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Savings Challenge

10 Ways to Cut Expenses

Trimming your everyday budget can add up to a sizable savings

1. Lunches Out

Brown-bag your lunch every day at work and you could easily save $25 per week. That's a savings of about $1,300 per year, or more than $50,000 over a 40-year career!

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2. Premium Gasoline

Most car experts agree you're wasting your money by using a higher grade of gas than the manufacturer recommends. Premium grades cost about 20 cents to 40 cents more per gallon than regular unleaded. You could save up to $5 per week on filling up, or more than $250 savings a year if you fill up once a week.

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3. Books, Magazines, DVDs and More

The average American household spends about $200 per year on books alone (U.S. Census Bureau), most of which could be borrowed for free from any of the nation's 17,000 public libraries.

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4. Walk to Work

If you live close enough to walk to work, you'll not only get free exercise, but also save a tremendous amount of money. Based on AAA data, the typical U.S. work commute by car costs about $4,000 per year. If you were able to invest that at a 5 percent rate of return, by the end of a 40-year career you'd have a retirement nest egg of $535,519.01 — and a terrific pair of legs!

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5. Skip the Convenience Store

I recently compared prices on 10 common grocery items at a convenience store and at the supermarket right next door. The supermarket came in a whopping 45 percent cheaper on the exact same items! That's saving more than $2,300 per year if you spend at least $100 on groceries each week.

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6. Tap Water for Me, Please

Restaurants and fast-food carry-outs mark up their beverages — especially alcohol — far more than their food. That $1.75 soda may not seem like a lot, but based on U.S. Census Bureau data, the average family of four could save about $800 per year by drinking tap water when they dine out.

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7. Review Your Insurance

Before you renew your insurance policies, review them and ask your agent about ways to reduce costs. My agent told me we qualified for a "good driver" discount and that it didn't make financial sense to carry collision or comprehensive coverage on our aged vehicle. We lowered our annual premiums by nearly $350!

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8. Pay Down Your Mortgage

According to the website mortgagecalculator.org, paying just $100 extra every month toward the principal of the average 30-year mortgage will allow you to pay it off in only 24 years and save you tens of thousands of dollars in interest.

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9. Money Down the Drain

The Environmental Protection Agency says that the average U.S. home wastes about 10,000 gallons of water every year because of leaks. Replacing a single leaky toilet with an efficient model that meets EPA's "WaterSense" standard could save a family of four approximately $2,000 in water and wastewater bills over the lifetime of the toilet.

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10. Break a Truly Bad Habit

There are a lot of health reasons to give up bad habits like smoking. But don't overlook the financial incentives. Buying a single pack of cigarettes per day will cost you on average about $2,000 a year or, say, $100,000 over 50 years of smoking.

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