A generation ago, when people made the choice to switch to plastic, credit cards did not just replicate cash; they fundamentally changed how we used money. The ease with which people could make purchases encouraged them to buy much more than they had in the past. Entrepreneurs suddenly had access to easy — though high-interest — loans, providing a spark to the economy. Now, while it may be hard to predict what innovations PayPal’s platform will enable, it’s safe to say that the payment industry is going to change dramatically. As money becomes completely digitized, infinitely transferable, and friction-free, it will again revolutionize how we think about our economy.

The technology discussed in this article is undeniably cool. It will make transactions for many purposes much, much easier than they’ve ever been. The acquisition of goods and information will become even easier.

Here’s the thing, though: each time there’s a new technology for exchanging money between people, there’s a cost for the people exchanging money.

Take cash, for example. We pay for the cost of printing cash with our taxes. With credit cards, we pay for the convenience with financing charges and higher costs at retailers. With electronic transactions, we pay for the convenience with a small surcharge in each of the transactions.

In each case, there’s an inherent cost of using the means of exchange. With cash, the people who have more of it pay more taxes and thus bear more of the burden of the cost. With credit cards, some of the burden is pushed to the retailer, but the consumer still pays for it. With purely electronic transactions, even if the fees are entirely pushed to the retailer, the customer still pays for it with higher costs on the items they buy.

The “future of money” is just a remix of the past of money. The more you spend, the more it costs you.

If you spend lots of cash, that means you have lots of cash and you’re going to be taxed for it. If you rack up large credit card balances, you’re likely paying finance charges, plus you’re paying higher costs at retailers because they’re covering some of the cost of that transaction. Similarly, if you make lots of electronic transactions, you’re losing more and more money to the overhead fees.

It doesn’t matter what format of financial transaction you’re using, the basic method of success stays the same. Don’t spend money with reckless abandon.

If you hold onto your cash, you can eventually move into a position where your savings supports you, either in part or in full. In that position, you pay less taxes than you did before.

If you don’t put balances on your credit cards, you’re not socked with the finance charges and you’re not paying the “surcharge” built into the prices of the stuff you buy.

If you don’t do lots of PayPal transactions, you don’t lose money to the fees charged on all of these transactions. The fewer transactions you make, the less money you give away.

The new money works the same way as the old money. The less you spend with reckless abandon, the better financial shape you’re in. The more you spend, the more money you simply give away in the form of fees, taxes, and surcharges.

The danger, though, is the same as it was with the move from barter to money and from money to credit cards. It’s now easier to spend the money. When we bartered, an exchange of value was difficult and time consuming. When we moved to currency, it became much easier to spend money and debt became prevalent. When credit cards appeared, consumer debt grew like crazy because it was so easy to spend. Electronic transactions are even easier – just a click of your mouse and it’s done. It becomes even harder to think through the buying decision, which means that there’s even more room for businesses to profit from you.

The best thing we can all do is separate what we’re buying from how we’re buying it. Do we need to buy this? If we do, buy it in a way that’s the most personally responsible. If we don’t need it, though, play it safe and careful. Shy away from the easy buy, because that’s the road that creates personal financial trouble.

The post Meet the New Money, Same as the Old Money appeared first on The Simple Dollar.

As I mentioned a while back, I received an iPod Touch as a Christmas gift this year. An iPod Touch, for those unaware, is basically an iPhone without the phone – but also without the ridiculously high monthly phone bill. Over the past three months, I’ve used it a ton – but not as an iPod. Instead, I’ve been exploring the mountains of free applications available for it that you can download at your convenience right on the device.

There are literally tens of thousands of applications available for the iPod Touch and you can simply browse through them at your heart’s content, downloading the ones you want to try. Many of these applications are completely free – no cost at all – but many of the truly useful ones do come with a fee.

Given my interests, it’s not surprising that I’ve dug deeply into the personal finance and productivity applications available for the iPhone/iPod Touch. I’ve literally tried out hundreds of these applications over the last three months and, in the end, I’ve found only ten that I would actually recommend to others – and six of them are free.

An aside: I do not think the iPod Touch or iPhone is a necessary purchase for anyone. While I have found uses for it, I do not think it is worth the out-of-pocket entry price. Don’t view this as a list of reasons to buy one – look at it as a list of very useful things if you already have one.

Let’s dig in.

Six Essential Money-Saving Free Applications
These six tools are free for download from the App Store. I use each of them on a regular basis, particularly Bloomberg and the tip calculator.

Mobile Banking
Several different banks (Bank of America, Chase, PNC, and Citi among them, as well as several smaller banks that use a combination tool from AT&T) offer tools for the iPod Touch/iPhone that allow you to access online banking from anywhere. Depending on the bank, these offer the ability to check your account balances, do online bill pay, and even locate nearby ATMs (if you’re using an iPhone). These tools are perfect for doing your bills while you’re waiting at the doctor’s office, for example. Hey, ING Direct! If you’re listening, such an app would be an awesome addition to your tools!

Bloomberg
Bloomberg’s stock-tracking app is a huge improvement over the default “Stocks” tool that comes by default on every iPhone/iPod Touch. The tool provides financial headlines, a stock market ticker, and the ability to set up your own portfolio of stocks and index funds to follow. The data this tool provides is a great way to do basic research into stocks and index funds on the go, though it’s not a perfect tool for day traders. It’s just what I needed, though. [App Store]

My Budget Money Management
There are several free budgeting tools for the iPhone/iPod Touch – this one is the best of the lot, by far (in my opinion). It’s pretty easy, actually – you just define any number of spending categories you want (Auto, Entertainment, etc. – it comes with ten categories by default, but you can remove and add to your heart’s desire), how much you want to spend in that category, then just enter expenses as the month goes along. If you already have a household budget worked up in a spreadsheet or on paper, it’s pretty easy to switch. Even better, if you have a Mac, there’s a desktop client for My Budget that enables you to do most of the work on your computer, then do the little expense entries on your handheld device. [App Store]

Mint.com
Mint is a nice service for managing your finances all in one place, but I have some personal information security concerns about it. If you’ve decided for yourself that the benefits are worth it, then Mint’s iPhone/iPod Touch application is really useful for keeping an eye on all of your finances easily in one place on the road. There were a few other personal data aggregation tools for the iPhone/iPod Touch that were quite slick, but the security of such tools makes me nervous (and thus makes me not recommend it). [App Store]

CheckPlease Tip Calculator
How much is an appropriate tip? What if you’re splitting the ticket and tip among several people? Most of the time, when this comes up, people just make ballpark estimates, but a good tip calculator (and this is the best free one available for the iPhone/iPod Touch) can make such calculations easy. Just type in your total, set the percentage tip you want to leave, and the number of people splitting the ticket, and the calculator will tell you what tip you should leave. It also adds the tip to your total, making filling out a credit card receipt quite easy. This is a lot better than just “rounding up” for your tip. [App Store]

Bankarama Lite
Bankarama is basically a checking account ledger on your iPod Touch/iPhone. It’s an incredibly useful way to keep track of recent debit card uses and thus keep you from accidentally overdrafting your account (due to transactions that haven’t hit your account yet). This application would have saved me many times over the years. [App Store]

Four Essential Money-Saving Paid Applications
I also discovered four paid applications that are well worth using. Each of these can easily pay for themselves with even minimal regular use.

Grocery IQ
Cost: $0.99
This is the most effective tool I’ve found for making a truly effective grocery list. Just type in the first three letters or so of an item you want to add to your grocery list and the program automatically fills in the rest of the information and adds it to your grocery list. The list itself is auto-sorted for you into sensible groups – dairy, bread, frozen foods, etc. – so that you can snag all of the items in that area of the store all at once. You can also organize the list by aisle in your favorite store by assigning these item groups to aisles once – after that, your list will automaticlaly list items by aisle as well. This tool has made grocery shopping substantially faster, which means I spend far less time wandering the aisles – which means far fewer impulsive buys at the grocery store and thus money saved. Excellent tool. [App Store]

iXpenseIt
Cost: Free for lite version, $4.99 for full version
While the above “My Budget Money Management” is the best free budgeting tool, it is clearly surpassed by the full version of iXpenseIt. iXpenseIt is pretty much the closest thing to Quicken in your pocket – it’s a thorough, robust, and flexible tool that handles virtually every budgeting or expense tracking task you can throw at it. My recommendation is to try out the free “My Budget Money Management” first to see if it fits your needs, then investigate this tool (by trying out the free “Lite” version) if you’re sorely needing a few particular features. [App Store]

Gas Cubby
Cost: $4.99
I’m almost obsessive about keeping track of the mileage on my truck. I like to see how different things affect the mileage – does it do better on the highway or the city? How much does inflating the tires help (quite a bit, actually)? Does an oil change and other regular maintenance help (actually, a fair amount)? Gas Cubby not only works as a perfect mileage tracker (with plenty of room for notes), but it also functions as a very useful maintenance calendar, alerting you to any and all maintenance you need to do based on your current odometer reading. If you keep a maintenance calendar for your vehicle (a great way to keep your vehicle running well) and also want to keep tabs on your mileage, this is an essential tool. [App Store]

Remember the Milk
Cost: Free (sort of)
I’ve tried almost every task management program on the iPhone/iPod Touch and I keep returning to Remember the Milk. RtM is a free web-based task management tool that I’ve been using for years – and, because I’ve used it so much, I was quite willing to pay extra to support the tool and become a “pro” user (it costs $25 a year, but it’s worth it for me to support a tool I use so often). With that “pro” membership comes an iPod Touch/iPhone application that has all of the functionality of RtM, except that it can be used offline, anywhere you are. The application is usable for two weeks without a “pro” account if you want to try it out. Given that I use this to manage everything in my life – personal things to do, work-related things to do, managing projects – it’s well worth it to me. There are many other options for task management on the iPhone/iPod Touch, but I’ve not found one that matches RtM for me. [App Store]

Bonus: Five Free Google Mobile Tools You Need to Bookmark
Google offers a ton of goodies for people who have mobile devices like the iPhone/iPod Touch. Just point your web browser at these URLs and bookmark them.

Gmail
http://gmail.google.com
I don’t use the email program that comes with the phone at all. Instead, I use Gmail – it centralizes all of my email in one convenient place. The “mobile” view of your email is very easy to read and it lets me check for new messages, read them, and punch out quick responses without much effort.

Google Reader
http://reader.google.com/
I use Google Reader to keep up with about fifty different blogs. The mobile version of the site allows me to browse through the fresh articles on all of these sites in a format that’s very readable on such a small screen.

Google Calendar
http://calendar.google.com
Again, I use this as my primary calendar tool both on my iPod Touch and on the desktop. I find it much more useful than the iPhone/iPod Touch built-in calendar tool, though I do sync up my Google Calendar with it so I can get my appointments and important dates even if I’m offline.

Google Tasks
http://www.gmail.com/tasks
If you’re just looking for a very simple task list on the go, this will probably do exactly what you need. Just add tasks, then check them off as you do them. It’s at least as good as any free task list tool on the iPod Touch/iPhone, plus you can edit it at your desk if you prefer.

Google Notebook
http://m.google.com/notebook
I use this to take longer notes and save them for future reference. Often, I’ll jot down notes on my iPod Touch, then look at them later when I’m at my desk so I can appropriately deal with the idea/material.

Good luck!

The post Ten iPhone and iPod Touch Apps for Personal Finance Success appeared first on The Simple Dollar.

So what items did I find useful? Here are five gadgets (for lack of a better collective term) that I use over and over again. Notice two things about this list: the items have a lot of utility and are really inexpensive, and some of them lead directly to saving money themselves.

Swiss Army Sportsman II pocket knife This is a $10 Swiss Army knife that does 95% of the stuff I want such a device to do. It has only a single blade, but it also includes a can opener (useful while camping), a bottle opener (useful all the time), a cork screw, and tweezers – those are the ones I use most frequently. It also includes two flathead screwdriver heads (which I’ve used on occasion) and it’s tiny enough that it fits in my pocket unobtrusively (something I can’t say for a lot of Swiss Army-type knives and tools. I use this thing probably two or three times a day.

1 GB Flash drive I was actually given one of these at a tech demonstration and use it probably three times a week. It’s always in my pocket or hanging around my neck when I travel anywhere. Don’t spend much on this unless you need a lot of storage capacity – 4GB or more.

Honeywell 5/2 Programmable Thermostat This is one of the most expensive items on this list ($40! *gasp*), but it is incredibly useful and saves a lot of money. Simply put, you program it so that the air conditioner/furnace doesn’t run during the day, but then starts running before you get home from work, running only once during the entire day and saving on peak energy use. The one I linked to is a “middle of the road” one – the high-end thermostats are amazing as you can program separate day profiles, whereas the less expensive one has a “weekday” profile and a “weekend” profile.

Merkur Classic Safety Razor If you’re on the gravy train of using stuff like the Gilette Mach 3 Turbo for shaving – or even cheap disposables – stop. Get an actual old-fashioned safety razor and a bunch of blades. I wrote a detailed guide on how to save money shaving in the long run and get a much better shave.

Tire pressure gauge I check the air pressure in my vehicle tires regularly and for the longest time I used a really awful pencil-shaped air pressure reader that gave readings that were approximate to within 5 PSI and usually let significant air out of the tire while doing it. I eventually moved to one recommended at an auto parts store (it’s linked above) and have been extremely happy using it. I check the air pressure on the tires once a month and before any long trips and air them all up to the recommended maximum as stated on the sidewall of each tire. This saves constantly on gas mileage – every single PSI that any tire is below that recommended maximum costs you 0.125% of your fuel efficiency. So, if every tire is, say, 5 PSI below the maximum, you’re losing about 2.5% of your fuel efficiency, which means an extra mile or two per gallon that you’re losing. Over time, that’s a lot of scratch – a gallon of gas or so every time you fill up.

Soon, we’ll find out about another gadget – a barely-used KitchenAid Pro 6 stand mixer that a reader has generously helped me to find at an unbelievably stellar price (to the point where I would have been really dumb not to do it considering I’ve been saving for one for a few months). More details to come (likely when I receive it and use it a few times).

The post Five Gadgets That Were Well Worth The Investment appeared first on The Simple Dollar.

Here’s the process we intend to follow when switching to Verizon; it may be helpful for you in your own cellular plans.

Use your old bills as a basis for what you’ll do in the future. Looking at the last six months of our old bills, it became clear that we are paying for far too many minutes and so we’re looking for a lower-minute plan for our next purchase.

Do the research before you leave. Visit the websites of major providers and know what their plans are before you leave. You should especially know what sort of options you will want on your plan and which ones you don’t want, because salesman will often throw on services you don’t want if you don’t explicitly tell them that these are the only options you want. Also, have some idea of the phones available and what you want.

Know what you want before you walk in the door. For example, we just want a basic calling plan with only a relatively low number of text messages, because that’s what we use now, and also the ability to access a small amount of web data (limited data transfer, for Remember the Milk, for example). We also need new phones, but we don’t need high-end ones or Blackberries or anything like that.

Specify EXACTLY what you want and don’t want in your plan. Make it clear what you specifically want in your plan as soon as you begin talking, then tell them you’re going to browse the equipment for a bit. Why? This gives them a bit of time to think about their commission before you finish off the deal.

Don’t bother negotiating on the service plan. Plan prices are set by the national provider and local stores simply don’t have the option of negotiating with you, so don’t even waste their time. Instead, look for stuff you can ask for instead, like…

Ask for lots of other stuff. Ask for your activation fee to be waived. Ask for some free (or at least reduced) equipment. Since the salesmen typically don’t earn a commission on the equipment, they’re often happy to give a discount in order to seal the deal and get their commission from the plan. They’re going to be thinking “easy commission,” so take advantage of that mindset to get cheap phones.

This is almost exactly what we did when we first signed up for a cell phone service and we ended up getting no activation fee, all of our phones for free (they weren’t low end phones, either), and a few random items in the store for free, too. The guy behind the counter was about ready to explode with desire for getting his commission, so he was waiving everything and giving us all sorts of goodies just to get his commission on the plan we were purchasing.

The post Six Things To Do When Shopping For Cell Phones And Service appeared first on The Simple Dollar.

Normally, I wouldn’t care about this too much. My years as a frequent buyer of music are in the past – today, I buy an album roughly every three months. I’m not a person who one would think would be affected too much by digital rights management issues, right?

Wrong.

In the past year, I have had multiple negative experiences related to digital rights management that have directly impacted my pocketbook in a negative fashion in multiple ways. Thanks to these approaches, it now costs me extra money to share my music collection with people in my immediate family, to move it from place to place, and to use it in multiple formats. Even worse: it costs me a lot of valuable time as well, time I could be using building The Simple Dollar or engaged in other worthwhile activities that could either fulfill my life or make me money.

Want an example from my own life of how DRM media creates hurdles to authorized reproductions – and also introduce security concerns? About a year ago, I picked up a copy of the Foo Fighters album In Your Honor on sale in CD format. I took it home and attempted to convert it to mp3 on my computer. What happened? Audio garbage. It turns out that this CD is “protected against unauthorized duplication.” Obviously, there is a way around it (just deactivate the SbcpHid item in the Windows device manager), but it cost me a significant amount of time to find this solution to the problem. This is the only CD I have ever purchased that caused such an effect.

It’s not only a major issue in terms of usability (I burnt a couple hours figuring out how exactly to do what I could easily and legally do with any other CD), it’s also a question of security. This SbcpHid driver introduces security issues onto my computer that I was completely unaware of and didn’t authorize, no different than a virus. Not only do I have to spend time figuring out the problem, I also may have made my computer less secure. Just to listen to one stupid CD.

Total cost of jumping through DRM hoops: Two hours @ $20 an hour = $40.

Want another example? DRM forces additional waste of your own media to transport/store/back up DRM-enabled media. Recently, I used an iTunes Music Store gift card to download The Shins’ newest album Wincing The Night Away. I stored it on my local hard drive in my iTunes program. If we were not in an era of digital rights management, I could just copy those files directly to my wife’s laptop as well and she could enjoy the music in whatever way she saw fit. This was no problem in the not-too-recent past, when my wife could have just borrowed the CD or the record and done the same thing.

The problem is, my wife hates iTunes. She uses another program to listen to her music. Thus, in order to share music with my immediate family (something well within any reasonable definition of fair use), I had to burn a CD-R copy of the album and then convert it to mp3 on her computer. I could have also went online, found mp3s of the album, and downloaded those, but that would have been at least as much of a time suck as this process was, considering that your IP address could potentially be labeled as a pirate if you download to a shared folder inadvertently or something and you also have to check to verify that the mp3 is actually the music you intend it to be.

Total cost of jumping through DRM hoops: Twenty minutes at $20 an hour = $6.67, plus the cost of a CD-R equals roughly $7.

Let me put it this way: in order to share a CD I enjoy with my wife and to even rip a different CD onto my laptop, I burned through a CD-R and more than two hours of my valuable time. These are tasks that would have taken a minute or two before the media giants became obsessive.

I’m not even including indirect costs to the consumer, such as additional energy use to decode DRM-encoded material, the expense for developing DRM software (which is passed on to the consumer), and costs related to the expense of buying specific media players to play back DRM media.

The truth is that this issue affects all consumers, whether they are purchasers of media or not.

It comes down to a question of who actually owns a product that you pay good money for, because DRM isn’t just a technology, it’s a business philosophy that can be extended to any product.

As technology continues to grow, companies will have more and more power to place technological restrictions on the products you use every day. The power to end the usefulness of any electronic device is already here, and it’s a matter of time before packaging design and other elements do the same thing to any material, from appliances (a device set to stop working after a certain “leased” period of time) to packaged food (a time-release element that causes the food to become inedible) and so forth.

If this isn’t a future you want, you need to use your power as a consumer and boycott any and all products in which company policy restrict your usage. If a company is providing advice on how to use a product, that’s fine, but if a company tells you that you cannot use a product in a certain way and puts technology in the way of your usage, don’t buy the product.

I’ll say one thing for sure: I will never again buy anything sold by Sony, because battling their DRM policies on the Foo Fighters CD I paid good money for showed me clearly how little respect they have for me as a customer.

The post How DRM Directly Costs You Money And Time – And Why Every Consumer Should Care appeared first on The Simple Dollar.

Simple. I buy gadgets that can pay for themselves (and even see a bit of return) over the long haul. This usually means I look for energy-efficient gadgets, but it also means that I try to evaluate things in terms of whether or not they can potentially return money to me. What’s nice is that many of these gadgets that save me money in the long run make a great deal of environmental sense as well.

Here’s a list of twenty five neat items I’ve found that can save a lot of money, along with their cost and the amount of time that it will take before their extra cost is paid for by their utility. Since they’re gizmos, they make for great gift ideas, plus you can use the argument that “this will save money” when suggesting the purchase of one of these items to your significant other. In fact, I actually started this list as justification to my wife for a few items I wanted to buy for myself.

1. Filtered Water Bottle
Sample Model: Katadyn Exstream Personal Water Bottle Purifier
Price: $39.95 + $32.95 cartridge refills
Time Until Break Even: 180 days of daily use

If you drink a bottle of water each day (as you should), but you buy bottled water instead of drinking tap water, you can pay for this nifty device in half a year. You can fill it from any tap and the internal filtering device will clean the water for you, eliminating viruses and bacteria. Thus, each day you use this bottle, you pay off a little more.

2. Battery Charger
Sample Model: Rayovac Universal Battery Charger
Price: $17.95
Time Until Break Even: How many kids do you have?

My son has a bevy of toys that just gobble batteries. It seems like every day I’m dropping more and more batteries into these devices. Thankfully, a battery recharger can trim the costs down really quick. Just take your Rayovac AAs, toss them in this, plug it in, and they’re good to go again. It’s absolutely perfect for parents that have children with lots of battery-powered toys.

3. “Smart” Power Strips
Sample Model: SmartStrip LCG4
Price: $34.95
Time Until Break Even: 60 days

If you use a desktop computer at home, it won’t take long until this device is a money saver for you. Simply plug in your main unit into the control outlet and all of your other peripherals (monitor, printer, speakers, etc.) into the other outlets. Whenever you power on your computer, the other devices power on; whenever you power off your computer, the others power off. Even better, it actually functions as a switch, so when your main unit powers off, there is no phantom “standby” electricity being drawn to the other peripherals. Not only will you save money on the powered-down peripherals, but you’ll save money from the lack of phantom charge.

4. Blender
Sample Model: Oster Classic Beehive Blender
Price: $47.99
Time Until Break Even: 6-12 months

A quality blender (like the one above) can save tons of money if you use it regularly. You can switch to grinding your own herbs, spices, coffee beans, and so on. A regular kitchen user can make back the price on herbs alone if they buy fresh herbs and grind them in the blender for long-term storage. Plus it’s invaluable for making drinks at home when you have guests, which ends up being much cheaper than a night out on the town. Get a good one, though, so it will chop and cut what you want.

5. Electricity Usage Monitor
Sample Model: Kill-a-Watt Electricity Usage Monitor
Price: $24.99
Time Until Break Even: 3 years

With this device, you can see how much of a phantom load your powered-down electrical devices are still pulling through the wall outlet. If you discover devices that are pulling a significant load, unplugging them (or using an appropriate device to stop the drain) will save you money over time. This device is also useful for figuring out how much power various home devices are draining and, with some quick calculations, exactly how much it’s costing you.

6. Flash Drive
Sample Model: Kingston Data Traveler 1 GB
Price: $17.95
Time Until Break Even: 1 month

I find countless uses for my flash drive, the best of which is for an emergency backup of key files. A flash drive has saved my cookie during hardware crashes and it has also saved a lot of money in terms of burning CDs for software installation packages off the network. In short, it’s invaluable.

7. High End Solar Calculator
Sample Model: Texas Instruments TI36X
Price: $10.99
Time Until Break Even: 2 years

I like to keep one of these in my pocket for doing calculations at the grocery store. Which package is the better deal per unit? It’s always a good idea to figure this out before blindly making a purchase at the store. Plus, with a solar calculator, you don’t ever have to worry about batteries or anything else – just keep using it.

8. Efficient Power Supply
Sample Model: Antek EA 380
Price: $81.00
Time Until Break Even: 1 year

A high-efficiency power supply not only protects you from electrical faults, it also ensures that your devices drain electricity at the minimum rate, which means your power bills go down. If your home has any sort of questionable power distribution, this device is essential for protecting your electronic equipment, but even if you have normal power, you can save money with this gadget because of the power drain that it reduces.

9. Compact Fluorescent Light Bulbs
Sample Model: GE Soft White Spiral T4
Price: $1.79
Time Until Break Even: 4 months

CFLs can easily save $100 a year, plus they look a lot cooler than ordinary bulbs. The simple fact of the matter is that by merely replacing a regular bulb with a CFL, you’ll save about a dollar per bulb every two months or so.

10. Efficient Shower Heads
Sample Model: Niagra Conservation Earth Massage Showerhead
Price: $15.99
Time Until Break Even: 10 months

High efficiency showerheads save money by reducing the amount of water that needs to flow through your hot water heater. An average American household can save as much as 15,000 gallons of water per year by installing high-efficiency shower heads. Even better: that’s 15,000 gallons of hot water that your heater doesn’t have to heat, cutting down on your energy costs as well.

11. Fuel-Efficient Scooter
Sample Model: 2006 Vespa PX 150
Price: $4,200
Time Until Break Even: 4 years

A high-efficiency scooter is perfect for people who have a relatively short work commute that’s just a bit too far to walk every day. Leave that car in the garage and travel on a scooter. Plus, you can scoot around town and quickly run errands on this thing. Of course, a bicycle is even less expensive, but scooters are much faster and won’t leave you sweaty when you arrive.

12. Solar Outdoor Lighting
Sample Model: Silicon Solar Innovision LED
Price: $12.95
Time Until Break Even: 180 evenings

This is a great choice if you want to light your yard and patio in the evening but don’t want to spend on electricity all the time. Solar powered outdoor lighting will provide adequate lighting for much of the night after recharging themselves during the day. Their design incorporates solar panels, a nice geek factor, and they can provide wonderful low light in the evening, perfect for a nice ambience.

13. Dance Dance Revolution
Sample Model: DDR Extreme 2 (plus peripherals)
Price: $200
Time Until Break Even: 8 months ($25/month gym fees)

If you use the gym for a cardio workout, cancel your gym membership and get a home video game system, DDR, and a good quality dance pad. The game itself provides all the motivation you need, plus you have to be in pretty good shape in order to play the game for extended periods. I lost about 20 pounds playing DDR instead of going to the gym once upon a time.

14. Self-Cleaning Electric Shaver
Sample Model: Braun 8995 360 Complete
Price: $169.13
Time Until Break Even: 8 months of daily shaving

A top-quality self-cleaning rechargeable electric shaver saves significant money for each shaving over disposable razors and shaving cream. Although there are still upkeep costs (recharging, a rare replacement of the blades, and facial wash), the costs are much less than what you’ll incur with shaving cream and blades. Plus, you get the unbridled joy of owning a new gadget.

15. Espresso / Cappuccino Machine
Sample Model: Gaggia Carezza
Price: $200
Time Until Break Even: 80 visits to a coffee shop

Do you stop by Starbucks each day to pick up a fresh cup on your way to work? If you invest in a decent cappuccino / espresso maker, those visits can go right out the door; you can make it at home and it tastes at least as good as the stuff at the shops, especially chain ones like Starbucks where they have the “process” down to an art form. Plus, once you get used to using it, you can experiment a lot with different beans and grindings and make some truly sublime homemade coffees.

16. Programmable Thermostat
Sample Model: Honeywell 5/2 Programmable Thermostat
Price: $39.99
Time Until Break Even: 6 months

If you have central air conditioning, you need programmable thermostats. They provide very precise temperature control and can be programmed to automatically lower your air conditioning and/or heat use while you’re not home. Just program it and forget about it; it will automatically adjust things for you so that you aren’t wasting electricity and money.

17. Coin Sorter
Sample Model: FastSort Electric Coin Sorter
Price: $95.99
Time Until Break Even: 2 years

Most banks will no longer count change for you, but they will accept pre-rolled coins as deposits. CoinStar, on the other hand, will cash out change for you, but they have a 10% surcharge. Why not just sort and roll them yourself? Keep this device on the dresser, dump in your pocket change each night, change the rolls in and out (the device comes with a bunch of coin rolls), and when you go to the bank, take in a bunch of coin rolls and deposit them. Over time, the device pays for itself over the amount you would lose using CoinStar.

18. Efficient Space Heater
Sample Model: Honeywell HZ-315
Price: $19.95
Time Until Break Even: One cold winter

Small, efficient space heaters can save a lot of money because they allow you to not have to spend lots of extra energy keeping some rooms heated (such as the bathroom). Instead, just put in a space heater and turn it on when you take a shower. It’s substantially cheaper than keeping that spare room heated. Plus, you can use them when working in the basement or other rooms that you don’t bother to heat, or in the bedroom at night if you lower the house heat during the nighttime hours.

19. Solar Christmas Lights
Sample Model: Silicon Solar LED Christmas Lights
Price: $59.95
Time Until Break Even: 2 Christmas seasons

Instead of buying strands of electric lights for outdoor Christmas decoration, get a set of solar LED Christmas lights. They eat no electricity as they charge up during the day, come on automatically in the evening, and stay on most of the night. You can just set them up and let them be with no maintenance cost or effort at all. The start-up cost is a bit high, but the cool factor of LED solar Christmas lights, plus the energy savings, quickly makes up for it.

20. Remote Control Power Strips
Sample Model: Lacrosse RS-204
Price: $29.95
Time Until Break Even: 2 years (depending on use)

Quite often, we find ourselves plugging lots of lights and decorations in during the Christmas holidays, and it becomes a hassle to power them all off and on, so we often leave things on more often than we’d like, sometimes even overnight. To solve this problem, install a remote control power strip. This device can be turned on and off by remote control, meaning that you can have all of the cords out of the way and flip the Christmas tree lights on and off with just a button click.

21. High Efficiency Washing Machine
Sample Model: Whirlpool Duet Front-Loading High-Efficiency Washer GHW9150P
Price: $859
Time Until Break Even: 3 years

If you buy a large-load high efficiency front loading washing machine, you’ll do many fewer laundry loads per month and each load will take less water than before. A machine like this can easily save $10 over a regular machine in water usage in a family home per month; even better, a large load machine will save a lot of time. Given the cost of a normal low-end washer, it should only take three years or so for this machine to pay for itself.

22. A Laptop
Sample Model: Dell Inspiron E1505
Price: $819
Time Until Break Even: 1 year

Now that laptops have reached a usability and reliability standard that approximates desktops, it becomes a serious choice whether or not to replace a desktop with a laptop. If you make the leap, you’ll find that the energy savings are tremendous. I often run it from battery at home and charge it using available outlets in other places, such as the local bookstore, meaning I have very little home energy use from the laptop. It won’t take long for this savings to make up for the differences in cost, plus you’ll have all of the laptop portability advantages.

23. TiVo
Sample Model: TiVo Series 2 80 Hour Dual Tuner
Price: $49.99 + $9.95 a month
Time Until Break Even: 6 months

If you have cable and a TiVo, your needs for DVD purchases and rentals will almost disappear simply because of the plethora of programming you’ll be able to watch commercial-free. This will begin to save you money before long, plus it will give you a much greater control over what you watch on television – I skip a lot of programs simply because of the commercials and the inability to pause them to chase my child.

24. A Hybrid Car
Sample Model: Toyota Prius
Price: $22,175
Time Until Break Even: 5 years

If you compare a hybrid side-by-side with a non-hybrid, the hybrid costs more up front. The savings, though, kicks in over the life of the car with much lower fuel costs. Plus, it has a great “geek factor” and it’s a solid environmental decision.

25. A Residential Windmill
Sample Model: Skystream 3.7
Price: $8,500 (including installation)
Time Until Break Even: 8 years

If you want to be “king geek” in your area, few things will top this. $8,500 will get you a windmill on top of your house, which can, by itself, take care of almost all of your home electrical needs. It looks like a high-tech antenna up there, quietly whirring away, using the wind to provide your juice. For an average household, the device will pay for itself in eight years; after that, it’s all gravy. Plus, you’re helping the environment by almost eliminating your load on the power grid.

Sometimes, you can buy gadgets to save money.

The post 25 Gadgets That Actually Save Money appeared first on The Simple Dollar.