Savings guru Elisabeth Leamy offers tips on saving big

So you're brown-bagging it, making your own coffee and clipping coupons. Sound familiar? It's what a lot of us are doing these days in order to save money. It's also what Elisabeth Leamy used to do before she realized it wasn't really getting her family's finances very far. Instead, Leamy attacked her big-ticket expenses and, by doing so, saved her family a whopping $160,000 over the past ten years.

In her new book, Save Big, Leamy doles out some saving advice that may not seem so conventional. For instance, she says to go ahead and keep that daily latte (though we still say skip it and embrace the Mr. Coffee machine instead.) Leamy believes that the only way consumers can truly save cash is to tackle larger chunks of wasteful spending, particularly when it comes to your house, your car and other key areas.

But can Leamy's ways help us save tens of thousands of dollar, too? WalletPop got her advice firsthand. Here's what she had to say about five key spending areas.

Most of us consider housing to be a fixed cost, but Leamy says there's a treasure trove of savings opportunities available when buying and selling a home.

When she and her husband were buying their house, says Leamy, "I scrutinized the closing costs and found $4,700 in junk fees."

What counts as a "junk fee"? After all, there are legitimate fees associated with closing on a property, and some of them can't be negotiated. Look at each item carefully, Leamy advises. Items that seem vague ("administration fees," for instance) can be a red flag. Other line items, such as courier fees, document preparation fees and funding fees, can be argued and successfully negotiated.

How you sell your home is another opportunity to save, she says. Leamy saved a cool $25,000 when she sold her condo prior to moving in with her husband by not using a realtor. While she says she doesn't recommend doing this in a turbulent market like the one we're in now, it's something to keep in mind for the future when the market is calmer.

Leamy's number-one rule is to never buy a new car. "Cars depreciate 45 percent in the first three years," she says. If you can find a low-mileage vehicle that is just over the three-year mark, you can save a bundle. Leamy estimates she saved $5,000 by buying a three-year-old Honda Pilot the last time she went car shopping.

She also suggests going through a private seller; you'll most likely get a better deal than you would at a dealership. If you're wary of buying a vehicle from an individual (doing so usually means you forgo any service warranties and don't have any recourse should something be wrong with the car), Leamy says you can often bargain with auto dealers to have a warranty plan included --for a nominal sum -- on a used car that doesn't already offer one.

Finally, if your car's in decent shape, don't trade it in just because you can. If you're currently making car payments, multiply that monthly amount by 12 and then think about how nice it would feel to save that amount each year by not buying another car.

Few people grasp how a much a low credit score can really cost you. According to FICO, a person with a credit score of 550 will end up with an interest rate on their mortgage that is three percentage points higher than someone who has a score of 720.

Leamy puts this in more concrete terms by using a conventional 30-year mortgage as an example. "If you raise your score from 620 to 720, you could save $3,120 per year on a $300,000 mortgage - that's $93,600 over the life of the loan," she says. "Over the past decade, I calculate that I've saved $116,000 on two different mortgages because I was able to get better mortgage rates with a higher credit score."

If you're paying off credit card debt, Leamy says paying every two weeks instead of once a month can help you pay down your debt faster. First, that mid-month payment helps reduce your balance (and the interest you pay on it) more than if you'd waited until the end of the month. Second, if you stick to the every-two-week schedule like clockwork, you'll have made the equivalent of one extra payment a year, which goes even further towards chipping away at your debt.

Since the recession began, women's magazines have been peppered with articles about "shopping your closet," meaning you should try wearing what you already own instead of buying new clothes. Leamy says Americans need to do the same with their pantries. With the exception of items that quickly spoil like milk, she advises that consumers skip the grocery shopping trip every once in a while and raid their pantry.

"Use up your leftovers, and use frozen and canned food you already have," Leamy says. "It's a fun challenge."

Leamy estimates she's saved25 percent on groceries annually simply by shopping her pantry once a month instead of making her weekly food-shopping trip. Given that the average American family of four spends $10,692 on groceries annually, that adds up to a nice chunk of change.

For those who are willing to invest a little time in order to save even more, the web offers a bevy of resources. Leamy says she knows people who've cut 50 to 80 percent off their grocery bills by rigorously using coupons every time they shop. Sites like let you enter the products you're looking for, and the site will tell you if a coupon is hiding in any of the paper circulars that come in your mail or in the newspaper. Leamy also recommends for tips on maximizing your coupon buck.

Leamy says raising the deductible on your health insurance or increasing the amount you pay for doctor visits and prescriptions can also pay off, particularly for young, healthy Americans. "My family saves $1,100 a year on health insurance," she says.

Leamy opted for a plan through her employer that requires a higher payment each time they go to a doctor but costs a bundle less up front. "You don't want to be spending way more in premiums than you pay in healthcare costs," she advises.

Leamy also says people should stop rejecting generic medicines -- the difference in cost between generic and name-brand can be significant. For an example, Leamy cites the popular antidepressant Prozac. A year's supply of the name brand costs $8,290, whereas the same amount of its generic twin costs just $1,940, a savings of $6,350.

All told, not all of Leamy's tips will work for everybody, but it's likely that some of them probably apply to you. More important, though, is her mindset. Countless experts preach at us to watch our pennies, but watching those hundred-dollar bills could add up to significant savings a lot faster.
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