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Saving tips: Buy smaller cars, use community banks, says notorious cheapskate

Among advice-givers who talk about smart spending, Clark Howard is perhaps the dean.

Howard relays encyclopedic knowledge of money and consumer issues on his national radio call-in show and on television's HLN, formerly CNN Headline News. Many money gurus will talk about investing and other broad money topics, but Howard is different because he gets into the nitty-gritty of everyday spending — an area on which most finance experts don't dare to tread.

Howard is equally comfortable talking about cellphone plans, 401(k) plans and travel plans. Since 1987, he has been doling out money advice and naming products and brands he thinks are superior, along with those he thinks stink. He accepts no endorsements, although he does have advertisements on his website and radio program.

Howard's breadth of knowledge is featured in his new book — his ninth — "Clark Howard's Living Large in Lean Times."

Undeniably affable and enthusiastic, this self-proclaimed cheapskate from Atlanta said this book is different than his others because of the dour economic climate. He didn't have to waste words justifying to readers why it's important to spend money carefully. He could just dive right into the tips. "In the past, people thought I was kooky or cute about being so cheap," he said. "Now, it's suddenly hip to be that way."

Here's a sampling of his advice topics from the book.

CARS: Vehicle buying is the No. 1 spending weakness for today's consumer, Howard said. "People buy cars on emotion," he said. "They buy in a day, and they're stuck with consequences for four to seven years." Most consumers do car-shopping backward, he said. They go shopping for a car and then figure out how to pay for it. He suggests first thinking about how much you'll spend, doing some research with Consumer Reports and getting prequalified for a loan before you ever step foot on a dealer lot and become susceptible to new-car fever. "I'd like to get people to separate themselves from their emotional side and first come up with a realistic price target," he said. "They need to turn the order on its head and make it a methodical process."

He recommends never financing for more than 42 months. If you can't afford that, you should buy a cheaper car, he says. He mentions carsdirect.com and zag.com as places to get price quotes for vehicles without going through the "grind" negotiations at a dealership.

PHONES: Howard likes the idea of cutting your landline phone service and using cellphones, especially cheaper no-contract cellphones. He says he recently switched from a big wireless phone company to Straight Talk, Walmart's wireless service that offers unlimited calling, texting and data for $45 per month. Some other major carriers charge well over $100 per month for those services and would not include unlimited data. Straight Talk service piggybacks on the calling networks of existing wireless carriers.

BANKING: Howard regularly urges people to think twice about doing business with what he calls "giant, monster megabanks." Instead he likes small banks and especially consumer-friendly credit unions, known for lower borrowing rates and superior customer service. The potential trade-off is convenience. Credit unions don't have their own extensive branch and ATM networks. Websites such as http:creditunion.coop/ and http:www.findacreditunion.com/ can help you find a credit union you qualify for.

EXTENDED WARRANTIES: Howard urges consumers to skip extended warranties that are offered on so many appliances and electronics today because they are too expensive for what they cover. Many credit card companies will extend the manufacturer warranty for free if you use their card for the purchase, he notes. An exception to his rule on warranties is for cars. Howard said he is neutral on car warranties for people who could not afford a large auto-repair bill. But be sure to buy the warranty from the manufacturer, not a third party, he said.

DEBIT CARDS: Some of Howard's advice doesn't jibe with that of other money experts. An example is his unveiled hatred for debit cards. Some people like them because debit cards help consumers avoid the hefty finance charges of credit cards. But Howard regularly calls debit cards "piece-of-trash fake Visa and fake MasterCards," referring to the types of debit cards that feature credit card logos and can be used with a signature. The reason is security, he said. A thief who steals your debit card can empty your bank account, and you might have to fight with your bank to get money back. With credit cards, you simply report the fraud and get a new card. For those who don't like credit cards, cash still works great, he said.

WAREHOUSE CLUBS: Howard is fond of deals offered at warehouse clubs. He likes it even better when there's a markdown at one of those clubs. You can identify clearance items by watching the format of prices. At Sam's Club, look for anything that ends in a penny, such as $24.41, or anything marked with a "C" for clearance. At Costco, look for prices that end in 97 cents. BJ's Wholesale clearly labels its markdowns, he said.

Howard frequently reminds radio listeners that they can get his books at the library for free. His radio show, "The Clark Howard Show," is syndicated nationally. Podcasts of the radio show are available for free on his website,www.clarkhoward.com, or through podcast software such as iTunes. The TV show runs on cable station HLN.

Howard said he thinks Americans' focus on smarter spending is here to stay, thanks to the brutal recession and its aftermath. "It will never be like it was. This is our Great Depression-lite," he said. "The whole shop-till-you-drop thing is over."

Gregory Karp, the author of "Living Rich by Spending Smart," writes for the Chicago Tribune.