 3.6% a year (and that includes the wipeout year of 2008). Should you be worried about inflation? Near term, no. Like most analysts, we expect inflation to clock in at 2% in 2012 and possibly into 2013. But longer term, many experts see the inflation rate rising.

KIPTIP

Pay less tax

Turn your investment losers into winners by using them to cut your tax bill. Youll have to sell your investment to do so, and the assets must not have been held in a tax-deferred account, such as an IRA. If youve got losses that qualify, you can use them to offset any capital gains you pocketed that year. Youll need to match up your long-term capital gainson investments held for more than one yearwith long-term losses, and match up short-term gains (held for one year or less) with shortterm losses. Do your losses exceed your gains? Use the excess to write off up to $3,000 of ordinary income. If you still have leftover losses, you can carry them forward to offset capital gains and up to $3,000 of ordinary income in future years.

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THE BEST DEFENSE AGAINST the

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Turn a deaf ear to these dubious tipsters

A friend tells you the company he works for is about to get a takeover bid. Dont rush out to buy the stock. Theres a good chance you could be accused of insider trading.

He may be smart, but that doesnt necessarily mean his advice is going to pan out. Do you really want to jeopardize your relationship with himand your sisterover a few bucks?

When was the last time following the herd helped you score decent money? Internet stocks? Real estate? Adhering to groupthink is always baaaaaa-d news for your investments.

Often found in boiler rooms, they ring you up out of the blue and try to sell you whatever it is theyre promoting that day. Cold callers care little about you and care mostly about their commissions.

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INSIDERS

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THE HERD

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Make the most of low-cost ETFs
Exchange-traded funds, created to let investors easily track a market index, have become increasingly complex. Here are four rules for making the most of ETFs: Pick the right index. Most ETFs track an index, so your first call is to pick the index you want to replicate, be it one that follows, say, big U.S. stocks, the health care sector or foreign bonds. Keep costs low, part I. If two or more funds track the same index, use the ETF with the lowest expense ratio. Keep costs low, part II. Use an online broker that lets you trade certain ETFs without charging commissions. Use limit orders when buying and selling. ETFs can be volatile. Its best to place an order establishing the price at which youre willing to buy or sell.

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Get a dividend every month Investing rules of thumb

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Give your portfolio an annual checkup

horizon. Put your emergency money in cash-type investments, such as Treasury bills and moneymarket deposit accounts. Stash your mediumterm moneycash youll need in three to five yearsin bonds and fixed-income instruments that mature when you need it. Invest for longterm goalsten or more years awayin a diversified basket of stocks or stock funds. CHECK THE BILL. Calculate what you paid in fees the previous year, such as brokerage commissions, asset-based money-management fees, miscellaneous charges and mutual fund expenses (estimate by multiplying each funds expense ratio by the amount you have in it). The sum may shock you. Cut costs by moving to cheaper funds, using a discount broker or negotiating a better rate with your adviser.
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FIRST, TAKE ITS PULSE. The market had a rough ride in 2011how did your portfolio do? Compare the returns of your stocks, bonds and funds with an appropriate benchmark, such as Standard & Poors 500-stock index or a general bond index. Which investments beat their benchmarks, and which lagged?

TALKING HEADS
Of course the potash analyst appearing on CNBC thinks potash stocks are a steal now. Just as real estate agents always say its a good time to buy a house. Dont invest on the basis of a sound bite.

SCREEN FOR SERIOUS ILLNESSES. Examine the laggards to figure out why theyve underperformed and whether its time to sell. Does the fund have a new manager? Or did the funds investment strategy change? Likewise, for a declining stock: Has the outlook for its sector deteriorated? Have you lost confidence in the companys managers? PRACTICE PREVENTIVE MEDICINE. Make sure your allocation matches your goals and your time

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KIPTIP

Know when to sell a stock

PICKING A WINNER IS ONE THING. KNOWING WHEN TO SELL IT IS

another. The pros sometimes set target sell prices for the stocks they buy; when the share price hits the target, they unload their shares (doing so takes the emotion out of selling, so they say). Of course, fundamental problems are cause for pulling the trigger, too. Use the following checklist as a starting point to figure out whether its time to bail on your shares in a particular company:

Find a financial adviser who matches your needs

EVERYONE WHO NEEDS HELP WITH HIS OR HER MONEY

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The companys got a major product with strong head winds. (Examples: Eastman Kodak and its camera film, Research in Motion and the BlackBerry)

The outlook for the company or its industry has deteriorated significantly. (Examples: bank stocks, newspaper stocks)

Management has left, or youve lost confidence in it. (Examples: Olympus, Avon, HewlettPackard)

The companys earnings outlook has been chopped for several consecutive quarters. (Examples: Barnes & Noble, Best Buy)

wants to know how much its going to cost, and thats all over the map. Some pros charge by the hour; some have an annual retainer plus occasional hourly fees; others work for a percentage of the investments you ask them to manage; and still others have opaque multiple pricing arrangements. Choose an arrangement you feel comfortable with and an adviser whos upfront about billing. A good adviser will list fees on his or her Web site. Remember, though, that what you pay isnt as important as who you pay. Take your time screening financial pros and conducting introductory interviews. Good advisers will spend time evaluating your situation before they make a proposal. Ask plenty of questions, and be sure you cover these five critical points:

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Keep mutual fund fees low

charges 0.50%. If the S&P 500 earns a total return of 8%, Vanguard clients take home 7.94%, and Dreyfus investors get 7.5%. Over the course of a single year, thats not a big deal. But if your $10,000 is left invested for 30 years at that return, youd have $117,304 in the Vanguard fund but only $101,907 in the Dreyfus product. The more you invest and the longer your money is working, the more the fee differential matters.
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WHAT CAN YOU DO FOR ME? Financial advisers are not miracle workers. They are trained to be problem-solvers, so be specific about what youre looking for. Are you juggling saving for your kids college and your retirement? If you need more monthly income, how would he or she (or the team) restructure your investments? If you want to buy a business, what will be the consequences if it doesnt work out right away and you need more capital? Can the adviser help you with a business plan? Do you want to begin making donations to schools and charities from your estate? Youre looking for an adviser with the skills and resources to add value. DO YOU HAVE CLIENTS LIKE ME?
Ask every potential adviser how he or she handles cases that are similar to yours. The more acute your needs, the more specific knowledge youll require about such things as taxes, insurance and investment risk. You cant afford to retain someone who rarely deals with your concerns, no matter how good his credentials and testimonials.

Investors cant control the markets, but they can control the amount they pay in fees. The less you pay, the more you pocket. Even small differences can have a huge impact over time. Consider two otherwise identical index funds that track Standard & Poors 500-stock index one offered by Vanguard (symbol VFIAX), the other by Dreyfus (PEOPX). The Vanguard fund charges 0.06% a year; Dreyfus
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ARE YOU CONSERVATIVE OR AGGRESSIVE? Some advisers think anything

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other than a certificate of deposit or a Treasury bond is risky. Others insist that stocks will beat everything else in the long run and arent afraid of edgy ideas. If you want a portfolio redo, be sure the adviser not only asks you for initial input but is also in sync with your temperament.

open the mail? What services and financial information will you get as a client online behind a firewall?

WHAT IF I HAVE A QUESTION? Its okay to agree on formal sit-downs with your adviser twice a year, but if you want more frequent consultations, you should be able to call without getting dinged for $150 every time. Are assistants qualified to do more than

ARE YOU AVAILABLE? You dont need a celebrity whos in the profession more to promote himself than to help his clients. If an adviser already manages hundreds of accounts, look elsewhere. An independent planner or a small group practice isnt necessarily the best option, but advisers affiliated with national financial firms are more likely to have bosses up the line who are watching the volume of business they produce. That may not be in your best interests.

JIM BASTARDO

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Take home-office tax breaks

Karen Baca Ostrom has been running a business from her Los Angelesarea home for years, but she never claimed home-office deductions because they appeared to be more trouble than they were worth. Now that Ostrom, a court reporter, is living in a rental following her 2011 divorce, she is having second thoughts. Home-office writeoffs are simpler and far more compelling for renters than for homeowners. It seems like its at least worth considering, says Ostrom. People who operate a business from home have access to a number of potentially lucrative tax breaks, but the home-office deduction can be a mixed bag. Thats because homeowners who itemize deductions can already write off their biggest expenses: home mortgage interest and property taxes. Home-office deductions simply allow you to claim a portion of your utility and repair bills, as well as depreciation on the presumably small portion of the house thats used exclusively as an office. That can add up to a relatively small tax breakand it comes with strings. The depreciation may need to be recaptured when the home is soldmeaning Uncle Sam wants you to give back some of the depreciation benefits you claimed. Taking a home-office deduction is widely believed to be a red flag that triggers an IRS audit. But for a renter, a home-office deduction is far simpler, says Philip J. Holthouse, partner at the Los Angeles tax-accounting firm Holthouse, Carlin & Van Trigt. You simply figure out what portion of the apartment or house is used solely as office space and multiply that by the rent. Establishing your home as your office can also allow for higher mileage deductions, says Jennifer MacMillan, a Santa Barbarabased tax specialist. For Ostrom, it would mean that every time she drives to court or meets a client, her round-trip from home is deductible at 55.5 cents per mile. Log your mileage, MacMillan advises, because small-business owners are more likely to be audited than wage earners. But honest taxpayers who are organized should not have a problem supporting their deductions.

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KAREN OSTROM CAN CLAIM A HOST OF TAX BREAKS RELATED TO HER HOME OFFICE.

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KIPTIP

Protect your identity

How to keep sensitive information out of the clutches of ID thieves.

SECURE GOVERNMENT IDS.

Keep your passport, birth certificate and Social Security card in a safe-deposit box or other secure place; never carry your Social Security card in your wallet. Dont reveal personal details over the phone or enter them online unless its absolutely necessary. Before you divulge information, ask why its needed.
HIDE THE PAPER (AND ONLINE) TRAIL. Shred loan applica-

crack by using symbols, uppercase and lowercase letters, and jumbled words.
MONITOR YOUR CREDIT REPORT.

OTHER TAX BREAKS FOR BUSINESS OWNERS:

100% of health insurance premiums for the business owner and his or her family Expenses for office equipment and supplies Business meals and travel Small-business retirement plan contributions up to 25% of income, or $50,000 in 2012

tions, bank statements and insurance forms before you toss them. To avoid hightech identity thieves, never bank online using a public computer or public Wi-Fi over an unsecured network. When you are entering information online, look for https at the beginning of the URL. That means the site is secure. Make your passwords hard to

Look for bogus transactions or errors in your credit report by routinely checking your report at Annual CreditReport.com. Youre entitled to receive one free copy from each of the three major credit bureaus every year. Stagger your requests and you can check your report every four months. Also pay close attention to credit card bills so you can spot any unauthorized charges. If youve been a victim of ID theft, contact one of the credit bureaus (Experian.com, Equifax .com or Trans Union.com) to file a fraud alert, which will require lenders to attempt to verify your identity before issuing any new credit in your name.

KIPTIP

Track down lost loot

Billions of dollars in cash is forgotten but not gone, languishing in dormant bank accounts and elsewhere. Start your treasure hunt by checking www.unclaimed.org and www .missingmoney.com for links to state databases of unclaimed or abandoned property. Be sure to search records in any states where you lived and worked in the past. (To look for unclaimed funds from accounts at banks that closed between 1989 and 1993, go to www2.fdic.gov/funds.) Think youre missing a tax refund? Visit www.irs.gov and use the Wheres My Refund? tool. And at www.treasuryhunt.gov, see whether you have any unredeemed savings bonds. Caveat: Only series E bonds issued in 1974 and after are listed on the site.

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Reshop your auto, home and life insurance

average in high school or college, moves away for college without the car, or takes a defensive-driving course. Also let the insurer know if you switch jobs and have a shorter commute, or you retire and no longer commute at all. To get price quotes for auto insurance, go to www.insweb .com or www.insurance.com, or go to insurers Web sites, such as www .allstate.com, www.statefarm.com, www.progressive.com and www .geico.com. And you can find an independent agent at www.iiaba.net.
Boost your home insurance deductible from

Reshop auto coverage whenever you have a life change say, when you move, get

married or divorced, add a teenage driver, or buy a new car. Auto insurers have different underwriting sweet spots. The company that offers the best deal for a couple, for example, may not offer the best rate when you add a teenage driver. Raising your deductibles can lower your premiums and keep you from filing small claims that could cost you a claims-free discount. For example, boosting your deductible from $200 to $500 can reduce your collision and comprehensive auto insurance premiums by 15% to 30%; raising it to $1,000 can save you 40% or more. Dont overlook discounts, either. Each insurer is different, but tell the company if your teenager maintains a B
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ator, or if you add storm-proof shutters or make other weather-related renovations. Those could trim your premiums by 5% to 10% each. And dont overlook the price breaktypically 10% on each policyif you have auto and homeowners policies with the same insurer.
Life insurance rates have plummeted over the past decade, and you may now find a lower-cost policy even if youre older. Ten years ago, it wasnt unusual for a 40-year-old man to pay $670 per year for a $500,000 20-year term-insurance policy. Today, at age 50, he could buy a ten-year term policy for just $485, if hes healthy. You can get term insurance rates from dozens of companies at www.accuquote.com and www.lifequotes.com.
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$500 to $1,000 and you could reduce your premiums by up to 25%. Take advantage of discounts: Let your home insurer know if you install an alarm system or an automatic backup generCREDIT INVESTING

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KIPTIP

Toss paper files you dont need

Reclaim your desk! We tell you which files to trash and which to stash and the best ways to turn the keepers into digital records.
all of your old tax returns, and hang on to the supporting documents for three years after a returns filing due datesix years if you have self-employment income (some states require records from earlier years in an audit). Hold year-end investment statements and records of stock and mutual fund purchases as long as you own them. (For more on tax-related recordkeeping, see IRS Publication 552, Recordkeeping for Individuals.) Keep records related to your current home, including proof of the purchase price and receipts showing what youve spent on improvements. (You can toss those documents three years after you sell the house.) Also keep files with information on contributions and withdrawals from IRAs and 401(k) plansespecially documents regarding nondeductible contributions, such as copies of IRS Form 8606, to avoid paying too much tax on withdrawals.

KEEP

Form W-2; and monthly bills for utilities, cable and credit cards, unless you need them for tax purposes. Shred any documents that include your Social Security number, account numbers or other information you wouldnt want in the hands of an identity thief.

DIGITIZE your records

to keep paper clutter to a minimum. Save PDFs or scanned images of files on your computer and back them up on a flash drive or external hard drive, or snap pictures of receipts with your smart phone the Shoeboxed app (for iPhone and Android) will organize them as IRS-accepted images in a secure and searchable archive. Access your files from any computer with free, secure online storage options, such as Manilla.com (which organizes your bills and saves unlimited documents in the sites secure database as long as you have an active account) or Windows Live SkyDrive (with 25 gigabytes of free space). Other options include the Amazon Cloud Drive and Apple iCloud (each with 5GB of free storage) and Dropbox.com (2GB of free space). Extra storage is available on all three for a fee.
HOM ME CO LEGE COL CO
04/2012

TRASH bank withdrawal and deposit slips, credit card receipts and ATM receipts once youve compared them with your monthly statement; paycheck stubs after you check them against your
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KIPTIP

Spend hundreds less on health care without sacrificing quality

Many people are shouldering a larger portion of their health care expenses. But using a few key strategies can cut your costs.

DRUGS
Switching to generic drugs is one of the easiest ways to save especially now that some big-name medications, such as Lipitor, have gone generic. Some brand-name drugs dont have a generic clone but do have a therapeutic equivalent, which is in the same class of drugs but is a little different chemically. You can look up generics and therapeutic equivalents at www .drx.com (or through your insurers Web site) and also see how much you can save by using mail order. Ask your doctor about lower-cost alternatives.

HOSPITAL BILLS
Physicians often work at outpatient surgery centers as well as hospitals, and the cost of treatment can vary widely by location even though youre getting care from the same doctor. Before scheduling a procedure, ask whether the doctor works at any other facilities. Then call the hospitals or outpatient centers to compare costs. Fees for the doctor and the anesthesiologist might be the same, but youre likely to save on the facility fee.

TESTS AND X-RAYS

Different facilities charge vastly different prices for x-rays and tests. The average in-network cost of an MRI at a hospital tends to be twice the cost at an independent radiology facility. When doctors order a lab test or an x-ray, they write a requisition form, and just like a prescription, youre free to fill it at any facility. Many insurers offer Web tools that show costs for various facilities under your plan, and you can look up fair prices for medical tests at www.healthcare bluebook.com.

EMERGENCY CARE
If you dont need to go to an emergency room, you can save hundreds of dollars by getting treatment at an urgentcare center or conveniencecare clinic (such as Minute Clinic at CVS). Some insurers boost the coinsurance rate for non-emergency visits to the ER and waive the coinsurance payment entirely for conveniencecare centers. Or you may be able to get free advice from your insurers 24-hour nurse hotline.

PREVENTIVE CARE
Make the most of new laws that require insurers and Medicare to provide certain preventive procedures, such as blood-pressure and cholesterol tests, mammograms and colonoscopies, flu shots, routine vaccines and well-baby visits without copays or deductibles (see www.healthcare .gov for the list). Plus, many employers offer incentives to participate in a healthy-living program for example, a discount on health premiums if you enroll in a tobacco-cessation program.

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KIPTIP

Save for retirement early (and often)

paying job. But its a lot easier if you participate in your employers 401(k) plan. These workplace retirement programs, offered by the vast majority of large companies, allow you to set aside money before taxes are computed. The IRS acts as if you didnt earn the contributed money, so you pay less income tax. The bottom line: If youre paying 25% of your income in state and federal taxes, a $150 contribution to your 401(k) will reduce your paycheck by just $112.50. Better yet, most employers match worker contributions, typically at a rate of 50 cents on the dollar. That means your $150 contribution gets boosted to $225, thanks to the $75 match. Now, with an out-of-pocket cost of just $112.50less than $30 a weekyouve exceeded the goal of saving $200 a month. Do no more and you should have $1.3 million at retirement. If, however, you boost your savings rate as your salary increases, either you could be very rich at retirement or you could stop saving when your budget gets really tight later in life, such as when youre putting the kids through college.
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IF YOU WANT TO BE RICH WHEN YOURE

old, theres no better way than to start saving when youre young. Unfortunately, thats also when youre likely to think that you can least afford to save. But consider what happens if you start socking away $200 a month in a retirement account from the moment you land your first full-time job at age 22. Within ten years, youll have amassed a nest egg of more than $37,000; in 20 years, youll have more than $122,000. Keep it up and youll have a tidy $1.2 million when you retire at age 67. (The numbers assume you earn an average of 8% annually on your investments, a reasonable assumption for a long-term return on a diversified portfolio of stocks and bonds.) What happens if you dont start saving until you start earning more, perhaps at age 32? Assuming you save the same amount and get the same return, youll have just $494,000 at age 67. In other words, waiting one decade cost you about $700,000. Naturally, the prospect of saving that much can be daunting, particularly if youre in a relatively low-

WHAT IT TAKES TO MAKE A MILLION

How much you need to save each month to accumulate $1 million by age 67, assuming an 8% annual return.
AGE

If youve saved $0: Save $263 per month.

AGE

If youve saved $0: Save $631 per month. Youve saved $50,000. Save $254 per month.
AGE

If youve saved $0: Save $1,636 per month. Youve saved $100,000. Save $780 per month. Youve saved $200,000. Save $0 per month.
AGE ISTOCKPHOTO.COM

If youve saved $0: Save $5,376 per month. Youve saved $200,000. Save $2,917 per month. Youve saved $400,000. Save $459 per month.
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Fight an unfair property assessment

About 30% of U.S. properties are assessed at higher values than their actual worth, according to the National Taxpayers Union. If you suspect that your tax assessment is too high, you can file an appeal. Before you can determine if the assessed value of your home is accurate, you need to know how your local government assesses properties. Commonly, an appraiser will compare a home with similar recently sold properties to settle on a market value. That figure may be multiplied by a set fraction, known as an assessment ratio, to determine the taxable value. Next, get your propertys record card from your local tax assessors office and check for errors, such as incorrect figures for square footage or number of rooms. If you can prove that any of the information is incorrect, you may be able to get a reduction in your assessment on the spot, bypassing the appeal process. You can search Zillow.com to see estimated values and sale prices of similar homes to get an idea of whether your assessment is accurate. Then pull the record cards of those homes at the assessors office or on its site, if it has an online database. The homes should be of about the same age and style, have the same number of bedrooms and bathrooms, and preferably be in your neighborhood. If you can find five or more properties at considerably lower values, you may have a good case.

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Get more for your remodeling dollars

wont break the bank, and theyll make your home more enjoyable and enhance its appeal when you sell. (Costs are national averages, according to www.diyornot.com.)

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THESE FOUR PROJECTS

FIX UP THE FRONT ENTRANCE. Paint it with an accent color and replace an old lockset. Replace your mailbox and house numbers. Finish with a new doormat for a cheery welcome. Cost: $250 to $300 for materials.

PAINT A ROOM.
Lighten, brighten and make the old look new again. Cost to cover 900 square feet with one coat of latex paint: $150 (DIY, including paint and equipment) or $800 (pro, including labor).

UPDATE FLOORING. If a carpet is worn or outdated and a hardwood floor lies beneath, ditch the rug and hire a pro to sand and refinish the floor. Cost: $560 for 300 square feet. In the kitchen or bathroom, replace ugly vinyl flooring with easyto-install, 12-inch square tiles. Cost: $240 for 180 square feet. Or hire a pro to install new sheet vinyl. Cost: $418 for 120 square feet.

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Know how much home you can afford before you shop
Lenders use two crucial benchmarks to figure out how much house you can buy. Do a quick calculation before you house-hunt.

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KIPTIP

MAXIMUM MONTHLY HOUSING EXPENSE

YOUR GROSS INCOME x 28% =
That includes monthly payments for loan principal and interest, private mortgage insurance (if youll make a down payment of less than 20%), property taxes, homeowners insurance, homeowners association dues, and payments for a home-equity loan or line of credit. Prorate any annual costs over 12 months. To play it safe, also budget for 1/12 of 1% of the homes value for monthly upkeep.

MAXIMUM MONTHLY DEBT REPAYMENT

YOUR GROSS INCOME x 36% =
That includes your mortgage, as well as any other payments on home-equity borrowing; installment debt (say, for credit cards, car loans or student loans) with more than ten months of payments remaining; alimony, child support or maintenance payments with more than ten months remaining; and carlease payments. In some areas with high housing costs, lenders may allow debt payments to go as high as 45% of gross income for strong borrowers.

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KIPTIP

Score the cheapest mortgage

good-faith estimate (GFE), which provides guaranteed rates and costs. (You might have to pay about $50 for the lender to pull your credit report.) If the lender offering the best rate has higher fees than other lenders, try to negotiate the fees down (excluding escrowed amounts for taxes and insurance). You may also cut your closing costs by shopping for settlement services (a closing or escrow agent) and title insurance. At Entitle Direct.com, available in 40 states, you can typically save at least onethird of the cost of title insurance.
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GIVE CABINETS A MAKEOVER.

Proper preparationcleaning, sanding, priming and painting with an oil-based or 100% acrylic paintis key to a good-looking, long-lasting result. Cost for one coat of paint on 150 square feet of base plus wallhung wood cabinets: $110 (DIY) or $547 (pro).

Start by calling your current mortgage lender and your bank or credit union. To shop anonymously, try www.mortgage marvel.com, which provides realtime quotes offered by participating lenders who do business in your area. If you dont mind lenders contacting you directly, try www.lendingtree.com, www .quickenloans.com or www.ing direct.com (click on Banking). Ask for the best rate for which you qualify without any discount points (interest you pay upfront to reduce the rate). Each lender with whom you apply must give you a
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Use tax breaks to subsidize college

Set up a 529 savings plan and name your child as the beneficiary. These accounts let your contributions grow tax-free. If you use the money for qualified education expenses, such as tuition, fees, and room and board, the earnings on withdrawals escape taxes as well. You can set up a 529 plan anywhere, but look to your own state first. Two-thirds of the states give residents a tax break for contributions to their state plan; Arizona, Kansas, Maine, Missouri and Pennsylvania give a tax break to residents for contributing to any states plan. If your kid doesnt go to college, you can name another beneficiary or cash out the account, in which case youll owe income tax and a 10% penalty on earnings. Once you start paying for college, take advantage of the American Opportunity Credit, which returns up to $2,500 for each qualifying student. You must have a modified adjusted gross income of $90,000 or less (single filers) or $180,000 or less (married couples). The American Opportunity Credit applies to the first four years of undergraduate education. Beyond that, go with the Lifetime Learning Credit, which lets you claim up to $2,000 in qualified expenses per family each year. This credit disappears at a modified adjusted gross income of $61,000 (single filers) and $122,000 (couples filing jointly).

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Pick the best ways to pay off student debt

sures.) Log in and click on KwikPay to enter your bank-account information. You must agree to the terms and conditions and provide your electronic signature.
Find the right repayment plan. With federal loans, you have six plans to choose from, including the standard plan120 equal payments over ten yearsand several income-based plans, which set the monthly payments according to your ability to pay and forgive any remaining amount after 25 years. (For details, go to www.studentaid.gov and click on Repayment Plans and Calculators.) Ask for help. Apply for deferment or

Choosing the right payment plan is critical.

Consolidate. Refinance your federal

loans through the federal Direct Loan consolidation program (www.loan consolidation.ed.gov). Consolidating gives you a single monthly payment and, because it typically extends the payment period, it lowers your monthly bill. (A longer period means you pay more interest overall, however.) You may be eligible for a special consolidation program, available through June 2012, that has some advantages over the traditional program. See the Direct Loan consolidation Web site for details.
Get a discount. Shave 0.25 percentage

point off your interest rate on federal loans by setting up automatic loan payments. To sign up, first access your loans through www.myedaccount .com. (If youre visiting the site for the first time, youll need to select a password and take other security mea48 BUDGETING/SAVINGS
KIPLINGERS PERSONAL FINANCE 04/2012

forbearance, each of which offers a respite on repayment of federal loans for up to three years. Still have a problem? Call the Federal Student Aid Ombudsman, at 877-557-2575.
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Have a beef with a business? A public conversation about your complaint on Twitter may yield more satisfying results than a phone call to the company. Use these tips to make the most of the exchange.

SEARCH TWITTER to find out whether the

company has a Twitter presence, and direct your tweets to its account, preferably a customer-service account.

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KIPTIP

BE FIRM but not combative. Employ many of

the same tactics youd use in a phone callinclude specific information, such as dates and times, and have a clear goal in mind (a full refund, for example).

Tweet your beef

Use Twitter and other social media to complain and get resultsfast.

DONT SEND sensitive information, such as credit card account numbers, on Twitter. Switch to a phone call. GET IDEAS from other customers. Searching the businesss name on Twitter may turn up phone numbers of helpful representatives or other useful information. THROW YOUR SOCIAL MEDIA
weight around. For example, some businesses check customers Klout scores, which measure online influence (see yours at Klout.com). High scorers can try to get perks say, a free hotel-room upgradejust by asking.

45

KIPTIP

Go online for discounts on what you want

Sign up for daily deals at Google Deals,

NEWSPAPER FLIERS ARE FINE, BUT YOU

can customize your coupons online, on Twitter and in your e-mail in-box. Using online coupon sites can easily slash $10 off each drugstore bill and $20 off clothing purchases, says Coupon Sherpa CEO Luke Knowles.
Check out Scoutmob, which adds a

Groupon and LivingSocial. They offer about 50% off everything from pizza to Pilates classes.
Get coupon codes at CouponCabin, Coupon Sherpa and RetailMeNot. Find the best deals by following those sites on Twitter or signing up for their e-mail alerts. Register for e-mail or Twitter alerts at your favorite stores to receive insider-only promotions.

little twist to daily-deal sites. No payment is necessary until you present the coupon (displayed on your phone as a text, e-mail or on Scoutmobs app) at checkout, so theres no risk that you will buy a coupon and never cash it in.
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COURTESY (CLOCKWISE): VAPIANO INTERNATIONAL, MORTONS THE STEAKHOUSE, CHILIS GRILL AND BAR. STEVE BROWN/GETTY IMAGES

KIPTIP

Spend less on tech by avoiding early-adopter syndrome

plunked down big bucks on a first-generationor next-genproduct only to see a better, cheaper version come down the pipeline. If you rushed out to buy a big-screen TV, your wallet certainly suffered from early-adopter syndrome. Back in 2008, the average

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MANY GADGET-LOVERS HAVE

price of a 32-inch LCD TV was $867; by last year, the price had dropped by $330, according to iSuppli, a market-research firm. The first Kindle, introduced in 2007, cost $400; the latest version sells for as little as $110 without ads, is lighter and has way more memory and battery life. And you can snag a third-generation

iPhone for as little as $50 (down from $600 at its 2007 introduction). Prices dont always fall, but even newer models that cost the same will have enhancements, and the early kinks will be ironed out. For even better deals, look for refurbished tech products, which often come with warranties.

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KIPTIP

Eat out in style for less

Its all in the timing and location (and by location, we also mean where in the restaurant you happen to sit down).

47

BAR BITES: MORTONS THE STEAKHOUSE

OPT FOR THE BAR MENU. The portions are smaller, but so are the prices. For instance, at Mortons the Steakhouse, youll pay $15 for four petite filet mignon sandwiches as opposed to $49 for the New York strip steak off the dinner menu. BUY LUNCH, NOT DINNER. Eat off the same basic menu minus the extra-large portions (a 10-ounce meat entree rather than a 14-ouncer) and fancy side dishes (say, potato chips instead of fingerling potatoes), for about two-thirds the price. CHOOSE FAST-CASUAL. Stand in line to order at upscale chains such as Vapianos (Italian) and La Madeleine (French). Youll get the food and atmosphere of fancier, full-service restaurants while saving on price and tip.

PICK THE PRIX-FIXE. Land a deal on the fixed-price menu even at high-end restaurants. At Manhattans Gotham Bar and Grill, you can get a roasted-beet salad and the Scottish salmon entree for a fixed price of $25. Choose from the a la carte menu and a comparable selectiona green salad and the panseared skate entreeruns $34. FIND THE BEST HAPPY HOUR. Go to www.dailyhappyhour.com to find the happy-hour specials usually offered between 4 P.M. and 7 P.M.at bars near you. Typical deals: beer for a buck, cocktails for $4, and half-price appetizers. LET THE KIDS EAT FOR FREE. Visit www.mykidseatfree.com to find the restaurants near you where the kids score a freebie (usually on a particular night of the week and with the purchase of an adult entree). In Evanston, Ill., that would be Chilis Grill & Bar, on Tuesday nights; in Elkridge, Md., its Mamma Lucias, where the freebies flow all day Sunday.

FREE KIDS MEALS: CHILIS GRILL & BAR

FAST-CASUAL: VAPIANOS

LOCAL DEALS: DAILYHAPPYHOUR.COM

Nook Color
Brand-new Refurbished

Droid Bionic

Apple MacBook Air

*

Western Digital My Passport 1TB Hard Drive

Brand-new Refurbished

$199

$145

$200

Brand-new Refurbished
*with two-year contract

$150

$1,100 $800

Brand-new Refurbished

$172

$152

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KIPTIP

Drive the car that suits your lifestyle

FAMILIES

URBAN COMMUTERS

OUTDOORSY OUTD TDOO OORS OO OORS RSY SY

Kia Sorento
Sticker price: $25,750 (LX V6)
Kias midsize SUV switched from truck to crossover construction last year and now features more agile, carlike handling. A four-cylinder engine graces the lineup and gets 29 miles per gallon on the highway, versus 26 mpg for the V6. Second-row legroom is a roomy 38 inches, and cargo space behind the second row is 37 cubic feetenough to fit the family and all your gear. The third row of seats (optional on four-cylinder models and standard on V6 models) is perfect for little ones, but not unbearable for adults. The Sorento rates a Top Safety Pick by the Insurance Institute for Highway Safety.

Nissan Leaf
Sticker price: $36,050 (SV)
The first mass-market electric vehicle to hit the streets, the Leaf boasts serious amenities in addition to zero tailpipe emissions and a fueling cost of less than $700 a year. A heated steering wheel and heated seats and mirrors are standard features for 2012, as is a 7-inch information display with navigation (to help you find the nearest charging station), Bluetooth, and a USB connection for music. A full charge takes about eight hours on a 220-volt dock and will carry you 73 miles, according to the Environmental Protection Agency. The price tag is steep, but a $7,500 federal tax credit helps.

Subaru S ba O Outback tback

Sticker price: $25,070 (2.5i automatic)
Kiplingers named the Outback Best in Class Wagon for the third year in a row, based on its fuel economy, stellar resale values and bragging rights as an IIHS Top Safety Pick. Subarus Symmetrical All-Wheel Drive comes in three different versions (all standard) on Outback models, depending on the transmission and engine. On the 2.5i automatic, power is distributed to the wheels depending on acceleration, deceleration and available traction. For trailrated accessories such as splash guards and all-weather floor mats, check out the Popular Package ($772).

KIA SORENTO

NISSAN LEAF

SUBARU OUTBACK

RUNNERS-UP:
Hyundai Sonata $21,455 (2.4L GLS) Its elegant as well as
utilitarian, with generous legroom and cargo space, and a thrifty four-cylinder engine.

RUNNERS-UP:
Ford Focus $19,095 (SE hatchback) Redesigned for
2012, it has plenty of legroom, high resale value and gets 36 miles per gallon on the highway.

RUNNERS-UP:
Ford Explorer $34,920 (XLT AWD) Explorer is now a crossover, with carlike handling and better fuel economy, but its still rugged enough for adventure.

Honda Odyssey $29,035 (LX) The bold exterior, improved

driving dynamics and functional interior set it apart from its minivan peers.
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Hyundai Elantra $15,955 (GLS) A nice price and 40 mpg on

the highway make it easy on your budget. It has an ample 15 cubic feet of cargo room.
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Jeep Grand Cherokee $29,820 (Laredo 4WD) This Jeep has

off-road cred, lots of interior space and highway fuel economy of 23 mpg.
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OLDER DRIVERS

TEENS EN NS

Porsche Boxster
Sticker price: $62,750 (Spyder)
Many celebrities have driven Porsches over the years, but few were cooler than 1950s film star James Deanwhose love of Porsches became legendary after his death at the age of 24 while driving a 550 Spyder. Questions of your demise aside, if you desire two seats and the feel of the wind tousling your hair, then the Porsche Boxster is a good choice. It corners and brakes like a dream, and the engine is placed mid car, so theres storage fore and aft. The Spyder has a larger engine and more horsepower. If money is tight and you can sacrifice some speed, consider the base Boxster, for $15,000 less.

Chrysler 300C
Sticker price: $41,145
Chryslers restyled 300C is evocative of the 1957 model, with a wide front grille and fins. But theres more to the C than nostalgia. The doors open wide for easy entry, and the dashboard is clean, with big, easy-to-use controls. Heated seats (front and rear) and a rearview camera are standard, and the pedals and steering wheel adjust at the touch of a button. Add the Safetytec package ($2,420) for adaptive cruise control, which uses radar to maintain a safe distance from the car in front of you on the highway. The package includes forward-collision and blind-spot warning and cross-path detection.

2009 Honda Civic

Sticker price: $16,708 (EX-L sedan)
If youd rather spring for a new car for your teen, consider the Kia Soul or Ford Focus. But if youre looking to spend less, consider a three-year-old Civic. Its 1.8-liter, four-cylinder engine produces 140 horsepower and gets 36 mpg on the highway. The EX-L model has safety features not available on lower trimsstandard stability and traction control plus brake assist (to apply maximum braking force in an emergency). Other standard perks include heated leather seats, USB connectivity and a 60/40 split folding rear seat to expand the cars 12 cubic feet of cargo space.

PORSCHE BOXSTER

CHRYSLER 300C

2009 HONDA CIVIC

RUNNERS-UP:
Chevrolet Corvette $50,500 (base) The 6.2-liter V8 packs 430
horsepower and propels the Vette (which turns 60 next year) from 0 to 60 in 4.2 seconds.

RUNNERS-UP:
Mazda5 $20,140 (Sport) This mini minivan offers
easy access, seating for six and easy-stow seats for when you need more space.

RUNNERS-UP:
2008 Chevy Malibu $11,831 (LT) The Malibu drives well, plus it
comes with a slew of standard safety features and a wallet-friendly price.

Mazda Miata $26,245 (Sport) Inspired by roadsters such

as the MGB, the Miata is stripped to the essentials so you feel connected to the road.
RETIREMENT

Toyota Avalon $33,955 (base) Check out the eight-way

power drivers seat, easy-to-use dash controls and standard backup monitor.
HOME COLLEGE

2009 Scion xB $12,323 (base) The xB has a capacious

22 cubic feet of cargo space and, as a Toyota product, a history of reliability.
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KIPTIP

Land the best deals before you travel

For the best prices, be flexible, and be ready to pounce on special promotions and time-sensitive flash sales. Check the travel search engines (such as Kayak, Orbitz and Travelocity) for package deals on airfare, lodging and car rentals. Or sign up for the Gate1 newsletter, which sends out deals on all-inclusive vacations and tours.

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Airfare. Scout out fares on major travel sites, then plug a few itineraries into Bing Travels handy price predictor, which forecasts whether prices are headed up or down. Next, sign up for e-mail alerts from airfare-alert sites or follow them on Twitter. We like Airfarewatchdog and Farecompare to get the scoop on sales and promotions. (Skip blind booking sites, such as Hotwire and Priceline, which often place you on roundabout routes at inconvenient times.) Hotels. Flexible travelers should follow LivingSocial Escapes and Groupon Getaways for discounted offers at romantic villas and bed-andbreakfasts. Dont forget local tourism sites and guidebooks when looking for lodging. Places that choose not to register with travel search engines can be a great deal and have more local flavor than the chain hotels. Car rentals. Booking through Hotwire or Priceline is a good way to snag a bargain on a rentalthe vehicles in rental fleets dont vary much. Cruises. Look for cruises on Cruise.com, Kayak, Orbitz and Travelocity. If your dates are flexible, book during wave season, from January through March, when you can find deals of 50% to 60% off, says Mark Murphy, CEO of Travalliance.com. Food. A few weeks before takeoff, sign up for Groupon, LivingSocial and Scoutmob in your destination city and pay special attention to restaurant coupons. Check online reviews on Yelp.com or Zagat.com.

HOLLYWOOD, CAL.

COURTESY (CLOCKWISE FROM TOP): HOMEAWAY.COM, ROOMORAMA.COM, VRBO.COM, HAVEN IN PARIS.

PARIS
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Stay in a home away from home

Vacation rentals arent just for summer beach getaways.
as the classic lodging for families or large groups on beach vacations. But they can also suit singles and couples, not to mention families, looking for more space away from the tourist meccas in U.S. cities or abroad. Besides offering more square feet per dollar, rentals usually have a kitchen to help keep down food costs and a laundry room so you can pack lighter. The financials work differently for vacation rentals than for hotels. Youll likely pay a cleaning fee ($100 to $250) and may have to put down a security deposit or nonrefundable reservation deposit. Booking for a week can land you a reduced rate. Be sure to book through a trustworthy site, such as VRBO.com or HomeAway.com. These sites include thousands of listings, both domestic and international, with the owners contact information, photos, reviews and pricing details. We also found a couple of smaller sites: Haveninparis.com focuses on Paris and Provence as well as London and Tuscany. Roomorama.com lists properties worldwide.

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VACATION RENTAL HOMES ARE PIGEONHOLED

HOLLYWOOD. On HomeAway.com, a twobedroom Craftsman-style house, within walking distance of the Walk of Fame and Sunset Strip, was renting for $250 per night. PARIS. In the trendy Marais neighborhood, an
SORRENTO, ITALY

airy apartment runs from $300 to $375 per night (depending on the season). The apartment, listed on Haveninparis.com, sleeps four and offers cable and free calls to North America.

SOUTHERN ITALY. A three-bedroom villa near Sorrento, Italy, starts at about $190 nightly on Roomorama.com (the price can triple during summer season), with a one-week minimum stay. It has an infinity pool and can sleep up to eight people. EDINBURGH. A two-bedroom luxury apartment listed on VRBO.com recently rented for between $165 and $340 per night (more during the August Edinburgh International Festival). Amenities include two fireplaces, a bathroom with heated floors and views of Edinburghs castle.
HOME COLLEGE SPENDING

EDINBURGH, SCOTLAND
RETIREMENT

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