Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar.

If you haven’t started up a 401(k) plan (if you’re an employee) yet, what are you waiting for?

Let’s say you make $40K a year and you’re twenty five years old, meaning you’ll retire sometime around the age of sixty five. Even if you just contribute 1% of your salary - less than $10 a week (and it’s employee matched) into your 401(k), it returns an average of 8% a year, and you only get a 4% raise a year, do you know how much you’ll have at age sixty five? $369,388. If you make that donation just 2.5% - still less than $20 a week before taxes, meaning only about $15 a week out of your take-home - and get the employee match, you’ll have $923,471 in your retirement account at age 65, just shy of a million bucks. In short, a 401(k) plan can add up to huge amounts of money - and it doesn’t cost very much, either.

Even more impressive is the fact that most companies offer a match for every dollar you put in. Quite often, this can go as high as 5% of your paycheck that they’ll simply give you if you put it into your retirement account. All you have to do is invest.

I don’t know anything about investments! Don’t worry about it. Put it all in a target retirement fund (something almost all 401(k) plans offer) and let them do all of the investment managing for you.

But what about the folks who got ripped off by Enron? Since that debacle, retirement plans have had new rules introduced that protect you from such a catastrophe - they’re not allowed to invest all (or even most) of your retirement plan into the company’s stock. In other words, even if your organization collapses, your money won’t just disappear.

Make the phone call right now to your organization’s human resource office and ask to start up a 401(k) plan, even if you know nothing about investing. Tell the person you just want all of it in a target retirement fund, which means someone else manages the whole thing for you based on when you’re expecting to retire. I’d recommend putting in as much as your company matches for starters, but as you can see, even a couple of percentage points isn’t bad.

Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar.

The average American has a savings account at their local bank, which offers on average an interest rate of 0.5%. That’s abysmal, and it’s basically impossible to get ahead with that kind of interest rate.

Fortunately, there’s a new crop of savings accounts now appearing with all of the features of a regular savings account (FDIC insured, easy deposits) with an interest rate that actually works for you - regular rates at 4.5% APY or above and some introductory offers as a $25 sign-up bonus or a 6% APY over an introductory period.

How much can I make? Let’s say you have $1,000 in your savings account. A typical savings account earns about 0.5% APY, so after a year you’d have $1,005 in the account. HSBC Direct, for example, has a 5.05% APY, meaning that after a year, you would have $1,050.50 in the account, which is $45.50 more than you would in your local neighborhood savings account. Every year after that, the money you can make in a high-yield savings account is even greater than your local simple savings account.

How do I start? I personally use ING Direct (4.5% APY as of this writing, amazing customer service, stellar interface). You can find a huge list of high interest savings accounts at bankrate.com.

When you’ve found a bank, just sign up and transfer some money in from your checking account. I’d recommend setting up an automatic withdrawal plan into that savings account - even just a little bit each week - so that you can steadily grow that account over time. I use such a scheme myself to keep my emergency fund well funded - and an emergency fund is a valuable thing to have so that surprises don’t derail your financial plans.

Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar.

Ever had to face down a $150 grocery bill? I have, and the reason was usually that I entered the grocery store without any sort of plan, wandered down every aisle trying to decide what we were going to have for supper, and ended up just buying tons of unnecessary stuff - including even some things I already had at home.

You can avoid that pain by starting a grocery list, sticking it on the refrigerator, and adding items to it as time goes on. Here’s what you do.

1. Get a magnetic note pad or make one yourself. You can get a cheap magnetic pad from Amazon, or make your own by gluing a freebie refrigerator magnet (or two or three of them) to the back of a normal pad of paper.

2. Attach a pen to the pad. Just take a pen with a cap, tie a piece of kite string around it, tape that string in place, then tape the string to the back of the pad. Done.

3. Put it on the fridge. Now, slap that pad up on the refrigerator door so you have a place to conveniently make a list.

4. Whenever you notice something you need, write it down. I often notice things we’re getting low on throughout the week, so whenever I see something that we actually need, I jot it on the top sheet of the pad.

5. Before you go to the store, think of a few meals you would like to make, see which ingredients you have, and write down the ones you don’t. This usually means planning your meals ahead a bit. My wife and I usually just identify three to four meals for the coming week and check to make sure we have all the stuff for them. Whatever we don’t have goes on the list.

6. Take the list to the store with you and stick to it as best you can. Once you’re in the store, you’ve already got a list of everything you need, so just stick with it. Don’t buy anything that’s not on the list - don’t even look at it.

This seems trivially simple, but very few people actually take a few minutes to do this and it saves a lot of money. How? By focusing on your list rather than the stuff on the shelves, you’re much less susceptible to the clever packaging and advertising of the products on the shelves - and thus you wind up with fewer unnecessary items in your cart.

Time spent: A minute here, a minute there
Money saved: $20 per store visit (that’s about what I save with weekly shopping trips, based on “before list” and “after list” comparisons)

Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar.

Tip #2: Call your credit card company
According to CardWeb, the average American household has approximately $9,200 in credit card debt, with the average interest rate hovering around 16.5%. Just a quick bit of math shows that a household with the average credit card and credit card debt is paying $1,518 in finance charges a year. That’s a lot of dough.

Fortunately, there’s a very simple tactic that anyone can use to reduce those finance charges a bit without damaging your credit report. All it takes is a few minutes on the phone and suddenly your finance charges will be steeply lowered. Here’s what you do.

1. Take your highest interest credit card, flip the card over, and dial the customer service number on the back. Wade through their phone menu until you reach a customer service representative.

2. Ask to speak to a supervisor. At nearly all credit card call centers, the people who first answer the phone have no power to do anything at all.

3. Tell the person that you are having difficulty making payments on time and you are seeking a rate reduction. Usually, most supervisors will approve this request immediately and drop your rate by 5 to 7%, because it’s more cost-effective for the company to drop the rate than have to deal with a customer who may be making late payments.

4. If the supervisor refuses to budge, indicate that you are looking into debt consolidation, whether or not you actually are. Mention the possibility of transferring the balance to another card with a low introductory APR. Again, rather than facing the potential loss of income due to a complete payoff, the supervisor will often reduce the rate at this point.

5. If the supervisor still won’t budge, hang up and call back another time of the day (if you called in the morning, wait until the evening, and vice versa). Some supervisors are simply unwilling to reduce rates for any reason, while others are much more willing.

Some tips:

Don’t repeatedly request rate reductions on the same card. If you get one, consider it good enough and don’t continue to call and ask for further reductions. Why? Many companies maintain databases of “trouble” customers and customer service for these individuals in the database is much more difficult than before.

Don’t hesitate to try this on all your cards, but be aware that the lower the interest rate, the less likely you will see a significant rate drop. If you’ve already got a 7.9% interest rate, this phone call probably won’t do you too much good. Instead, save this tactic for the cards that are above 15%, as those are the cards where this tactic is cost-effective.

If you can’t get a reduction at all, consider another solution. This may include signing up for another card and transferring the balance, even though a new card will ding your credit report a bit in the short term. If a reduction or elimination of interest rates makes it possible for you to pay off your card quickly, this may be the way to go.

Remember, this advice is useless if you don’t also curb your spending. If you can’t afford to buy things, don’t buy them just because you have the plastic!

Time spent: Five minutes
Money saved: $460 (that’s 5% of $9,200)

Five Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar.

Tip #1: Clean your car’s air filter
In general, most cars should have their air filter replaced every 15,000 miles. What most people don’t realize, though, is that their car’s air filter begins to get clogged with dust after just a few thousand miles - and when it begins to get clogged with dust, the air flow under your hood slows down and your automobile quickly becomes less fuel efficient. How much less efficient? A dirty air filter, even after just 5,000 miles after a change, can cost you up to 7% of your gas mileage. If you are driving a car that normally gets 20 miles per gallon, your car is now getting 18.6 MPG. Over the next 10,000 miles, that’s an extra 37.6 gallons of gas, which with gas at $2.10 per gallon, costs you $79.03!

Cleaning off your air filter is easy (can you turn a wing nut with your hand? If you can, you can handle this) and it only takes about five minutes. All you need is your car, your owner’s manual, and a vacuum cleaner. I usually do it when vacuuming out my car normally, so I usually don’t even have to worry about pulling out my vacuum, making it a two minute task.

Here’s what you do:

1. Open your car’s hood.

2. Take a peek in your car’s owner’s manual to see exactly where the air filter is. It’s usually right on top under the hood and easy to reach. On my truck, it happens to be in a round metal container that’s right in front of my face; on other cars, it can be square or rectangular, but still right in front of you. Locate it under the hood.

3. Take off the top of the metal container that the filter is in. It’s either held in place by some clamps that you can flip up with your finger or a wing-nut that you can unscrew with your hand.

4. Pull out the filter. It’s just sitting in there, so you should be able to pick it right up.

5. Use a vacuum cleaner to clean off the filter. I usually tap it a few times on my car’s bumper, then vacuum it for a minute or so.

6. Vacuum out the inside of the chamber where the air filter sits. There’s usually a bit of dust in there. Vacuum it for fifteen seconds or so to get any dust you see.

7. Wipe off the inside of the chamber with a rag or a paper towel. You should be able to get a bit more grime with this. Don’t scrub it or anything, just get any grime that’s easily accessible.

8. Put the air filter back in place, put the cover back on the air filter chamber (don’t forget to put the clamp or screw back in place!), and close your hood. You’re done!

I recommend doing this every 5,000 miles or so. If you ordinarily have a mechanic do this, you can do it yourself 5,000 miles after an air filter change. Once you do it a couple of times, you’ll probably be fine with just changing your air filter yourself, which will save some additional money if you have your mechanic do it.

Time spent: Five minutes
Money saved: At least $79