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Smart Buying

Don't Waste Your Money: The Hype Got in the Way

You had good intentions.

TIPS 12-21

Piling on to Groupon

I used to scoff at people who bought "bargains" they didn't need because the item was on sale. But along came Groupon, LivingSocial, Yipit and Bloomspot -- and a slew of others e-mailing "Huge sale!" notices to my in-box. I snatched up a 40%-off coupon for an elegant dinner, a bargain on a manicure and no-occasion gifts for my nieces and nephew, and I pined after the $120 surfing lessons on sale for $65. I'm now spending at least $250 annually on "sale" items I'd never otherwise buy.

No matter how much it's marked down, it's not a bargain if you normally wouldn't buy it. -- Kathy M. Kristof

Unrewarding cards

Airline-branded cards sport annual fees of $60 and up and, worse, tether you to an airline that may not offer the cheapest fares. Unless you fly enough to qualify for elite status on one airline, ditch the affinity card and replace it with one that lets you accumulate and redeem points on any airline. Our top picks: the no-fee Simmons First Visa Platinum Rewards card and the PenFed Premium Travel Rewards American Express card.

Twitchy technology trigger finger

For a perfect example of how much "early adopter syndrome" can ding your wallet, consider Apple's iPhone. The first iPhone cost $500 in 2007. Now you can get the third generation for a mere $50, or even a new, fourth-generation iPhone for $200 (if you sign up for a two-year contract with AT&T or Verizon). And the second-generation iPad, which is slimmer, faster and equipped with two cameras, came out 11 months after the first iteration but costs the same. The value-to-price proposition improves over time because new products have more features, says John Biggs, editor in chief of the technology blog Crunch-Gear. Biggs says he rarely recommends the first-generation model of single-purpose devices, such as iPads, iPods and Kindles. Laptops and cameras don't suffer from early-adopter syndrome because they have undergone more upgrades and major glitches have been fixed.

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Rental car hard sell

Nobody should pay retail for rentals. Use Priceline to bid on a car from the five largest rental companies and you could save up to 40%. The trade-offs: You don't know which company you're booking with, and if your bid is accepted, you pay upfront and can't get a refund. Hotwire also plays rental roulette, but instead of bidding, the site shows you the lowest rate available. Don't give back your hard-won discount by buying rental add-ons when you pick up your ride. The most common pitch is for a CDW, or collision damage waiver (also called an LDW, or loss damage waiver), which can cost up to $20 per day. If the car is for personal use and you have collision coverage on your auto policy, you're covered. (Your credit card may pick up the deductible -- or become your primary coverage if you don't have any other insurance.) GPS runs an extra $10 to $12 per day. Bring your own. And think twice about paying for a full tank of gas ahead of time. You can fill up cheaper yourself, and you may not use a full tank anyway.

Credit anxiety

Don't be suckered by pitches to buy credit-monitoring and protection services. The credit bureaus charge $15 to $17 a month to track your credit files -- or at least $180 annually. But you can get a report from each of the three bureaus -- Equifax, Experian and Trans-Union -- free every year at AnnualCreditReport.com. Stagger your visits to the site so that you get a report from one of the bureaus about every four months. You'll keep up with any changes without paying the fees.

A home gym that's gathering dust

You bought into the promise of getting fit from the comfort of home, but now you use your home gym equipment to hang up shirts. We can't motivate you to keep exercising, but we have tips on how to cut the cost of the equipment: Go online to Craigslist, eBay or your local listserv, where you will see scads of ads for all types of machines -- treadmills, rowers, exercise bikes and elliptical machines, all for hundreds of dollars less than their original prices. We recently found a NordicTrack Skier for $80 (the Classic model retails for $999) on Craigslist, a Gold's Gym XR45 home gym for $175 (it retails for $257) on eBay, and a Brookstone Mini Exercise Bike for $50 (retail price: $100) on a local listserv.

Pricey life insurance

You don't need mortgage insurance or credit life insurance (at $5 to $7 per year for $1,000 in benefits) if you qualify for a regular life insurance policy. That gives your heirs the flexibility to use the money for their most important needs rather than being forced to use the cash to pay off a low-rate loan. Even if you have a traditional term life policy, you could save money by switching to a new policy. Term rates have plummeted over the past decade, and if you're healthy, you could pay less for a new policy even though you're older. Get price quotes at AccuQuote.com and Life Quotes.com.

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Warranties you don't need

Appliance and electronics salespeople will sell you on a product's merits and, after you commit, badmouth it so you'll also buy a service contract. Don't bite. Typically you'll pay 10% to 20% beyond the product's price to extend a one-year manufacturer's warranty through the fifth year of ownership. For example, the extended warranty on a $600 HDTV at Best Buy costs $130. But half of what you shell out typically goes to the retailer as pure profit. Most major appliances don't break down within the covered period (among the exceptions are refrigerators with icemakers, electric wall ovens and dishwashers) and, when they do, the cost of repair roughly equals the cost of the extended warranty, according to a survey by Consumer Reports. Plus, you'll get the best service from an independent provider that you pay directly. Some credit card issuers will extend the manufacturer's warranty by a year.

College money down the drain

Contrary to what your almost-freshman tells you, college life does not require a $35 Brita water pitcher. Nor must you spring for the $100-plus mini fridge, the sole purpose of which will be to store the Brita water pitcher (except when it will be used to chill the vodka). Three-meal-a-day plan? Assume your child will skip breakfast and go with the two-meal plan or one that allows a certain number of meals per month; you could save as much as $200. If you already have family health insurance, you don't need to spend $600 or so on student health insurance. Some schools still offer laundry service, for about $700 a year. Hand your kid a laundry bag and a roll of quarters. -- Jane Bennett Clark

Gourmet and organic groceries

At upscale supermarkets, you pay extra for ambience. To see how much, we shopped for the same grocery cart of food at Whole Foods and Trader Joe's. Our basket included one gallon of milk, a rib-eye steak, extra-virgin olive oil, blueberries, cage-free eggs, a pineapple, Parmigiano Reggiano cheese, hot dogs, a baguette and vanilla ice cream. At Whole Foods, the total came to $67.60; at Trader Joe's, the bill was $52.63 -- some 22% less. Also, before you pay more for organic produce, consult the Environmental Working Group's list of the Dirty Dozen and Clean 15 as a guide to which fruits and vegetables tend to contain worrisome levels of pesticides, and which don't. Topping the group's clean list are onions, avocados, sweet corn and pineapple. On the dirty list: celery, peaches, strawberries and apples.

See more ways to stop wasting your money.