If you are a regular reader of this column, you probably already know how I feel about all those personal finance gurus who suggest that a penny-pinching savings of a few bucks here and a few bucks there, depriving yourself of the little lattes and sundry other small joys of life, is the best way to riches. I agree that it’s one way — for sure, those $3.95 expenses here and there certainly add up.

However, I also see how people overspend big time on their homes, mortgages and other big-ticket items on a daily basis — trimming your expenses on one of these big things can be the equivalent of a lifetime’s worth of lattes.

Plus, that scarcity mindset — i.e., you work so hard and can’t buy a coffee here and there — is both demoralizing and difficult for most people to incorporate into lasting habits.

Book Review
Title: "Save Big: Cut Your Top 5 Costs and Save Thousands!"
Author: Elisabeth Leamy
Publisher: Wiley, 2009; 338 pages; $24.95

If you are a regular reader of this column, you probably already know how I feel about all those personal finance gurus who suggest that a penny-pinching savings of a few bucks here and a few bucks there, depriving yourself of the little lattes and sundry other small joys of life, is the best way to riches. I agree that it’s one way — for sure, those $3.95 expenses here and there certainly add up.

However, I also see how people overspend big time on their homes, mortgages and other big-ticket items on a daily basis — trimming your expenses on one of these big things can be the equivalent of a lifetime’s worth of lattes.

Plus, that scarcity mindset — i.e., you work so hard and can’t buy a coffee here and there — is both demoralizing and difficult for most people to incorporate into lasting habits.

So, my pump was already primed favorably when I got my hands on the latest book from "Good Morning America" consumer finance correspondent Elisabeth Leamy, "Save Big: Cut Your Top 5 Costs and Save Thousands!" A big book with a big bang, "Save Big" focuses on helping readers cut big chunks out of their monthly budgets by focusing on only five expenses, in line with Leamy’s philosophy that "it’s better to save a lot of money on a few things rather than a little money on a bunch of things."

Leamy starts with the largest of most households’ expenses: housing. And she sure doesn’t dilly-dally in getting to the point. The first words you see on the first page of the first chapter are: "Buy a House ASAP." From there, Leamy weaves together proof points for her theory that smart homeownership is a money-saving strategy that allows owners to shelter both their money and their family in one fell swoop, especially given that housing is a virtually inescapable expense.

If you have to pay for housing, Leamy goes on, you might as well pay fixed payments toward something you own and that will go up in value, rather than pay ever-increasing rent payments to a landlord.

While Leamy’s housing argument probably overrelies on appreciation and oversimplifies the analysis relevant to housing consumers in markets where buying any home is dramatically more expensive than renting, her basic arguments are valid for most Americans, and her timing strategies and exceptions are valid for people who owe significant debt, are not able to make a geographic commitment or are otherwise not financially ready to buy are sensible and clear.

The next few chapters of the "Housing" section deal with: how much to spend on a home (Leamy espouses using downpayment and being conservative about purchase price to make your mortgage equal your rent, which may be unrealistic for urban or large-market buyers), basic homebuying education, finding the right mortgage and the right real estate and mortgage professionals, cutting mortgage costs and property taxes, and paying your mortgage off early — any or all of which pose the potential for the homeowner to save thousands of dollars.

The second part of "Save Big" is devoted to money-saving strategies around cars, ranging widely from buying decisions (nothing new here — buy used, not new; don’t buy every couple of years, etc.) to using and negotiating for low-interest, non-dealer financing, to shopping for the best deal on auto insurance and maintaining your car to make it last.

"Save Big, Part 3" is all about credit — one of the things consumers least think about when determining how to cut expenses. Leamy provides powerful examples of how increasing your credit score can save you thousands of dollars in interest, then coaches readers through a primer on credit scores and how they are calculated; how they can protect and improve their credit scores in both the short and long term; and how to reduce or eliminate debt.

Leamy concludes "Save Big" with sections on saving on groceries — really, on all retail purchases — and on health care, including how to choose an insurance plan and even how to schedule appointments to make the most of your health benefits.

"Save Big" is like one of those "Hits from the ’80s" CD sets; it contains tons of material that you’ve probably heard in a scattershot fashion before, but is great to have all in one place. "Save Big" would make a great holiday gift for yourself if saving money is on your list of New Year’s resolutions for 2011.

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