By Christina Couch • Bankrate.com

The expression "a penny saved is a penny earned" doesn't cut it these days. But saving a few dollars here and there can add up, particularly if you park the money in a high-interest-bearing savings account or, better yet, a tax-favored vehicle such as a 529 plan or an IRA containing a mix of investments that offer higher returns over the long run.

OK, so 10 percent annual returns from the stock market may seem farfetched after the recent market mayhem. But we contend that it's not unreasonable to expect 7 percent annualized returns from a conservative blend of bonds and stocks over a period of 15 years. These are the assumptions we used below to calculate how the few bucks you squirrel away today can turn into big-time savings later.

Form a cooking co-op
Sure, cooking is cheaper than eating out, but a daily home-cooked meal simply isn't an option for many full-time working parents. Ginny Bowie, vice president of a Richmond, Va.-based financial securities firm and mother of three, solved her scheduling and budgeting dilemma in one swoop by forming a cooking co-op.

"Every Tuesday night, I cook dinner for three families besides my own, which is about 18 to 20 people, and deliver it to their door," Bowie says. "Monday, Wednesday and Thursday, the three other families cook for me."

Bowie's Web site and DVD, "If it's Tuesday ... it's my night 2 cook," contain recipes and tips for starting a co-op. She says cooking in bulk has cut her grocery bill in half and practically eliminated her need for eating out.

What it's worth
The average household spent $6,133 per year on food -- $3,465 on groceries and $2,668 on meals away from the home -- in 2007, the most recent year for which data are available from the U.S. Bureau of Labor Statistics. We suspect food prices soared in 2008, but let's use these numbers anyway. Assuming that a co-op could reduce the grocery bill by half and lower restaurant expenses by, say, 60 percent (factoring in the occasional meal out), families could save $3,333 per year by going co-op.

Here's the payoff for switching meal plans:

• A one-time deposit of $3,333 grows to $9,196 in 15 years.
• Annual deposits of $3,333 add up to $83,755.

Find free entertainment
Between nights out at rock concerts, opera and theater performances, some Americans spend more on entertainment than on groceries and gasoline combined. To cut down entertainment expenses, Jaclyn Young, a Washington, D.C.-based actress, hunts for free events in her area and volunteers as an usher for live theater.

"I see at least two plays every weekend, and since tickets are $18 to $45 apiece, that's a lot of money if I wasn't ushering," Young says. "I volunteer at 15 theaters and save probably $160 a month doing it."

What it's worth
We don't recommend forgoing all cultural events, but consumers who opt for free or low-cost concerts, lectures, outdoor movies and art shows even one night per weekend can easily reduce their entertainment budget by $50 to $100 per month. For purposes of our calculation, let's split the difference and assume savings of $75 a month or $900 a year for 15 years.

• A one-time deposit of $900 grows to $2,483.
• Annual deposits of $900 add up to $22,616.

Use the public library
Home entertainment costs can be considerable if you add up cable television, satellite radio, video games and movie rentals. Young recommends getting familiar with the public library. In addition to carrying books, magazines, audiobooks, films and CDs, libraries frequently offer free children's events, language programs, financial literacy workshops and performing arts events to cut your budget down further. If the library in your area is scant on
9 cash-saving strategies that pay big bucks

What it's worth
According to the School Library Journal, the world's largest book review publication, the average cost of a new hardcover book is $26.43 ($18.02 for paperbacks). Families that buy one book per month and rent two to three movies at $4 to $5 a pop can easily run up a $30-per-month tab or $360 annually.
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• A one-time deposit of $360 grows to nearly $993.
• Annual deposits of $360 add up to $9,046 in 15 years.

Bargain shop
When buying luxury items, save some cash doing it. For James Beveridge, a Chicago-based financial analyst, that means using bartering sites such as Craigslist to find used goods and seeking out promotional codes for discounts on all other online purchases.

"I use sites like Chainlove.com (an online bike supply store) a lot that only list one item at a time, but for 50 (percent) to 90 percent off," Beveridge says. "If I can't find something at a one-deal-at-a-time shop, I comparison shop at places like Bizrate.com and Pricegrabber.com to see if I can get a discount."

What it's worth
For Beveridge, it's worth a lot. Making 75 percent of all purchases through online discounts, Beveridge estimates that he saves $40 a month simply by shopping around for deals. Because you can get everything from pencils to plane tickets discounted online, price-comparing families could shave $50 to $200 off their spending budgets each month.

• A one-time deposit of $600 to $2,400 amounts to $1,655 to $6,622, respectively.
• Annual deposits of these amounts add up to $15,077 to $60,310, respectively.

Communicate cheaply
Madison DuPaix, a Madison, Wis., mother of three and author of the finance blog My Dollar Plan, always looks for ways to maximize savings, such as cutting the phone bill. After switching from a local phone service to Vonage last year, DuPaix pocketed an extra $240, or $20 per month. Thanks to broadband Internet phone systems like Vonage and Skype -- a service that allows free member-to-member calls and long distance for a penny per minute -- thrifty consumers can all but forget about footing landline bills.

What it's worth
Households that eliminate a landline and stick with cell phone plans can cut $30 per month out of their utilities budget, and those who trade cell phones for broadband phone systems can save even more. Shove $40 per month, or $480 at the end of the year, in a tax-favored savings plan for 15 years, and here's what happens:

• A one-time deposit of $480 grows to $1,324.
• Annual deposits of $480 add up to $12,062.

Weatherize the house
Your kid's college fund could be flying out the window, says Jonni McCoy, author of "Miserly Moms: Living Well on Less in a Tough Economy."

"Consumers save 3 percent on their heating bill for every degree they turn down the thermostat," McCoy says. "They also lose money by not replacing the weather stripping around their windows, washing clothes in hot water and not insulating pipes around their water heater."

What it's worth
It depends on location. In states with moderate weather year round, tightening the insulation screws may have little effect. For those living in more extreme climates, simple steps like installing heating and air-conditioning timers can save hundreds. According to a study by the Energy Information Administration -- the U.S. government's official source for energy statistics -- the average household spent $1,137 last winter in heat alone. Lowering the thermostat just 5 degrees in winter means reducing costs by 15 percent, or saving $170.55 after one season.

• A one-time deposit of $170.55 grows to $471.
• Annual deposits add up to $4,286 in 15 years.resources, check out what's on campus at the nearest college or university.

Raise the deductibles
The average individual annually spends $4,704 on health insurance premiums, according to the Kaiser Foundation; $1,954 is spent on car insurance premiums, according to Ratewatch auto insurance; and $804 is spent on homeowners insurance, reports the Insurance Information Institute. That's $621.83 per month on insurance premiums alone. McCoy says that smart spenders can sidestep some of those premiums by raising their deductibles.
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"How much you save is going to vary from policy to policy," she says, "but it does pay to go back and see where you can trim some fat."

McCoy adds that consumers can also save cash by purchasing all insurance policies through one provider.

What it's worth
According to Consumerreports.org, raising your homeowners insurance deductible from $250 to $1,000 can save you a sweet 25 percent. That's $201 alone. Assuming that raising your deductible could lower your other two insurance bills by a modest 10 percent, consumers can save $866.80 per year on average.

• A one-time deposit of $866.80 grows to $2,392.
• Annual deposits add up to $21,782 in 15 years.

Time the vacations
For Leah McCombe, a New York City-based art director, saving money means scouting hot vacation deals.

"My boyfriend and I just got back from Nicaragua, and the whole trip -- airfare and tours -- only cost us $500 each," McCombe says. "That's what happens when you vacation somewhere cheap in the off-season."

On top of saving on airfare, those who leave their hometown when nobody else does can also save anywhere from 20 percent to 50 percent off hotels and tourist activities. Combine that savings with discounts from online promotional codes, and consumers can travel much cheaper this year.

What it's worth
A study conducted by Visa shows that the average consumer plans to blow $1,654 per person on their summer vacation. Flip that vacation from summer to winter, factor one-fourth off hotel, airfare and entertainment, and that $1,654 drops down to a $1,241 vacation budget for a $413 savings.

• A one-time deposit of $413 grows to $1,139.
• Annual deposits of $413 add up to $10,378.

Negotiate
The art of haggling is alive and well. DuPaix, a staunch advocate of negotiating for good bargains, says she's gotten breaks on everything from plumbing to preschool simply by asking.

"It especially works if it's a local vendor that operates on reputation or you've been a loyal customer," says DuPaix. "Several years ago, we missed two (credit card) payments and we called and said, 'Hey, we've been great customers. Would you be willing to waive that fee?' Both times they did."

What it's worth
You can't put a number on this one. DuPaix saves an extra $360 per year on preschool bills, but amateur hagglers may not be so lucky. While there's no guarantee that haggling will pay off, as DuPaix says, "Why not? It couldn't hurt."

source: Bank Rate