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Your real cost of living
http://finance.yahoo.com/banking-budgeting/article/104073/Your-Real-Cost-of-Living
Your Real Cost of Living
... consumer prices ...
Probably ... your personal consumer price index diverges from the national average.
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Like real estate, most shopping is local and prices vary by region.
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Nor can you possibly be average, statistically. That's because the official consumer price index reflects an array of households simultaneously.
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Furthermore, the feds use extensive surveys to weight the importance of items in their CPI basket of consumer goods. Spend more than average on items whose prices are rising faster than average, and your personal inflation rate could soar.
For example, we'll make an educated guess that your personal inflation rate is well above average if you have a son or daughter in college. For one thing, the CPI assumes that only about 3% of spending goes to education. For another, college-cost inflation has been running around 5% to 8% a year, more than double the average inflation rate in recent years.
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Critics say bureaucrats understate the CPI by assuming shoppers will sub cheaper items for pricier ones, and by adjusting price hikes downward to reflect quality improvements in what we buy.
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says Bureau of Labor Statistics economist Patrick Jackman.
The news isn't all bad. Apparel prices are falling ...
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More From Kiplinger's Personal Finance:
• Track the Cost of Living in Your Metro Area
• Calculate Your Cost of Living
• Best Cities for Every Stage of Your Life
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8 easy ways to save cash
http://finance.yahoo.com/banking-budgeting/article/104449/Eight-Sure-Fire-Ways-to-Sock-Away-$100
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3. Compare Prices
The Internet has leveled the playing field when shopping for such things as auto insurance and homeowners insurance.
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You can take this a step further depending on how dedicated you want to be by price comparing all your major purchases through sites such as PriceGrabber or Shopping.com and save hundreds more.
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5. Start Haggling
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6. Get a Lower Credit Card Rate
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Many people don't realize that all it takes to lower your credit card interest rate in many cases is a simple phone call asking. A 2002 study found that over half the people who had good credit and called their credit card company to get a better interest rate were able to do so with the average person reducing the rate by one-third.
If you have a $5000 balance at 21% interest and were able to knock that down to 14%, you would save $350 a year. The 15-minute call will also knock years off the time it would take to pay the debt off.
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eBay or Craigslist...
8. Refinance Your Home
With interest rates at the lowest level in years, it's time to see if refinancing your home loan (or any outstanding loan you have) is worthwhile.
Knocking off a point can save thousands of dollars over the lifetime of the loan.
Even if you have a nonconforming loan -- or jumbo loan -- which made it difficult to refinance in the past, this soon may no longer be the case.
As part of the economic stimulus package that President Bush says he will sign into law this week, conforming loans that are backed by the Federal Housing Administration will increase to a $729,750 limit from $417,000.
Since nonconforming loans usually carry a higher interest rate, this will allow some with jumbo loans to refinance into a conforming loan.
While the difference in interest rates vary, a conforming loan can be a full percentage point less expensive since it is backed by the government.
A jumbo 30-year fixed loan that was 6.75% before the law, for example, would have a payment of $3,892 a month. Once enacted, the buyer would be able to obtain the same loan of $600,000 at an interest rate of 5.75%.
The monthly payment would be $3,502 which would save the borrower $390 a month, or $4,680 a year.
While refinancing is a bit more complicated than the other saving methods and will take a bit more time to complete all the necessary work, the amount saved per year is huge and thus well worth the effort.
Note: To make the savings last, you need to set the money aside that you save after completing the above tasks.
If you merely congratulate yourself for saving money, but don't separate the money into another account, it will likely be spent on other things and the savings will never materialize.
TheStreet.Com
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