Retirement

Save money every day: Ten painless tricks

By Allan Roth

March 8, 2012 / 2:42 PM EST / CBS News

Financial advisor Allan Roth is not ashamed to admit that he enjoys immediate gratification as much as the next person. He likes his cable and internet, has a 70 inch HDTV, and stays in nice hotels. He has good insurance and uses his credit card whenever he can.

That said, he also hates paying full price: "Never pay retail" is his motto. Here are ten simple ways to be materialistic while still improving your finances.

1. Say goodbye and hello to cable

Allan had the Comcast triple play (cable, internet, and telephone) for many years. He bought it at the $100 teaser rate that lasted for a year. At the end of that year he began what has become an annual tradition, which is calling the cable company and saying he was switching if they don't renew his teaser rate. Just as predictable as the seasons, he says they will tell him how much they value him as a customer and extend it.

The same strategy can work on other services - from cell phones to companies that fertilize your lawn. These service providers know it costs much more to get a new customer, so they are willing to lower rates to keep you.

Payoff: 20 minutes a year to save $360 annually.

2. Pick the right credit card

Allan hates credit cards. Though he has them, he uses them as charge cards, never paying any interest. He searches for the cards with the highest rewards. He once picked credit cards for the airline frequent flyer points, but turned a couple years ago to cash back cards. He knew he had made the right decision when a recent free flight to New York cost him over $100 in fees. Airline rewards aren't worth much anymore.

A word of caution, however, is that just having a credit card makes you spend more. With one click on any web site, one can put in their credit card information and buy items one ordinarily might think about twice. Thus, the easier it is to buy, the more you will spend.

Payoff: $720 annually of cash back with no effort.

3. Play the "travel game"

couple sitting on deck chairs — iStockphoto

Some people like chess while others like Sudoku or crossword puzzles. Allan likes playing the game of travel, which requires strategy and collaboration to get hotels at about 40 percent of retail price. He starts with Priceline.com and Hotwire.com, and then goes to the travel boards of biddingforrtavel.com and betterbidding.com, where people will post the names and bidding amounts of hotels they've won. If you don't see what you are looking for, you can post a question which always seems to get answered.

Allan says in just about a half hour he can often save hundreds of dollars per trip.

Payoff: 25 nights at a hotel averaging $60 a night savings, or $1,500 annually for 10 hours work.

4. Coupons are cool

In today's tough economy, coupons have become cool. Allan doesn't clip coupons from the paper - instead, he uses a more immediate internet strategy. For example, if he's ordering Domino's Pizza, he'lll Google "Domino's coupon code" and, in 15 seconds, he'll find a discount code.

An extension of this strategy is, whenever he buys something off the internet where he see the "promo code" on the checkout, he'll Google the site's name with the words "promo code." More often than not, someone has posted a promo code.

Payoff: "Guestimated" $1,000 a year for 5 hours of his time.

5. Keep the car

Freeway Traffic Might Be Making Your Kid Sick — iStockphoto.com

Allan is the proud owner of a nine year old Pontiac that he bought in part with GM credit card bonus points. He says it not only does gets him from point A to B just as quickly as the new Lexus, he also get other benefits, such as taking the tight parking spot, lower risk of theft, and no attitude when the police pull him over for not making that full stop.

Payoff: Annual savings from depreciation, taxes, insurance, and gasoline of $5,000 per car.

6. Shop online

Men outspend women online (on things that aren't real) — iStockphoto

You can blame Allan for Borders Books being buried. He says he'd pull into his local Borders and browse for books. Then, he'd get online and buy it from Amazon for at least 40 percent off, with no sales tax to boot. Now with devices like the Kindle, he can get immediate gratification.

The internet shifts power from the sellers to us consumers. With the click of a mouse, we can comparison shop across the world.

Payoff: "Guestimated" savings of $800 annually (He says he saved almost this amount on my big screen last month).

7. Buy knockoffs

Moving Tips: 5 things to do in your new home — istockphoto.com

Allan is not talking about buying a fake Rolex: He's referring to buying supplies from "non-OEM" suppliers. For example, in today's world, HP will sell a printer at a loss because they are counting on you to buy their ink for the next few years. The printers now even come with starter cartridges only half full.

Allan notes he can get on eBay and find a compatible cartridge for as little as a quarter of the price, including shipping. It comes from Asia, and may even be produced by the same company producing the OEM version. Now the printer documentation advises you that using non-OEM ink will render the warranty void, and cause your printer to self-destruct, but he says he hasn't had issues - just savings.

Payoff: Two toners a month, saving $60 per cartridge = $1,440 annually.

8. Get an insurance checkup

Allan admits gathering up all of your insurance documentation may not be much fun, but it can be a very profitable time investment. He had been with State Farm for a couple of decades, and saw his rates go up without any claims. Until finally, recently, he met with an independent agent. It was like a Geico commercial - though it took more than 15 minutes, it did save Allan hundreds of dollars a year.

One word of advice: You need to make sure any insurance company you have is ranked high in both customer satisfaction and financial stability.

Payoff: Cut $600 annually from my property and casualty insurance.

9. Complain well

angry boss, manager, woman, screaming, blowhorn, stock, office, working, red phone, megaphone, yelling, 4x3 — iStockphoto

Allan works hard for his money, so when he buys something, he expect to get what's promised. If he doesn't, this squeaky wheel complains loudly and smartly. When he calls the 800 number, he always asks for and takes down the customer service representative's name or employee number. That way, he knows he'll be far less likely to be "accidentally dropped." Always prepared for a long hold, I use a headset when I call and multitask.

To speak with a person he knows will have more power to solve the problem, he immediately, but politely, asks for a supervisor.

Payoff: Varies but, when he toured a timeshare for a promised Carnival cruise, he turned the worthless voucher into getting reimbursed for the actual cruise.

10. Keep cash working hard

Man holding a wallet with cash in it. — iStockphoto

Banks and credit unions are often paying 0.00 percent for the cash you keep with them. In fact, many charge now. Paying nothing for your cash is just another fee from your financial institution. Allan minimizes the cash in his checking account, and finds better places to stash his cash.

His favorite solution for cash he may need soon is in an unlikely place - five-year CDs at Ally Bank. They are currently paying 1.74 percent APY and have a 60 day early withdrawal penalty, which amounts to only 0.29%. If he closes the CD after 61 days, he's earned more than his money market account yielding 0.03 percent.

Even with $10,000 in cash, this is a way to spend 20 minutes and earn $174 a year more with your money. That's not a bad hourly wage.

Payoff: Allan has a $100K emergency cash reserve earning $2,740 annually at Ally Bank rather than a whole lot of nothing at Wells Fargo, his local bank (the rate was 2.74% when he opened the CDs).

Allan Roth

Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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