Penny-Pinching Power - Page 2 of 2

Penny-Pinching Power

spend $500 or more.

Although she is a savvy consumer, Lewis is still a novice at investing. She has used her penny-pinching habits to reduce her debt and is working on building an emergency fund. In addition to her car note and mortgage payments, she has $3,000 in credit card debt. She refinanced her home in the summer of 2002, lowering her mortgage payment by $160, which she uses to pay down debt. When she pays off her car note in April 2004, she plans to contribute the $256 per month to her emergency fund. Her goal is to save $10,000 in three years.

Right now, Lewis contributes 6% of her salary to her 401(k) plan at work. Her company matches up to 6% and allows her to choose from a selection of mutual funds.

“Finding all of these deals can be very time consuming,” warns Lewis, “but it’s worth every penny.” In order to stay on top of her finances, Lewis has developed these habits, which she recommends to anyone wishing to save a few dollars:

Search online for deals. Lewis says she starts most of her bargain hunting at a price comparison site,, the partner search engine to Google. “The Web is a big help. I get e-mail notifications on sample sales and warehouse sales. It can be a lot of spam to go through sometimes, but I do find a lot of bargains by subscribing for discount offers online,” says Lewis.

Stay mindful of what you are spending. Lewis says she bargain hunts even after she has met her financial goals because she never knows what may pop up. “An extra dollar here and there that I save can get absorbed in the cost of living,” says Lewis. “For instance, my commuter ticket just went up, and I’m expecting an increase in my energy bill, so my constant saving helps to offset those unexpected costs.”

Maximize your investment options. Lewis was sure to capitalize on her employer’s match at work, which effectively doubles what she saves for retirement. She also established her emergency fund at ING Direct (800-ING-DIRECT), an online savings account that pays her 2.3% interest, which is much better than most banks.