Save $50 a Day, 2011: Investing and Personal Finance
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Save $50 a Day, 2011: Investing and Personal Finance

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We'll show you how to target mutual fund expenses and trading commissions, make bank fees disappear, pump up your 401(k) to leverage your tax cut and refinance your mortgage to lower your rate.

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Save $50 a Day, 2011: Investing and Personal Finance | Slide 2 of 10

Slash Investing Costs

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Vanguard has made saving on fund fees even easier by lowering the minimum investment for its ultra-low-cost Admiral shares to $10,000 for many index funds. Say you want to put $50,000 into U.S. stocks, the same amount into bonds and $20,000 into emerging-markets stocks. If you invest in funds with the average expense ratio in those categories, you'd pay $1,502 a year in fees.
But if you divide your money among Vanguard Total Stock Market Index (symbol VTSAX), Vanguard Intermediate-Term Bond Index (VBILX) and Vanguard Emerging Markets Stock Index (VEMAX), your annual tab will be just $149.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 3 of 10

Trade for Free

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Brokerage commissions have come down dramatically in recent decades. But with a little planning, you could avoid paying trading costs altogether. If you have at least $25,000 in your brokerage account, Zecco will give you ten free stock trades each month -- saving you up to $100 per month compared with the $10 per trade common among other brokers. Don't have that much invested? Just2Trade's $2.50 stock commissions are rock-bottom.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 4 of 10

Try Munis

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These days many tax-exempt municipal bonds and funds pay close to the yield of comparable taxable bonds. For example, Vanguard's Intermediate Term Bond Index fund (symbol VBIIX) yields 4%, but you could switch to Vanguard's Intermediate Term Tax-Exempt Bond fund (VWITX), which is paying 3.7%. In the 25% tax bracket, you'll make $7 more per $1,000 ($37 versus $30) with the tax-exempt fund.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 5 of 10

Leverage Your Tax Cut

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Most workers will get a 2% pay hike this year, thanks to the temporary payroll-tax holiday that decreases the Social Security rate from 6.2% to 4.2% on up to $106,800 in earnings. Say you are 30 years old and earn $50,000 a year. Your one-year tax cut amounts to $1,000, or about $19 a week. Stash that found money in your 401(k) and it could be worth $16,000 at age 66, assuming an 8% rate of return. Plus, you'll save $250 in taxes if you're in the 25% bracket.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 6 of 10

Sign Up for Automatic Debit

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Automatic debit is probably offered by your credit-card issuer, utility or loan servicer and is easy to sign up for. Use it to pay your credit-card bill, for example, and eliminate late fees that can cost as much as $35 a month. Or sign up for e-bills via your bank's online bill pay.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 7 of 10

Transfer Your Balance

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Interest-free credit-card debt is still around thanks to 0% balance-transfer deals. Americans owe an average of $14,333 per household in card debt.

But you can transfer your balance to, for example, the Citi Platinum Select MasterCard with its 21-month, 0% balance-transfer offer. If your balance is $5,000 and you pay it off in a year, you'll save $484 in interest, less a $150 transfer fee, assuming you're dumping an 18% credit card.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 8 of 10

Avoid ATM Fees

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Surcharge-free ATM withdrawals are worth investigating, given that the average cost of an out-of-network withdrawal is now $3.74. Avoid the fee by choosing a checking account such as PNC's Performance Checking, which reimburses all ATM fees, or the free online Electric Orange checking account at ING Direct, which is a member of the surcharge-free Allpoint ATM network.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 9 of 10

Refinance Your Mortgage

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Slashing your rate from 6.5% to 5% on a 30-year loan will save you 15% on your monthly payment. On a $200,000 mortgage, that translates into a savings of almost $190 per month.
If you're refinancing, you can reap a one-time savings by finding cheaper title insurance. For example, Entitle Direct charges lower premiums because it eliminates the middleman. The company currently operates in 32 states. To get a free rate quote, visit www.entitledirect.com.
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Save $50 a Day, 2011: Investing and Personal Finance | Slide 10 of 10

MORE WAYS TO SAVE

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SLIDE SHOW: Save $50 a Day on Food and Medicine

SLIDE SHOW: Save $50 a Day on Shopping and Entertainment

SLIDE SHOW: Save $50 a Day on Travel & Transportation

SLIDE SHOW: Save $50 a Day on Utilities and Home Improvement

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