How You Can Start Spending Smart

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YARDLEY, Penn. - Everyday spending can make or break your budget. 

That's the word from Greg Karp, author of Living Rich by Spending Smart.

 He spends his entire working life in Yardley, Penn., looking for ways to wipe out wasting money and begin spending smart.

 Click play for more advice not mentioned here, including info on online banking and generic drug prescriptions.

These days, that often means going online for general purchases-- including eyeglasses or contacts.

Go Online for a Better Bottom Line

Karp was wearing a very fashionable and sporty pair of glasses when CBN News interviewed him.

"These are ones that I got myself from," he said. "They're my prescription. I think they look pretty good and they cost $8 plus shipping."

"My other glasses, before I knew about this site, cost $300," Karp added.

He says you shouldn't feel obligated to buy directly from your optometrist.

"There's huge markup from your eye doctor on the frames and the prescription lenses," he said. "By federal law your eye doctor must give you your eyeglass prescription and your contact lens prescription."

"It's almost as if your regular doctor was selling you pills," Karp continued. "You wouldn't buy pills from him, right?"

You can also save big bucks online when it comes to the world of electronics.

Karp showed CBN News a typical HDMI cord used to connect an HDTV to components like a cable box. The cord can cost $75 at an electronics store, he said, but he got his online at for $2.81.

Pull Up the Web Before Pulling Out Your Wallet

There are plenty of ways other than direct purchasing to use the computer to save money.

"Just compare prices online. You have to know what a good price is in order to be a smart consumer," Karp explained. "Look up prices on or all these 'shop-bots' they talk about like and"

Karp also likes Google's shopping section and Consumer Reports online.

"And one other good site is called," he said. "They review a lot of different products. They actually compile reviews there."

Chuck the TV Extras?

When it comes to TV, maybe you can get rid of cable and satellite altogether.

Karp's advice is to look at cable and satellite service as a luxury and rigorously examine what you really use.

"Cut out all those channels and all those tiers that you don't watch very much," he recommended. "Another thing you can do is call your cable company...and try to haggle with them a little bit about the price. They might have special promotions going on."

Many TV shows are also available online.

"You can go to sites like or you can go to any of the major broadcasting network sites and see these shows for free," Karp said.

"A lot of libraries [also] have movies you can rent, and even TV shows," he added.

Shining a Light on Better Bulbs

As you sit in your home watching TV, you want the most economical lighting. Karp recommends fluorescents.

"You can save $30 for each bulb that you replace," he said. "I'd recommend replacing the five most used bulbs in your home with compact fluorescents. And the longevity-- these are guaranteed to last nine years."

Karp also recommends keeping the thermostat in mind.

"Raise that temperature in the summertime to as high as you can stand it and put it as low in the winter as you can stand it. And dress appropriately for the season," he said.

Though Karp is all for going green when it saves you some green, he recommends against it if it costs you.

"Don't spend a lot of money on replacing your windows. That's just terrible advice that you hear everywhere," Karp claimed. "You just won't make up in energy savings what you spend on the replacement windows."

Used Can Be Good Too

When shopping, Karp says people are too hung up on having new items. Though many may be squeamish about buying used, there are great options.

"Go to a high-end consignment shop and just buy something there to get yourself more comfortable with it," he said. "There are tremendous deals to be had. I got a suit for $24.99, and I wear it in TV appearances, all kinds of stuff. It's great!"

But used can hurt you if it's costing you-- like a used car with huge repair costs.

Karp says dump it if "the repair [costs] half or more than the car is worth."

"You can look up how much it's worth on sites like and and," he said.

Karp feels many of us spend too much on cars to begin with.

"We get used to spending $30,000 on a car, but about 7 percent of your gross income, that's what you want to shoot for when you're talking about a car payment," he said.

Karp added that driving the speed limit will save you big gas money, along with striving to constantly make smooth starts and stops.

How Much Home You Can Afford

When it comes to big-ticket items like a home, it's important to figure out how much you can afford.

"About 29 percent [of your gross income] is what you want to shoot for," Karp said.  "And that includes your mortgage principle, interest and insurance."

Your credit rating also becomes crucial when you're looking at these types of purchases.

"So much of your financial life is tied up into that three digit number...If you're over 700, you're doing a pretty good job," Karp explained.  "Your insurance rates might be higher if you have a low credit score, and the interest rates you'll pay on any kind of borrowing will also be higher if you have a low credit score."

Karp said to see your numbers, "The best place to go get your credit report is at It's the only official site to get your credit report."

What Truly Buys Happiness

Karp recommends you think about what truly buys happiness when it comes to everyday spending.

"Academic research shows that we're happier buying things that are experiences rather than material goods," he said.  "Think about it.  On your deathbed, would you rather have bought another Ipod or spent more time with your family and friends?"

 More tips on saving money can be found in Karp's book, Living Rich by Spending Smart.

*Originally broadcast January 5, 2009.

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Paul Strand

Paul Strand

CBN News Washington Sr. Correspondent

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