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

222 Pages·2008·1.112 MB·English

by  Karp, Gregory

LIVING RICH
by
SPENDING
SMART
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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
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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
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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.
Pearson Education Australia PTY, Limited.
Pearson Education Singapore, Pte. 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
For Dad and Grandpop,
role models and noble men
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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