Sweat the BIG stuff

Choose your cliché: "Penny-wise, pound-foolish," "A penny saved is a penny earned." Whichever you favor, you're probably spending time counting pennies when you should be thumbing dollars.

Are you the sort of consumer who checks GasBuddy.com to save a nickel on a gallon of gas and then blindly renews the auto insurance every year without shopping around? Are you the working mother who uses dryer balls to save on fabric softener, but buys a new washer and dryer based on price and color, not reliability?

Consumers act this way out of habit, said Paco Underhill, CEO of Envirosell and author of "Why We Buy." The penny-wise savings habits are taught to us as kids -- coupon clipping, using Hamburger Helper to stretch meals, he said. But pound-wise habits are often learned on our own as adults. "We make mistakes and go back to our old habits."

It's time to break old habits in the new year and save some bucks -- BIG bucks. Here are six tips to get you off to a good start.

Insurance

Many of us buy auto and homeowner's insurance and then renew annually with the same company. That's a mistake. Consumer Reports recommends shopping around every two years. The price disparity between high and low bids has never been greater, said Jim Cox, a St. Paul independent insurance agent for 29 years. Part of the new disparity is the result of insurance companies using credit scores to calculate rates, he said. Comparison-shop by calling independent agents with your declarations page in front of you, listing your coverages.

Ask about volume discounts for additional vehicles and combining auto and homeowner's. But don't automatically choose the low bid. Know how different insurance companies compare for promptness of payment and successful claim payment. To see how insurance companies compare, go to the March 2006 issue of Consumer Reports for auto insurance and the summer/fall 2006 issue of Twin Cities Consumers' Checkbook for homeowner's (see below for contact info).

If a broken washing machine or oven puts you in a panic, the answer isn't to buy extended warranties or repair plans offered by pushy retail salespeople or utilities, it's to buy a reliable appliance in the first place. Rather than buying an appliance based on appearance or features, check its reliability with Consumer Reports. Appliances rarely fail in the first three years (the typical extended warranty period). If you really want an extended warranty, read it for exclusions before you buy. Some repairs may be subject to a $50 deductible (common with cell-phone warranties) and often exclude damage (laptops that are dropped or spilled upon).

Used automobiles

Buying a used car can be much cheaper if buyers do two things: Have the car inspected by a trusted mechanic, even if it's a certified used car, said Tom Magliozzi of National Public Radio's "Car Talk." Also, check the April issue of Consumer Reports for "used cars to avoid."

Auto, computer, appliance and other major repairs

You can pay $75 or $240 to add 512 megabytes of memory to a computer with a Pentium IV processor; $140 or $340 to replace CV boots on a Honda Civic. Face it, when the computer isn't booting and the car isn't braking, shopping around isn't Job One. There's a faster, easier way with Checkbook. The nonprofit publishes invaluable lists of the best Twin Cities auto mechanics, dentists, roofers, landscapers and painters. The magazine compares not only quality but price, so you don't have to take a clueless stab in yellow-page directories. When you need a mechanic ASAP, go to Checkbook.org and download the article for $10 or call 651-646-2057 for back issues. Services are rated by local subscribers.

Get a better credit card rate if you're carrying a balance. It's as simple as asking your credit card company. You have the most bargaining power if you've made on-time payments and aren't late with other creditors. (They will check your credit while you're on hold.) It isn't unusual to be able to lower your rate by six percentage points, said Gerri Detweiler, a credit adviser for Credit.com. Ask for the account retention department and specify if you want a lower fixed rate or a temporary teaser rate. Consumers with good credit should be able to get fixed interest rates of 10 percent or less, she said.

If transferring a balance to zero percent for six months or 4.99 until it's paid off, look for a $50 or $75 fee cap. Most now charge 3 percent of the balance transfer amount. If you transferred $5,000, the 3 percent fee would cost you $150 plus the monthly interest. Ideally, don't do a balance transfer on a card with an existing balance or make additional purchases after you do the balance transfer. Then your account will have a low interest rate for the balance transfer and a higher interest rate for the old balance and any new purchases. The credit card company will apply your payments to the lower interest rate first.

Airfare

Flying on Northwest for the frequent-flier miles when other airlines are charging hundreds of dollars less is shortsighted. Try Sun Country, AirTran, Frontier and other options. True, the hassle of two or more connections can make a difference, but Sun Country flies direct to nearly all of its recently expanded routes. A person flying to Tucson, Ariz., for a winter vacation, for example, would spend $245 to $330 nonstop on Sun Country, $220 to $330 on Frontier with one stop in Denver, and $400 to $450 nonstop on Northwest.

Try Sidestep.com, Fare Compare.com, Hotwire.com or CheapSeats.com for comparing fares. Also, sign up for low-fare alerts on Travelocity or Expedia. They will send you an e-mail when fares go below a threshold you have set.