Life is precious -- and it’s way too short to spend searching for that Val-Pak coupon for 20% off a $2.95 burger. (That's a whopping $0.60 savings, by the way.) If you want to bank some serious coin, one simple axiom will serve you better than thousands of Sunday-paper advertising circulars: Sweat the big stuff.

Think about it: Which would you rather pocket, 20% off a $50 purchase or 20% off a $500 one? Exactly. Yet too many people wear themselves out chasing down pocket change and let the big-ticket stuff slide.

We suggest that you start with the big stuff and work your way down your spending list as time and energy allow. That's right: Enjoy your morning latte. Go ahead and order dessert. It's time to bring sanity to the pursuit of savings.

Save with more precision
While every dollar is an investment, not every investment has equal potential. Italian economist Vilfredo Pareto knew this, and his 80/20 Pareto Principle suggests that 80% of life's effects come from 20% of its causes. So 20% of your computer's programs consume 80% of its memory; 20% of salespeople generate 80% of sales; 20% of citizens earn 80% of the country's income.

The Motley Fool spin on the 80/20 principle is this: 80% of money-saving results can be achieved by tackling just 20% of your expenditures. That's good news for those who don't relish managing their money 24-7. It means concentrating your money-saving efforts on the uber-budget categories -- your mortgage, insurance, travel, holiday spending, investments, and, of course, anything with a three- or four-digit price tag -- and making sure your biggest assets are working as hard as they can for you.

Here's how to be an efficient tightwad (and we mean that in the best possible way):

  • Slash your car insurance costs by 15% or more simply by raising your deductible from $500 to $1,000. (That's $100 savings on your premium if you pay $700 annually to cover your wheels.)
  • Stop settling for anemic checking-account interest rates by moving your money to a high-yield savings account. Instead of earning $15 a year on $5,000 sitting in your checking account earning 0.26% APY, pocket $150 annually at a high-yield rate.
  • Free up $200 extra each month to invest (or pay off your debt) by adjusting your withholding now instead of getting a $2,500 tax refund (last year's average) from the IRS.
  • Stop paying three times what you should on mutual fund management fees (e.g. 0.5% on your S&P 500 tracker instead of 0.18%) by taking the time to compare your investments with like ones at a low-cost fund provider. Spending your lunch hour doing the research is worth it: A $10,000 investment (earning 8% annualized returns) earns about $622 more in the low-cost fund after 10 years -- $8,165 more after 30 years.

That's thousands of dollars in savings from four targeted money moves, which leaves plenty more time to tackle some other expenditures hiding out in your budget.

Target the small stuff that's actually big stuff
Things like cable TV, brokerage account fees, and even those daily lattes can easily turn into "big stuff" when you're not looking. Let's light up our spending scoreboard and take a look:

"Big Stuff" in Disguise

Cost Per Month

Cost Per Year

Cost Over 5 Years

Cable TV

$150 for premium service



Online "bargain" shopping




Frequent stock trading

$105 (15 trades a month at $6.99 each)



Two Starbucks visits a day








Let's say you find cheap alternatives to these regular monthly expenditures (we're not asking you to give up those lattes for good!) and then, like a good Fool, sock away the savings. In our example, we'll say the money is earning a tidy 6% average annualized return. (With our savings calculator, you can play with other rates of return.)

What happens then? Since we already gave away the $26,000 punch line in the headline, I'll skip the fanfare and cut right to "Tah-dah!"

"Big stuff" in Disguise

Lower-Cost Substitute

Savings Per Month

Savings Per Year

Savings Invested Over 5 years Earning 6%

Cable TV

Cancel premium service (watch on the Net or use Netflix instead)




Online "bargain" shopping

Limit purchases to $20 a week




Frequent stock trading

Trade three times a month




Two Starbucks visits a day

Three Starbucks visits a week









A few tweaks to routine spending can mean the difference, over five years, between shelling out $35,000 versus amassing more than $26,000.

Sweating the big stuff -- the right stuff -- simply means finding ways to whittle down the high-dollar categories gnawing away at your long-term wealth. See what a difference this targeted and sane approach could make in your cash flow with the "What will my savings be worth?" calculator.