10 Ways to Cut Expenses

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!

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.

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.

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!

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.

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.

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!

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.

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.

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.