This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Healthcare – $2,853

This is one of those “averages” that somewhat hides the real truth of the situation. For some, there is almost no expense at all when it comes to health care. They’re covered fully by a strong health insurance policy and rarely (if ever) have doctor visits.

For others – those with poor health or those without insurance – the cost of healthcare in a year can be much, much higher.

Thus, there are two big ways to keep your health care budget under control. First, if you’re in the first group, do what you can to avoid slipping into the second group. If you’re in the second group, find ways to reduce the multitude of expenses.

Ask your doctor about independent and preventive steps. Whenever you have a doctor’s appointment about a particular ailment, always ask the doctor about independent steps you can take that don’t require a doctor’s constant monitoring. Are there exercises you can do? Are there natural remedies you can take to ease the situation? If there are simple independent steps you can take to reduce the number of doctor visits you have, then you’re saving money on the deductibles.

On the other hand, get regular checkups. Many people who are in great health never go to the doctor – and thus they often don’t take care of, or aren’t even aware of, serious conditions until they’ve progressed to the point that expensive treatments are the only option. Regular checkups are like regular maintenance on your car – you pay a little now to avoid paying a lot later on.

If you’re healthy, switch to a plan with a higher deductible. If you rarely visit the doctor, you’ll find that by switching to a less expensive plan with a higher deductible, you’ll save money annually. If this is a job benefit, you can re-route the savings into other benefits more useful to you.

Eat a healthier diet. Focus on making fresh fruits and vegetables a central part of the diet you consume. If you cook at home, this can actually be done quite easily.

Exercise. Be physically active at least thirty minutes a day, even if it just means walking around for thirty minutes. Our bodies are dsigned to utilize regular motion and exercise to maintain health.

Practice self-examination. Self-examination of your body can go a long way towards detecting many medical problems before they become too serious – and thus too expensive. If you don’t know how to do such things, ask your doctor, as this is clearly an indepnendent, preventive step.

Be aware of the health risks of lifestyle choices. If you choose to smoke, drink regularly, consume drugs, or eat excessive amounts of processed foods, you will have increased risk of many different serious ailments. Make lifestyle choices that promote good health, not only for your personal standard of living, but for the sake of your budget.

If at all possible, choose outpatient or same-day surgery. Few things can hit your finances like a long hospital visit when you’re expected to pay some percentage of the bill. If you can, avoid this by choosing outpatient care. Then, learn how to manage your own recovery at home.

Save the emergency room for genuine emergencies. If you can treat it at home, treat it at home. If you’re not sure, call a nurse hotline – a service offered by many hospitals to help filter the legitimate emergency room visits. If you can wait until a regular appointment with your doctor, you can save a tremendous amount of money.

Study your medical bills. When you receive a medical bill, review it carefully and make sure there are no errors or unclear items on the bill. If something doesn’t add up, request an explanation, and if it still doesn’t hold up, challenge it.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

What is an appropriate level and kind of gift one should buy for a (great) real estate agent upon completion of the home buying process?
- Pankaj

It’s usually customary for the real estate agent to get you a small gift upon closing your house. This is because the agent usually collects a very nice commission for the work they’ve done in closing your home. Thus, if it were me, I wouldn’t worry about a gift beyond a thank you and a handshake.

However, if you feel your realtor truly has gone far above and beyond the call of duty for you, I would suggest moving into your home, then baking some homemade goods in your new home and delivering them to the agent. No one, after all, can turn down any homemade cookies.

Just to be on the safe side, bring up food allergies in a conversation with your realtor before you do this. You can work it into the conversation in whatever way you feel most comfortable.

How do you manage your “To do”/Task list? Remember the Milk? I’m trying to decide what is the best way to manage my daily/weekly/monthly tasks… I had been using Google Docs but want to move onto Google Calendar so that I can put dates to all my tasks. Anything else I should consider instead?
- Dave

You may find Remember the Milk for Google Calendar to be of use – I certainly do.

I mostly just use Remember the Milk for things to be done that don’t have a specific time and date attached to the item. If it does have such a time and date, I put it in my calendar instead.

I usually do keep separate lists for my daily, weekly, and monthly tasks so that I can see the individual lists or an overall view of all of the things that need to be done (and when they should be done by) if I so choose.

You’re right about Craigslist being a sort of virtual crapshoot. But if you’re willing to invest a bit of time (setting up RSS feeds can cut down on that, as does good searching), you can get some good stuff at really good prices. (A lot better than wasting time at Salvation Army and Goodwill trolling, that’s for sure!)
- stella

I agree with you that this is the optimal way to use Craigslist, but I still choose not to use it in this way. There are two big reasons for this.

First, it’s a time investment to browse those items each day. The time I spend digging through items is time I could be spent not searching for more stuff to possess.

Second, unless I’m looking for something specific, browsing Craigslist entries is nothing more than a way for me to see things that I didn’t realize I wanted or needed and possibly convince myself to spend money on them. Again, that’s not a positive addition to my life.

Sure, I look at Craigslist if I’m hunting for something. I’ll set up a filtered search and have it show me just those results during the time when I’m looking for a specific item. Beyond that, though, I simply don’t look for “deals” there.

How are the piano lessons going?
- John

This is in reference to my third 2010 resolution.

I actually have my first one scheduled for this Thursday. I have a few books of simple sheet music already, along with some other material for reading. I think most of the first lessons will revolve around teaching me very simple songs that will eventually grow toward something more – which is something I’m completely fine with.

I’m a big believer in deliberate practice – and my teacher is aware of this. I told her flat-out that I don’t mind “boring and repetitive” practice in the least as long as I’m aware that it is leading towards something. She told me that was a refreshing attitude.

I’m looking forward to it very much.

On a similar train of thought…

I’ve just started cello lessons and have rented the instrument for $37/month for two months. The music store I rent from will credit me half of the total rental money paid toward a purchase should I decide to do so in the future. The purchase price for a starter cello from them is in the neighborhood of $650.

If I love it (so far, so good!) and continue to play, at what point in time would it be better to purchase a cello, and from which source?
- heather

My immediate question would be how much resale value a cello would have if you purchased it. If you would have an easy route to re-sell the cello for some significant percentage of what you paid for it, I would buy it sooner rather than later, because money spent on rental is just money lost.

If you would have a hard time selling the cello, I would next look at my own history of sticking with things. Do you have a previous tendency to stick with passions for a long period, or do they burn brightly and flame out? Some people are naturally into variety – they focus on an activity for a while, then want to learn something new. Others tend to bear down on one or two things and seek to master them.

If your personal history shows you in the first group, hold off on buying. If your personal history shows you in the second group, I’d go ahead and pick one up.

I’ve been a reader of The Simple Dollar for years and I have an interesting question for you. I’m about to graduate from [a college] with a degree in computer science. I’ve played baseball every year in college and my coaches and I are pretty sure I’m going to get drafted in June.

My question is this: should I do it? The odds are very much against me making it in professional baseball, but I am pretty sure I can get a job in computer science right after graduation that pays much better than I’ll ever make in the minors. The only way that baseball is the right way for me to go financially is if I make the majors.
- [Ryan]

I edited this question a bit because I was concerned about this person’s privacy, since my research actually indicates that he has at least some professional potential at baseball, and I don’t want to interfere with that and give him the type of publicity that might interfere with his draft status, since his name will probably be Googled by professional teams.

For me, the real issue here would be whether or not Ryan would enjoy playing hundreds of games of baseball a year for the next several years (at least). If that sounds like an extremely enjoyable prospect, then you should go for it, as this is a once in a lifetime opportunity. If that sounds like complete drudgery, just be glad that baseball gave you the scholarship you needed to earn your degree and move into that computer science career.

Unless you are blessed with an inordinate amount of talent, you won’t get to the top level without the kind of burning passion that gets you onto that minor league bus a hundred times a year for several years. Do you have that kind of passion for baseball?

I followed your advice and got an emergency fund with three months’ worth of living expenses in it. I also started saving for a replacement for my current car. Last week, my car’s transmission failed. I took the car in to get it fixed (which cost me $2,500) and the repairman pretty much demanded that I get my brakes fixed, so I shopped around for that and dropped another $700. Now my emergency fund is running dry. Should I just move my car savings over? What should I do?
- Kevin

I would leave my new car savings alone for now. Instead, focus your future savings on rebuilding your emergency fund, then switch back to saving for your next car.

I would treat your car savings as a resource only to be tapped if your entire emergency fund is depleted. If you turn it over to your emergency fund with a self-imposed promise to “start over,” it’s very easy to talk yourself out of such a brave, audacious goal.

Leave your savings where it’s at right now. It will inspire you to keep saving once your emergency fund is back on track.

How do you think people will handle their money differently in ten years?
- Fred

I think the slow death of the paper check will continue. Before too long, all payments will be handled either with a debit or credit card or with cash. Paper checks require too many resources to deal with, particularly when cards are more convenient for both buyer and seller – and cash has the advantage of anonymity, so it’ll stick around.

I think financial management tools are going to get substantially better, but they’re not going to be more widely adopted than they are now. There are a lot of small innovators pushing the 800 pound gorilla (Intuit) forward – and this will keep happening.

I also think that the current frugality trend won’t last. When the economy recovers, people will start spending more again. I would not be surprised at all to see the savings rate go back to zero in five years or so.

What classes did you take in college actually give you value in your life today? Most of my classes seem either to be strongly tied to my field of study or a complete waste of time.
- Jim

My public speaking class had the potential to be valuable if I had taken it more seriously. Instead of really utilizing it to work on my public speaking – a skill I’ve used countless times since college, even though I didn’t expect to – I goofed off and treated it as an easy grade.

My technical writing class has popped up time and time again in various avenues of life. This, of course, could also be connected to the fact that I chose to become a writer.

I also found one class on information management to be really useful. I’m not sure this is a widely offered class, but it mostly focused on how to organize one’s personal information – making a good schedule, filing personal papers so they’re easy to find, organizing data, and so on.

In short, the classes that were useful were the ones that taught transferable skills. When I took them seriously, they were golden.

What’s your Super Bowl prediction? We want it now, in print, so we can see how back your picking skills are (just kidding).
- Eddie

Arizona Cardinals 42, San Diego Chargers 35.

I watched most of the Cardinals game on Sunday on low volume while getting my daughter to take a nap. My conclusion? Kurt Warner is some sort of cyborg. He threw more touchdowns than incomplete passes against an extremely good pass defense and without his best receiver (Boldin). I don’t even know what to say about that.

I don’t believe the Cardinals will lose to anyone if Warner keeps playing like this.

Of course, given my success with such picks, I’d expect both teams to lose next week. After all, I am a Chicago Cubs fan.

Got any questions? Ask them in the comments and I’ll try to include them in a future reader mailbag.

Every other Sunday, The Simple Dollar reviews a personal finance book.

The Elements of Investing by Burton G. Malkiel and Charles D. Ellis is a nice small volume, reminiscent in size and length to one of the Little Book investment volumes. I chose to pick this up because I highly respect Malkiel’s books A Random Walk Down Wall Street and The Random Walk Guide to Investing (click on the titles for my reviews) and I was looking for a succinct collection of the main points in those books (which are a little dense – and perhaps a little long – for the typical reader).

That’s pretty much exactly what The Elements of Investing delivers.

Malkiel and Ellis break down the … well, elements of investing down to five key principles, which make up the five main sections of the book. Given that this book isn’t excessively long, each of these sections gets straight to the point, making it clear what you need to do.

This book doesn’t offer (much) specific investment advice. Instead, what the book focuses on is the foundational elements you need to have in place in order to make good specific investment choices, along with a few very general principles on how to invest. If you’re looking for a list of hot stocks or other specific investment choices, this isn’t the place for you.

Let’s dig into the five key principles that make up the book.

I. Save
The book opens with what I consider to be the key of successful investing: saving your money, living without personal debt, and spending less than you earn. If you’re not following those principles, you’re giving money you could be potentially investing to financial institutions in the form of finance charges, unnecessary insurance, and so forth.

Before you begin to invest (outside of matched retirement savings and the like), get your personal finances in order. Eliminate all of your high-interest debt, as investing in such debt payments has a very high rate of return. Get into the practice of spending less in your personal life than you’re bringing in, because the less you spend, the more you have to invest. Live frugally. Build up a nice cash emergency fund to handle the curveballs life will throw at you so that such curveballs don’t disrupt your investing plans. Set goals for yourself and know why you’re investing.

II. Index
Malkiel and Ellis recommend investing your money in index funds rather than in individual investments (like individual stocks or individual commodities) or in mutual funds. First, investing in individual investments requires a substantial amount of research and access to information in order to compete – something not available to the average investor. Second, investing in mutual funds means paying substantial fees – and even after you do that, you’re still merely betting that, after you pay the fees, the fund manager can still beat the market, something no fund manager (other than arguably Peter Lynch, who retired about two decades ago) has ever done with any consistency.

Index funds simply buy a little sliver of everything and rides the market as a whole, doing it for an extremely low cost. You won’t beat the market – but you’ll match it without worry and extensive research. For the average investor who doesn’t have unlimited time and resources, that’s a pretty strong deal.

III. Diversify
Putting all of your eggs in one basket might get you rich, but it might also cause you to lose everything. For example, if you put everything into tech stocks in 1998, you were riding very high in 2000 – but in 2002, you were in an apocalyptic situation.

Instead of falling into this trap, diversify. Spread your money across a lot of different investments – domestic stocks, international stocks, bonds, cash, real estate, and even a bit of commodities, too. Buy index funds for all of these markets and spread your money across them. This way, you’re protected if any specific market collapses, but you also get some benefit if any particular market goes crazy.

IV. Avoid Blunders
Don’t get overconfident – no one can predict the future. Don’t try to time markets because, again, no one can predict the future. Be careful about fees and don’t invest in things that charge you a lot simply to invest in them.

To put it simply, be careful. Take your time. Your goal is to succeed in the long run – it’s not some sort of mad dash to the finish line. Besides, those who sprint often fall flat on their face when they’re in the investing game.

V. Keep it Simple
If things are getting too complicated and confusing and you’re finding that you’re having a hard time keeping track of your investments and properly following them, simplify. Move into fewer investments while still keeping as much diversity as possible. Instead of having your fingers in twenty different stock investments, invest in a much smaller number of index funds, for example.

Simplicity enables you to actually keep track of and understand your investments in a reasonable period of time. Without this, you’re essentially leaving your investments up to serendipity – which is never a good decision.

Is The Elements of Investing Worth Reading?
The Elements of Investing is an excellent first book for people to read once they begin to think about investing. Instead of drowning the reader in specific investment advice, it focuses on foundation materials. Why are you investing? How do you get ready to take advantage of the financial rewards of investing? How do you begin to invest if you barely know how to read a prospectus? How can you avoid some of the most obvious blunders that beginners have?

This isn’t a be-all end-all guide to investing, nor does it claim to be. If you want a deep, technically rich guide to investing, read The Bogleheads Guide to Investing. If you’re just starting to think about investing, read this one instead – it’s a truly great beginner’s book written by a author with a great reputation.

This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Transportation – other expenses and transportation – $3,130

This unlclearly-defined category includes vehicle finance charges, maintenance and repairs, vehicle insurance, public transportation, vehicle rental, licenses, and so on. In other words, besides buying a car and putting fuel in it, every automobile expense goes into this category.

With such a varied caetgory that speaks to the wide variety of lifestyles people have, there are many ways to save money within this category that really work well for some people – and don’t work at all for others. Thus, use these tips with that in mind – look for the ones that work for how you transport yourself.

Learn how to do basic auto maintenance yourself. Changing your oil and checking your fluid levels isn’t that hard. Your car’s manual explains how to do all of these things. Instead of paying someone else a ridiculously high hourly rate to do it, spend that time teaching yourself how to do it. Once you know how, it’ll take you less time than dealing with taking your car to a maintenance shop.

Don’t skip the maintenance. Follow the maintenance schedule in your car’s manual to the letter. Why? Skipped maintenance inevitably leads to more repair costs and a shorter lifetime for your vehicle over the long run. The fluids in your car don’t last forever, and when they start to become dirty with wear, they can cause real damage to your car. Take care of business.

Get a bus or subway pass. If you find yourself dropping coins or bills into the till on the subway or the bus every single day, get a pass. Yes, it looks expensive, but if you’re riding every day, do the math. The pass is almost always far cheaper than the cost of paying the fee every day.

Shop around for auto insurance. This means more than just using Progressive and their “comparisons.” Actually get yourself a quote from several different insurers and study their customer service and reputation a bit. You might be with the insurer that was the cheapest a decade ago, but now it’s one of the more expensive ones.

Raise your auto insurance deductible. Honestly, over the last ten years, how many claims have you made on your insurance? Instead of paying more to have a $250 deductible (for example) only to find out you’ve only made four claims over the last decade (the average of the people I polled), bump it up to a $500 deductible or even a $1,000 deductible. Then take the savings on your premiums and put it in your emergency fund. Over the long run, you’ll almost always be cash ahead.

Don’t buy cars on a payment plan. This was somewhat covered in the “buying a car” part of this series, but some of the money lost to making car payments is categorized here as well. Instead of making a down payment and shelling out cash out of pocket for the payments, pay cash for the whole thing up front.

Never sign up for a car rental at the airport. Doing so puts you completely at the mercy of the rental agencies – and you will pay for that. Take the time to reserve a car in advance.

Shop around on car rentals, too, even after making a reservation. When you’re considering making a reservation in advance, spend some time shopping around for the best rate at your destination – and keep doing it when you have a few free moments, even after you’ve made a reservation. You can always cancel the first reservation if you find a better deal – and more often than not, you will.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (January 3 – January 9, 2009)
Seven Huge Financial Mistakes I Made During My College Career This was basically a letter to several members of my family who were about to enter college.

Frugality and Binge Buying The real key is honesty with yourself. Admitting that you made a mistake and striving to figure out why you made it – and how to fix it – is how to turn a failure into a success.

A Mother’s Gifts Here are some reflections on the lessons that my mother taught me as I was growing up (and as an adult, too).

Debt Reduction and Debt Elimination Programs: What’s the Catch? Often, they’re just selling you information that you can already get for free on sites like The Simple Dollar.

When Your Financial State Improves, Do Your Frugal Standards Change? All of life’s choices aren’t based on maximizing the bottom dollar. There are a lot of factors in our lives that help us to make the choices we do.

Two Years Ago (January 3 – January 9, 2008)
When Is Frugality Stealing? This was one of my favorite discussions ever on The Simple Dollar.

How Much Frugality Is Too Much Frugality? When does being frugal cross the line into being cheap? For me, it’s in interactions with other people. I don’t mind drinking tap water as my primary beverage, but I would consider it rude (and cheapskate-ish) to offer nothing but tap water to guests in my home.

The Value of Cultural Literacy Being culturally literate has a lot of cash value. It makes conversation substantially easier, and conversation leads to the building of relationships which can in turn help you out substantially when it comes to doing home repairs, finding a job, and countless other things.

Practicing What You Preach: Should A Personal Financial Writer Be Expected To Follow Their Own Message? I think that’s a tricky question, and it was echoed for me later on when I discussed my purchase of a Prius for many of the reasons mentioned in this article.

What Color Is Your Parachute? The Flower Diagram I consider this to be an invaluable job evaluation tool. In fact, I wound up using it myself as part of my decision-making process to leave my former career and jump into writing.

Three Years Ago (January 3 – January 9, 2007)
Should You Overpay On Your Home Loan? The Simple Dollar Cracks The Numbers The best way to look at a home mortgage overpayment is to view it as a very stable investment that returns a little bit less than your mortgage interest annually (due to tax benefits for having a mortgage), is pretty illiquid, and matures when your mortgage is paid off. If that looks like a strong investment to you, then by all means, pay ahead on your home mortgage.

Making Sense of Treasury Securities: Treasury Bills, Notes, and Bonds This is an early example of a “personal finance 101″ type of article, in which I dig into the truth behind these various types of investments offered by the United States Treasury.

FreeCreditReport.com Is Ripping You Off I’m amazed that these guys are still in business. It’s shocking what a few catchy jingles can get you these days.

Your Friend Or Family Member Asks You For A Loan: What Do You Do? If you value the relationship at all, don’t loan them money. Find some other way to help them that doesn’t require repayment, because no one likes their lender.

Review: Smart Couples Finish Rich This is one of David Bach’s best books and an excellent book for any couple to read, especially ones nearing marriage or recently married. The advice really centers around one key thing that couples need to nail for money success: talking about money openly and rationally.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Nine Ways to Get More out of The Simple Dollar

This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are nine great ways for new readers to dig deeper into The Simple Dollar.

1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes – The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

4. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package – in fact, all of the main principles can be found right on the cover.

5. Follow me on Twitter – or other social networks. I post tons of interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks – you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

I also participate on several other social networks. Feel free to check me out on del.icio.us (it’s where I collect links, from which I select the ones that appear in my weekly roundups), wakoopa (what software I use), GoodReads (what books I’m reading), Facebook, and FriendFeed (which aggregates everything). I also have an irregularly-updated personal site, TrentHamm.com.

6. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

7. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

8. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

9. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” – just click on that, type in your friend’s address, and send it right along to them!

This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Transportation – vehicle purchases – $3,244

The average American family spends almost $300 per month simply on car payments. What’s stunning is that this is the average, since $300 per month would be roughly the payments on a brand new car without a down payment.

This is a number that can easily be cut with some careful planning and foresight when it comes to buying vehicles.

Focus on the cost per mile. If you’re looking to minimize the impact of a car purchase on your family’s budget, the real factor you need to focus on when making a purchase is minimizing the cost per mile of driving that you get out of the car. This means that a $2,000 car that you think you can get 30,000 miles out of is a far better value than a $20,000 car that you think you can get 200,000 miles out of.

Buy used – or at least include them in the search. If you’re focused on minimizing cost per mile, quite often, this means purchasing a used car, and that’s where most car purchases should begin. You might not necessarily wind up with a late model used car, but such cars should absolutely be an essential part of your search.

Drive the car you have for longer. Instead of trading in regularly for something better, drive your car for longer. Ideally, keep driving it until it reaches a point that the consistent problems are causing excessive financial strain and personal stress. That’s the sweet point for getting rid of a car, not the moment where you’re in thrall with the new features of the latest models.

Make your car payments to your bank account – in advance. While you’re driving that car for longer, start making the payments on yoru next car now while you don’t have a real car payment. Set up an automatic savings plan with an online bank account to keep withdrawing the amount of your car payment when your car is paid off. Keep driving for a few years while you have no car payments. Then, when you go to buy, you’ll have a fat wad of cash with which to buy plus the interest accrued in savings. Alternatively, you could buy a car on payments and then pay finance charges straight to the dealer. One of these options puts you in a better financial place – can you guess which one?

Start shopping long before you buy. Never rush into a car purchase. Start considering what your actual needs are, researching those needs, and looking for automobiles that match those needs lnog before you buy. The person who pays the worst price for a car is the person who is up against a deadline to make a purchase.

Never buy a car during your first visit to a dealership. Sure, you can negotiate, but the number they give you is never the bottom line. Walk away. Leave your number with the salesperson. Unless the car is sold quickly, don’t be surprised to get a phone call from that salesman in a few days “reconsidering” the situation and giving you a better price.

Never be afraid to walk away from a deal. If you’re simply not getting the price you think you should pay on a particular car, don’t be afraid to walk away. If you’ve given yourself plenty of time for a purchase, you’re fine. There are plenty more fish in the sea.

Hit your social network. If you’re shopping for an automobile, mention it to your friends and family and see what they’re aware of. They might just know of someone who has a car for sale by the owner or some other arrangement that takes place far from a car dealership. These types of arrangements usually provide the best deal for both the seller and the buyer.

Avoid leases, even if the sticker price seems good. Leases do allow you to drive a shiny new car for a lower price than a full car payment, but at the end of the lease, you’re left with nothing (except for perhaps an opportunity to buy that leased car – that is, after you pay plenty of fees). Avoid that rat race and focus on actually buying a car for yourself and keeping it until well after the payments run out. It’s those payment-less months that really make buying a car into a much better deal.

Know your needs (distinct from your wants) and be open-minded. You might know the exact model you’re looking for, but be open-minded about it. Keep your eyes and ears open for strong deals on other models. Be aware of a long list of models that you would find acceptable and don’t be afraid to jump on bargains that appear from that list.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

This is part of an ongoing series about how to trim the budget of the average American. As this series focuses on such broad-based tips, some will work for you and some will not. You’re invited to mention in the comments the tips that you found to be the most useful for inclusion in a comprehensive budget trimming guide at the conclusion of this series.

Food – food at home – $3,465

Another $300 a month component of the average family budget comes from merely eating at home. This does not include food eaten outside the home, nor does it include household cleaning supplies, toiletries, and other items that typically are bunched together in a family’s budget (since they’re often purchased together).

I like cooking at home – in fact, I’d go so far as to say I’m passionate about it. As a result, I often talk about cooking and food on The Simple Dollar, so for you regular readers, many of the tips below will seem old hat.

Five years ago, though, I rarely cooked at home at all. I could barely fry an egg and most meals just seemed ridiculously hard. Instead of putting out all that effort, I’d just go out to eat – and that became an enormous money leak in my life.

Here are twelve big things you can do to reduce your food spending at home, regardless of whether you eat out a lot or if you eat primarily at home.

Learn how to cook at home. The actual ability to cook real food makes it much easier to simply make the choice to eat at home instead of eating out. If you have difficulty boiling an egg, eating out seems like a vastly easier and less time-consuming choice. It’s not. I recommend checking a copy of How to Cook Everything by Mark Bittman and just start at the beginning, trying everything suggested in there. It’s the closest thing I’ve found to a “teach yourself to cook at home” book that doesn’t overwhelm you in details right off the bat.

Make grocery lists. Keep a list on your refrigerator with a pen dangling from it. The simple way to do it is to take two cheap fridge magnets, a notepad, a pen, and a piece of string, and homebrew it. Just glue a magnet to the back of the pad and hang it up. Then, glue one end of the string to the other magnet, tape the other end of the string to the pen, and hang up that magnet. Whenever you notice something you need, write it down immediately. Then, when you go to the grocery store, trust your list. Buy only what’s listed. Don’t wander aimlessly and buy a bunch of impulsive things.

Make a simple price book to determine which store near you has the best prices. The easiest way to do this is to identify the fifteen to twenty-five most common things you buy at the grocery store, then shop at a bunch of different stores and compare the prices on these items. The store with the lowest average price on the things you buy should be the store you shop at regularly. I was surprised when I did this test myself, because I discovered that the store I thought was low priced was far from the least expensive option on the stuff I actually bought routinely.

Make a meal plan. Plan out what you’ll eat a week in advance before you leave for the grocery store. Know the next seven breakfasts, lunches, and dinners you’ll have, then make sure you have all of the ingredients for them. If you don’t, add that ingredient to the shopping list (it’s right on your fridge, right?).

Use your grocery store flyer. The grocery store flyer can be a great extension of the meal plan. You can use the flyer to see what items are on sale that week – particularly the fresh produce. Plan your meals for the upcoming week around these items. This will reduce the average cost of each meal because the meals are centered around an ingredient or two you got at a deep discount.

Buy fewer convenience foods. I don’t just mean frozen meals (I’ll get to those in a minute). I’m talking about things like pre-bagged lettuce and pre-cut apples. If you actually sit down and compare the prices on such prepared foods, you’re essentially paying $5 or so for about three minutes’ worth of work. Get some reusable containers, go home with the raw lettuce or apples, and do such things yourself.

Make more convenience foods. Instead of stopping each morning for breakfast, make your own breakfast burritos in advance and freeze them. Instead of just buying a premade mediocre overpriced casserole, make your own casserole in advance and freeze it. You can make your own convenience foods – and you’ll find that they’re both tastier and less expensive than the convenience foods you’ll buy elsewhere.

Drink filtered tap water as your primary beverage. Water from the tap is the least expensive beverage available to you – take advantage of it. Make it into your primary beverage throughout the day. You don’t have to give up whatever your favorite beverage might be – mine is vegetable juice, actually – but if you replace the majority of your intake with water, you’ll reduce your spending, reduce your calorie intake, and view that drink you like so much as a treat rather than a mundane requirement.

Eat (and enjoy) leftovers. When you have food left over, don’t just push it to the back of the fridge and forget about it. Have leftovers for dinner once in a while – and make it more flavorful by amping up the spices in it. Use leftovers as the basis for future meals, like transforming pot roast leftovers into a pie. Even better….

Brown bag your lunch. Take leftovers when you can. Even if you can’t, a simple meal made at home and taken to work is far, far cheaper than going out with the gang. Try doing it one or two days more a week than you do now and you’ll be surprised to see how much money you can save.

Have potluck dinners with friends. Many people socialize by going out to dinner. Why not do the same thing at home with home-cooked food and a much, much smaller bill? Start a series of potluck dinners with your friends by hosting the first one – make the main course and ask your friends to bring side dishes. It can be a fun social engagement, plus it’s a big money saver when it comes to food.

Appreciate (and utilize) the low-cost staples. I love beans. They’re incredibly inexpensive, very filling, and provide essential protein in your diet. I use beans as often as I can in recipes. Rice is another low-cost staple (though not as low-cost as it once was) that can provide an essential element to your meals. Look in the produce section of your local store over time and note the ingredients that are very low-cost. Seek to grow intimately familiar with how to make these items – and you’ll find yourself saving a lot of money.

I want your help! In the comments, please let me know which of the tips you find most useful for trimming these costs. I’ll include the top choices in a comprehensive budget trimming guide at the conclusion of the series.

A few weeks ago, my wife and I planned a meeting with a financial advisor that was the representative for her 403(b) plan. Due to some rule changes, she was no longer eligible to receive an employer match with this plan, but she had been happy with their offerings and performance, so we had made the tentative decision to leave her supplemental 403(b) savings with that company.

Her advisor wanted to meet with us to facilitate all of these changes. I thought it was a good idea, since I hadn’t actually met the advisor face to face and my wife had only met him a few times for very brief meetings.

During the meeting, however, it became obvious that we needed to choose a different direction with our money.

We spent the first fifteen minutes of the meeting waiting for his computer to start up and run “updates.” Because the advisor hadn’t prepared for the meeting at all and his file with my wife’s information in it was out of date, there was nothing else to do during this time other than to sit there and make small talk. Red flag #1

He spent most of the meeting attempting to sell us on a whole life insurance policy. He kept showing us how great the returns were, but he refused to compare the amount being spent on the policy each month to a comparable term policy. Red flag #2

When he did finally get around to the actual purpose of the meeting, he had my wife fill out incorrect forms not once, not twice, but three times. Red flag #3

He argued at length with my wife about whether or not she should get a traditional IRA or a Roth IRA instead of the 403(b). He argued that we should use a traditional IRA because our income was relatively low. My wife (and I) repeatedly insisted that the Roth IRA is better in that case. He argued with us for several minutes, insisted that she fill out the forms for a traditional IRA, and then eventually looked up the information. “What do you know? You’re right – the Roth IRA is the one you should be using.” Red flag #4

Needless to say, we took our forms with us and then quickly shredded them upon arriving home. My wife is now opening a Roth IRA through Vanguard independently.

The real lesson of this story? Just because someone has the title “financial advisor” and has all of the appropriate certifications does not mean that that person can effectively and efficiently meet your needs. You should always meet with any and all of your financial professionals and draw your own conclusions.

It never hurts to know your stuff. Because my wife and I have been intimately involved in our personal finances for years, we knew what kinds of questions to ask and what to look for. We knew our stuff – and it revealed that our “advisor” did not.

After that meeting, my wife felt more competent and ready than ever before to take control of her own retirement savings and manage them herself through Vanguard. In the end, our disastrous meeting actually ended up being a confidence-builder, putting her in a place where she felt much more sure of herself than before.

Meet with your advisors. You might learn things you never expected to learn.