Are You Spending Unwisely?

Tightening the belt in tough times can hurt. Ease the pain by spending smarter to save. Avoiding out-of-network ATMs, carrying traveler's checks, and paying off credit card balances in full each month can go a long way.

Tough times call for tighter budgets but belt tightening can often hurt. According to some financial gurus, however, the average consumer can save significant dollars pain-free just by spending smarter. Cutting out some money-wasting habits can help make your budget look a lot healthier.

Paying to use another bank’s ATMs may not seem costly, but those $2 and $3 fees add up. Use your own bank’s ATMs or switch to a bank that has a bigger ATM network. If you’re on the road a lot, consider carrying travelers checks instead of using ATMs. They’re safe, they’re accepted just about everywhere, and many credit union members can get them free. Paying a front-end load when you buy mutual fund shares is another waste of your hard-earned cash, say many investment advisors. Load funds that charge 5% or more in sales fees not only pluck money from your wallet, they put you in an investment hole where you need to gain back the amount of the load before you even break even.

Perhaps the toughest money-saving tactic for most consumers is to pay off credit card debt and get into the habit of paying off the entire balance every month. As hard as it may be, there can be a hefty payoff once it’s done. Depending on the interest rate your card issuer charges, you can save anywhere from $120 to $250 for every $1,000 you take off your balance. That’s like getting a guaranteed 12% to 25% return on your money — and it’s tax-free.

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