Clark Howard's Tips

January 19, 2007

Money Magazine has a way for you to save $400,000!

You probably didn't know you had that much money, but you do. Money says the No. 1 thing you can do is avoid buying fancy cars. Over a lifetime, buying average cars instead of fancy cars would save you $180,000.

An average car would be a Honda Accord LS as opposed to an Acura TSX, for example. And buying used will always save you more dough down the road than buying new.

What else? Sending your child to a state school rather than a private school will free up an extra $160,000 for your retirement. If you're like Clark and have three kids, that's half a million dollars right there. The average tuition at a state school is $12,000, whereas private schools cost an average of $30,000 a year.

Another idea is to suggest that your child helps pay for his or her school. That may not be possible for your child, but students do much better when they have an investment in something.

The third tenet from Money is to stop taking so many vacations. That one is hard for Clark to swallow because he loves traveling. But the magazine says that if you take $1,000 a year you'd normally spend on a vacation and put it in a Roth IRA instead, you'll have an extra $120,000 at the time of retirement.

So try those things and see how much you save!

Consumer advice courtesy of