Jay-Z’s $450 million Business Empire

By Daniel Gross

This is a superstar economy, in which A-listers live large while minor leaguers struggle. Hedge fund managers like John Paulson may rack up big returns, CEOs like Lloyd Blankfein of Goldman, Sachs bag huge compensation packages, and all-star baseball players like Alex Rodriguez ink nine-figure contracts. But few of them can match the combination of fame, public acclaim and monetary value that Shawn Corey Carter has racked up.

Who?

Amid the carnage of the music industry in the past decade, Jay-Z has managed to parlay artistic success into financial fortune valued at up to $450 million, according to Forbes. Jay-Z's many business successes (and few failures) are described in a new book by Forbes writer Zack O'Malley Greenburg, entitled Empire State of Mind: How Jay-Z Went from Street Corner to Corner Office.

In 2010 alone, he earned $63 million, more than all but seven CEOs of public companies, writes Greenburg. While the money came primarily from touring, Jay-Z has a business interests ranging from music to nightclubs, from restaurants to apparel, from sneakers to a chunk of the New Jersey Nets. As Greenburg and I discuss in the video, the Brooklyn native, who spent a chunk of his teens selling drugs before devoting himself full time to rap, has "a unique ability to set trends and profit from them, almost to an astronomical level."

Early on, Jay-Z displayed an acumen for business. In 1994, unable to find a company to produce his debut records, Jay-Z, Damon Dash and a silent partner founded their own label, Roc-A-Fella Records. And when a distributor agreed to take on the album, he negotiated a deal to retain ownership of the master recordings.

In the late 1990s, he discovered that sales of Iceberg apparel rose after he began including references to them in his songs. But when he went to Iceberg and asked for an endorsement deal, the company demurred. Instead, he started his own apparel company, Rocawear. In 2006, Rocawwear was sold to a brand licensing company for $204 million.

There's been much more: a line of sneakers for Reebok, the 40/40 nightclub chain, an ad for Hewlett-Packard, and an interest in the hot New York City gastro pub, The Spotted Pig.

Jay-Z's career and business interests are vivid testimony to the mainstreaming of hip-hop culture. Deals come his way in part because he is, simply put, much cooler and culturally relevant than older guys in suits. It's not simply that he can attract a crowd, but that he lends a kind of legitimacy to all sorts of ventures — including the efforts to build a huge arena/ development to house the New Jersey Nets in Brooklyn. The New Jersey Nets, as Greenburg notes, had long been a second-tier team in the NBA, and an afterthought in New York. Facing political obstacles and community opposition, Nets owner Bruce Ratner offered Jay-Z a small ownership stake in exchange for becoming one of the public faces of the project. Another potential bonus: the other owners thought Jay-Z could help attract top talent like LeBron James to the Nets.

That hasn't quite worked out. And, of course, as is the case with most serial entrepreneurs, Jay-Z has had his share of business setbacks. He spent a fair amount of time last decade working on a Jay-Z Jeep, which fell apart due to issues at Chrysler. A GMC Yukon painted Jay-Z blue never got beyond the concept car stage. As Greenburg notes, the singer makes a strong effort not to highlight failures. "He doesn't want to be seen as anything other than victorious." Greenburg adds: "Even Jay-Z fails, but that doesn't make him any less of a businessman."

So what's next? Despite all his operations, music and performing remain at the core of his business, and of his brand. And here he faces something of a challenge. In rock and pop, it's not uncommon for groups and singers to fill big arenas well into their 60s — the Rolling Stones, Paul McCartney, even Neil Diamond (who is now 70!). But hip-hop is a much younger genre, and Jay-Z is already 41. "He's the first guy who is going to be out there and seeing what the market is for aging rappers," said Greenburg. "But if he wants to tour all the time like the Stones do, he could certainly do that."

Jay-Z has succeeded in part because of a tough-minded mentality that make him insist that he own a part of any operations he's involved with. And that explains in part why he and his team didn't cooperate with this book. When he signed his book contract, Greenburg went to Jay-Z's team, sought interviews, and explained the book as a business success story that "would put him up in the pantheon with Warren Buffett and Steve jobs." Came the response: "What's in it for us?" He didn't want to help with the production of a book that he wouldn't partially own. Besides, he was working on his own book. When it was published last November Decoded debuted as #3 on the New York Times best-seller list.

Daniel Gross is economics editor at Yahoo! Finance

8 Steps to Get Your Financial Life in Order

Do you have "frugal fatigue?" You're not alone. Pinching pennies becomes exhausting, year after year. You dream of breaking free and buying everything in sight.

But tiresome as budgets are, consumers haven't quit them yet. You threw some money around in December, when credit card use bumped up for the first time since the 2008 financial collapse. Then remorse set in. Consumers slashed their credit-card spending in January by 6.4 percent at an annualized rate, the Federal Reserve reported this week.

That fits with what the National Foundation for Credit Counselingis seeing on the ground. In a recent NFCC survey, two-thirds of consumers said that they're sick of having to question every dollar they spend, but have no choice. Incomes are virtually flat, employers aren't calling the long-term jobless back to work, and the cost of critical purchases such as health insurance and gasoline are leaping up. Only 5 percent of the people questioned said that they couldn't stand to keep living under fiscal restraint, and intended to spend more. About 8 percent said they didn't need to be particularly frugal. They hadn't cut spending and were doing fine.

The rest -- about 20 percent of the consumers -- overcame their frugality stress in the old fashioned way: they changed their lifestyles so they could live comfortably within the incomes they had. They found this new life so positive that they said they'd never go back, reports Gail Cunningham, a spokesperson for NFCC.

If you're sure that your financial troubles are temporary, it pays to pinch the pennies until the dollars start rolling back in. But the story is different if you see little hope of raising your income by enough to make your current expenses each to cover. Emotionally, making big changes is hard to do. But the faster you reinvent your life, the more money you'll have in your pocket and the sooner you'll be able to save again.

Your two largest expenses are probably your home and your consumer debt (plus health insurance, if you're not on a company plan). Your first step is to quit adding to debt -- put your credit cards on deep freeze and pay bills with cash or a debit card. Then follow these steps:

1. If you live in an apartment, check comparable rents in your neighborhood.

They've dropped in many parts of the country. If you find that you're paying more than the market requires, show your landlord proof and ask for a rent reduction. If the answer is no, move.

2. If you own a home and it's salable, sell.

Put any net gain into savings and investments, and find an apartment to rent. You'll be saving the high cost of maintaining a house, as well as tax and insurance bills.

Don't hold onto a house because you think you "need" the mortgage interest deduction. Financially, you're far better off without it. As an example, say that you're paying $1,000 in interest, in the 25 percent tax bracket. The taxpayers cover $250, leaving $750 as your net cost. Now imagine that you have no mortgage and $1,000 in income. You'll pay $250 in taxes, leaving you with $750 in your checking account. Losing the mortgage gives you more money to spend.

3. Restructure your credit card debt.

Move some of it to a new card with a zero-rate promotional offer. Don't use that card for purchases right away. Instead, concentrate on repaying this debt within the promotional period. You might also move debt from a high-rate card to one that's charging a lower rate.

4. Start a debt-repayment avalanche.

Get the latest bill for each of your credit cards, to see which one is charging you the highest rate (some cards have two rates, one higher than the other). Pay the minimum on the lower-rate cards and put all the rest of the money toward knocking off the high-rate debt. When that card is clean, move on to the next one.

Some people prefer to start by repaying the card with the smallest debt, even if its interest rate is low, for the pure pleasure of eliminating an annoying bill. Do whatever works. But you'll get the most bang for the buck by tackling the high-rate card first.

5. If you have savings, put all but a token amount against credit card debt.

Keep only $500 or $1,000 for unforeseen expenses. Consumers often don't realize the enormous return on investment they get from cleaning up their credit cards. For example, say that you're paying interest at a rate of 18 percent. Every payment you make against that debt gives you a guaranteed 18 percent return on your money. If you're paying a penalty interest rate of 24 percent, every payment equals a 24 percent investment gain. Where else could you get a yield like that, and totally safe?

6. If you have money in a 401(k) retirement plan and your job is safe, consider borrowing against it.

In theory, I consider these plans inviolable -- never to be touched. In practice, it makes sense to use them if they can help you rightsize your life. The transaction will look like this:

You'll borrow from the plan at 1 to 3 percentage points over the bank prime rate, which is currently 3.25 percent. So the loan might cost you 5.25 percent. You'll repay credit card debt at 18.25 percent, for a 13 percent gain. Typically, you'll have to repay the 401(k) loan over five years, with the payments deducted from your paycheck automatically. The interest you pay goes right back into your account, so you're paying t to yourself.

There are two financial downsides. First, you're repaying the loan with after-tax dollars. When you eventually take money out of the 401(k), those dollars are taxed again. But you're probably still ahead, thanks to the savings on your credit card bills. Second, you'll lose any appreciation that would have accrued to the money you borrowed. You can minimize this risk, however, by arranging to borrow against only the bond portion of your plan, leaving the stock portion exposed to any gains.

If you leave your job, and part of the loan is still outstanding, you'll have to repay it right away, in full. If you can't, the remaining loan will be treated as a withdrawal. You'll own income taxes on the money and a 10 percent penalty if you're younger than 59 1/2. So this loan is for someone who is pretty sure that his or her job is safe.

7. If you're one of the lucky 78 percent of homeowners who have equity, you could -- potentially -- pay off your credit card debt with a new home equity loan.

But the argument isn't as compelling as it is for loans against 401(k)s. Ideally, you're aiming for a paid-up home when you retire. That will cut your cost of living, give you access to a reverse mortgage for extra cash, and provide money needed for long-term care. A home equity loan might make that impossible.

8. If you don't have health insurance, any major illness could put you into bankruptcy.

Try for a high-deductible policy, or see if you (or your kids) qualify for Medicaid or the children's program,Schip. If insurance companies won't take you because of a medical condition, try for a place in the high-risk pools set up by the new health reform act. We're a long way from equal access to medical care, let alone care at an affordable price. But if you cut other expenses, you just might be able to afford good health.

This article is part of a series related to being Financially Fit

Source: Yahoo! Finance

How to Make $1 Million Before You Graduate

These entrepreneurs, interviewed by Forbes over the last three years, started launching businesses by the tender age of 9. Some of them identified problems and created companies to solve them, while others turned their hobbies into money-making ventures. Some teamed up with friends, parents and mentors; others plowed ahead on their own. To qualify for this round-up, the kids had to have cracked $1 million in revenue before college graduation and by age 22 (or be on track to do so), or had to have received funding that valued their operations at $1 million or more.

Autocricket

In the summer of 2008, after his high school graduation, Jason Brian started working in the marketing department of a South Florida car dealership. He knew the future of marketing was on the Web. "With half of the money, I found that I could double the results," by buying online ads and using search engine optimization techniques, he recalls. Three years later, at age 21, Brian spent "less than $10,000" of his savings to build a website that would help consumers look for cars. Autocricket.com made money by selling customers' information to dealers and manufacturers, which could market to customers directly. Six months after launch the site attracted the attention of two entrepreneurs in Naples, Fla., who invested $250,000. The site generated $1.2 million in revenue in 2009, when Brian was 22. In 2010 it did $6 million.

Showclix

In 2005, when he was 18, Joshua Dziabiak sold his first company--a Web hosting firm called Mediacatch--for north of $1 million. He bought a Mercedes (in cash) and a flat-screen TV, and used the rest to invest in other companies, including Showclix, his current venture, a website that lets performing arts centers, colleges, live music venues and other outlets sell tickets online, over the phone and at their box offices. In 2009 he raised nearly $1 million, which valued the company at $2.75 million. Showclix collects services fees (usually paid by the ticket buyer) of 7% to 15% of ticket sales. Those fees brought in $9 million last year.

Metrolyrics.com

In 2002, when Milun Tesovic was 16, he started a music website as a hobby, compiling lyrics to his favorite songs. Two years later he decided to turn it into a company. Today Metrolyrics.com has a database of lyrics of 2 million songs; it licenses some of them, and others users post on the site for free. The company, now with 20 employees, makes money selling ads, and hit $1 million in revenue in 2007, when Tesovic was 21. Tesovic juggles work with classes at Simon Fraser University in British Columbia, Canada, where he is a business major. "For me education isn't helping me find a career," he says. "It's more about growing myself."

Solben

Twenty-year-old Daniel Gómez Iñiguez launched Solben, a company that designs and manufactures a press that extracts oil from plants to produce diesel fuel. Iñiguez began his R&D in high school. He sold to his first client for $150,000--$75,000 up front to help build the product, followed by $75,000 upon delivery. The Monterrey, Mexico, company brought in "a little over $1 million" in revenue during its first year of business. Today it employs 15 full-time staff; Iñiguez is entering his junior year of college.

Glasses Direct

When 21-year-old university student Jamie Murray Wells attempted to buy a pair of prescription eyeglasses in 2004, he had a vision for a new type of business. Nonplussed by the $300 price tag, Wells decided to leave school and funnel his $2,000 student loan into what would become Glasses Direct, a London-based online retailer. In the first year the company's revenue topped $2 million.

Note: At the time of this writing, in 2010, the company pulled in $5 million in annual revenue, employed 70 people and had raked in $34 million in venture funding.

Dave Hogan/Getty

SuperJam

In 2002, at the age of 14, Fraser Doherty started making jams in his parents' kitchen in Edinburgh, Scotland. By age 16 Doherty left school to work on his jams full time. SuperJam's revenue hit $1.2 million in 2009.

Note: At the time of this writing, in 2010, Doherty remained the company's only full-time employee. Based on a reasonable valuation multiple of one time revenue (jelly maker J.M. Smucker traded between 1 and 1.5 times revenue), Doherty's debt-free stake was worth between $1 million and $2 million.

Mydesktop.com

In 1996 Michael Furdyk, then 16, started MyDesktop.com, an online computer magazine, in the basement of his parents' home in suburban Toronto. His site was filled with tips and advice Furdyk gleaned in online chat rooms, where he came across fellow teenager Michael Hayman. Hayman, an Australian, moved to Toronto to help build the business. Running lean, the pair bartered for website storage space and office rent. Soon MyDesktop.com was bringing in $60,000 a month in ad revenue from blue-chip clients like Microsoft.

Note: In 1999 Furdyk, Hayman and a third partner sold the site to Internet.com for "over $1 million," Furdyk told Forbes in 2010.

Copyrighted, Forbes.com. All rights reserved.

10 Things Hotels Won't Tell You

We expose the hotel industry's dirty laundry.

By Jim Rendon

Photo: Getty Images

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1. "In tough times we have to discount—creatively."

For the hotel industry, 2009 was the worst year since the Great Depression, and last year was only slightly better. At its low, the average daily room rate was $97, down from $107 in 2008, and occupancy rates fell below 55 percent. "This recession has been so traumatic across the board for all types of hotels," says Robert Mandelbaum, research director at Colliers PKF Hospitality Research. In turn, hotels have slashed staff and cut corners. Michael Aschoff, a retired compliance officer from Tampa, Fla., stays in hotels 30 to 50 nights a year and has noticed they've stopped replacing soap and providing body wash and mouthwash. "They have really cut back on little amenities," he says.

But hotels are holding the line on rates, says Travis Rank, director of worldwide sales at Best Western International. Instead, some hotels offer free parking, gift cards or other perks, like a free extra night for customers who book a certain number of nights in a row. Check hotel websites to find these deals—which are likely to be available until 2012, when the industry is expected to recover.

2. "Book with us to get an upgrade."

When you book your room through a third-party site like Expedia or Travelocity, the hotel typically pays a commission—up to 30 percent. Through their own sites, hotels will usually match the best rates and may offer specials, and many will let you change your reservation without penalty if you've cut out the middleman.

What's more, book directly with the hotel and your "chances of getting an upgrade are vastly improved," says Rank. Hotels also like to save perks for their loyalty-program members. Chris Jones, the general manager of Hotel Indigo in San Diego, says he gives upgrades to about 35 percent of customers, with priority going to loyalty-card holders. "The hospitality industry is all about relationships," says Fredrik Korallus, executive vice president for global revenue generation at Carlson Hotels. "If you want something, it never hurts to ask."

3. "We can be sneaky about our best deals."

Since most hotels are franchises, individual owners offer the best deals. They're promoted online, via e-mail newsletters and, more recently, through social networking sites like Facebook and Foursquare. Hotel Indigo had 500 followers on Twitter before it even opened, and Jones says last fall he offered $185 rooms to followers for $99—and booked 45 rooms in two hours. Robert A. Rauch, a managing partner at a San Diego Hilton, says he offers time-sensitive deals and restaurant or spa specials online. Hotels also offer discounts through partners like Visa or American Express, but since hotels aren't always enthusiastic about those, "sometimes it takes some effort" to find them, says Matthew Stone, a professor of travel and tourism at Prince George's Community College in Washington, D.C.

4. "Your room won't really look like this."

There are plenty of places to find reviews of hotels, from newspapers and magazines to websites with traveler reviews. But when you want to see what the room or the pool looks like, you often have to trust the hotel—which may not be trustworthy, says Eli Seidman, founder of travel site Oyster.com. There, Seidman posts a hotel's image next to one taken by his own photographers to show readers how deceiving hotel marketing can be. "It's pretty bad, in varying degrees, across the whole industry," says Seidman. And when it comes to the description of the room, "the square footage is complete nonsense," he says.

Most hotels are not out to actively deceive customers. "We want to ensure that the images are accurate," says Jeff Wagoner, president of Wyndham Hotels & Resorts. But, he adds, "we have no specific written guidelines."

5. "Kiss your credit card data goodbye."

Hotels have become a favorite target for credit card–data thieves. According to digital-security firm Trustwave, 38 percent of the credit card– hacking cases it worked on in 2009 were in the hospitality industry—far more than any other industry the company works with. Hackers (usually organized crime outfits) access a hotel's network by guessing the administrator password, then place malware on the network, which then transmits guest's card numbers back to them. They can also steal other info about you—home address, phone number, license plate number—to aid in identity theft. Nicholas J. Percoco, director of Spider Labs, a unit of Trustwave, says he had his own card data stolen and used just minutes after he checked into a hotel last year. "It can happen really quickly," he says.

"This has become a priority in the industry," says Wagoner. "We are putting a lot of effort and energy toward data security." His company, like others, has basic requirements in place that franchisees are expected to follow. Visa has also worked with the industry to improve its data security. And things are getting better: Percoco says the hospitality industry fell to become the second most targeted industry in 2010.

6. "We need locals as much as travelers."

With fewer people traveling, hotels that have bars, restaurants, spas and golf courses have been forced to look closer to home for help making up lost revenue. At the San Diego Hilton, Rauch says, 60 percent of the revenue from the spa and 70 percent from the bar come from locals. "Hotels need to learn to become the hub of the community," he says. Korallus says the majority of customers at the FireLake restaurant in the Minneapolis Radisson are locals, and Carlson Hotels is launching two new restaurants designed to attract more local business. Wyndham hotels that usually cater to business travelers have likewise sought to lure locals by offering discounted weekend rates. Indeed, much of the industry has worked to boost revenue this way, says Mandelbaum. And while it has helped, it has not made up for all the lost room revenue in the short term.

7. "We'll happily waive that fee."

These days airlines have found a way to charge for just about everything, but it's a different story for hotels, which have been losing revenue from once reliable sources. At one time, people paid exorbitant fees to use the room phone; now everyone has a cell phone. Revenue from pay-per-view movies is down significantly now that people bring movies with them on their laptops. Looking to add revenue, hotels have upped staples like parking charges (up to $40 a day) and the mysterious "resort fee" that some vacationers have seen tacked on to their bills (as much as $30). "Hotels are desperate to leverage up these fees," says Rauch.

The good news: Hotels are pretty open to negotiating or even waiving some of these fees, says Stone. Unlike the airlines, where just a few companies control the industry, the hotel business is made up of more individual owners who are desperate for loyal customers and who are competing against other hotels that may not charge these fees. Bottom line: If you don't like a fee, ask about it.

8. "We can't do much about bedbugs."

Hotels are a perfect environment for bedbugs— lots of turnover and lots of beds. And it has become a big issue for the industry. According to the National Pest Management Association, 67 percent of the pest-control companies it surveyed have received calls to treat hotels and motels. Unfortunately, there's really nothing hotels can do to prevent travelers from bringing them in, since bedbugs are tiny and can hitch a ride on clothes or luggage. "The key is to find it and treat it as quickly as possible," Jones says.

Travelers can use BedBugRegistry.com or the iPhone app Bed Bug Alert to search for infested hotels but should take these sources with a grain of salt—the cases haven't been verified and, even if true, may have been treated already. Your best bet: On arrival, check the corners of the mattress for bedbugs or the telltale brown spots they leave.

9. "We obsess over online comments."

Traveler-review sites have become a powerful force in the hotel industry. Too many bad reviews and business may start to slide—a fact those in the industry know all too well. "We highly recommend that hotel managers keep up with what is being said about them online, and not only respond but rectify any issue the customer might have had," says Wyndham's Wagoner.

For consumers, these reviews are bringing changes for the better. Korallus says some of his hotels have begun opening their gyms an hour earlier, thanks to online comments. And Jones says he brings online comments into staff meetings: "The more feedback, the better."

10. "You can make a killing on points."

A few years ago, Dave Weinberg, a Maryland-based consultant who travels a lot for work, became a platinum member of Intercontinental Hotel's Priority Club Rewards program—without spending much time at the hotel. He signed up for the branded credit card, then benefited from generous point offers. "All hotels are trying to lure in travelers with extra point offers," he says.

"This is the longest period of sustained hotel promotions we've ever seen," says Tim Winship, publisher of FrequentFlier.com. Hotels are offering double and triple points to those who stay with them. As hotel points rack up, Winship says, travelers might think about swapping hotel points for airline miles, since airlines are raising prices while hotel rates are likely to remain low in many markets. "The way things are going, airline miles have more real value," Winship says.

Source:

http://travel.yahoo.com

25 Ways to Waste Your Money

Plug your financial leaks, and pocket the savings.

Has your budget sprung a leak?

Nearly everyone has spending holes. And as with other kinds of leaks, you may have hardly noticed them. But those small drips can quickly add up to big bucks. The trick is to find the holes and plug them so you can keep more money in your pocket. That extra cash could be the ticket to finally being able to save, invest, or break your cycle of living from paycheck to paycheck.

Here are 25 common ways people waste money. See if any of these sound familiar, then look for ways to plug your own leaks:

1. Carrying a balance. Debt is a shackle that holds you back. For instance, if you have a $1,000 balance on a credit card that charges an 18% rate, you blow $180 every year on interest. Get in the habit of paying off your balance in full each month.

2. Overspending on gas and oil for your car.There's no need to spring for premium fuel if the manufacturer says regular is just fine. You should also check to make sure your tires are optimally inflated to get the best gas mileage. And are you still paying for an oil change every 3,000 miles? Many models nowadays can last 5,000 to 7,000 miles between changes, and some even have built-in sensors to tell you when it's time to change the oil. Check your manual to find the best time for your car's routine maintenance.

3. Keeping unhealthy habits. Smoking costs a lot more than just what you pay for a pack of cigarettes. It significantly increases the cost of life and health insurance. And you'll pay more for homeowners and auto insurance. Add in various other expenses, and the true cost of smoking adds up dramatically over a lifetime -- $86,000 for a 24-year-old woman over a lifetime and $183,000 for a 24-year-old man over a lifetime, according to "The Price of Smoking" (The MIT Press).

Another habit to quit: indoor tanning. There is now a 10% tax on indoor tanning services. As with cigarettes, the true cost of tanning -- which the World Health Organization lists among the worst-known carcinogens -- is higher than just the price you pay each time you go to the salon.

4. Using a cell phone that doesn't fit. How many people do you know who have spent hundreds of dollars on fancy phones, and then pay hundreds of dollars every month for the privilege of using them? Your phone is not a status symbol. It is a way to communicate. Many people pay too much for cell phone contracts and don't use all their minutes. Go to BillShrink.com or Validas.com to evaluate your usage and see if you can find a plan that fits you better. Or consider a prepaid cell phone. Compare rates atMyRatePlan.com.

5. Buying brand-name instead of generic. From groceries to clothing to prescription drugs, you could save money by choosing the off-brand over the fancy label. And in many cases, you won't sacrifice much in quality. Clever advertising and fancy packaging don't make brand-name products better than lesser-known brands.

6. Keeping your mouth shut. No one wants to be a nuisance. But by simply asking, you may be able to snag a lower rate on your credit card.

When shopping, watch for price discrepancies at the cash register, and make a habit of asking, "Do you have a coupon for this?" You might even be able to haggle for a lower price, especially on seasonal or perishable items, floor models or big-ticket purchases. Many stores will also match or beat their competitors' prices if you speak up. And try asking for a discount if you pay cash or debit -- this saves the store the cut it has to pay the credit-card company, so it may be willing to give you a deal. It doesn't hurt to ask.

7. Buying beverages one at a time. If you're in the habit of buying bottled water, coffee-by-the-cup or vending-machine soda, your budget has sprung a leak. Instead, drink tap water or use a water filter. Brew a homemade cuppa joe. Buy your soda in bulk and bring it to work. (Better yet, skip the soda in favor of something healthier.)

8. Paying for something you can get for free. There's a boatload of freebies for the taking, if you know where to look. Some of our favorites include restaurant meals for kids, credit reports, software programs, prescription drugs and tech support. You can also help yourself to all the books, music and movies your heart desires at your local library for free (or dirt cheap).

9. Stashing your money with Uncle Sam rather than in an interest-earning account. If you get a tax refund each April, you let the government take too much money in taxes from your paycheck all year long. Get that money back in your pocket this year -- and put it to work for you -- by adjusting your tax withholding. You can file a new Form W-4 with your employer at any time.

10. Being disorganized. It pays to get your financial house in order. Lost bills and receipts, forgotten tax deductions, and clueless spending can cost you hundreds of dollars each year. Start by setting up automatic bill payment online for your monthly bills to eliminate late fees and postage costs. Then get a handful of files to organize important receipts, insurance policies, tax documents and other statements.

Finally, consider using free budgeting software such as Mint.com to see exactly where your money goes, making it much harder for you to lose track of it.

11. Letting your money wallow in a low-interest account. You work hard for your money. Shouldn't it work hard for you too? If you're stashing your cash in a traditional savings account earning next-to-nothing, you're wasting it. Make sure you're getting the best return on your money. Search for the highest yields on CDs and money-market savings accounts. And consider using a free online checking account that pays interest, such as ones offered by Everbank and ING Direct.

Your stocks and mutual funds should be working hard for you, too. If they've been lagging behind their peers for too long, it could be time to say goodbye. Learn how to spot a wallowing fund or stock.

12. Paying late fees and missing deadlines. Return those library books and movie rentals on time. Mail in those rebates. Submit expense reports on time for reimbursement. And if you make a bad purchase, don't just stuff it in the back of the closet and hope it goes away. Get off your duff, return it and get your money back before you lose the receipt.

13. Paying ATM fees. Expect to throw away nearly $4 every time you use an ATM that isn't in your bank's network. That's because you'll pay an ATM surcharge, and your own bank will hit you with a non-network fee. Consider switching to a bank, such as Ally Bank, that doesn't charge ATM fees and reimburses you for fees other banks charge. Another way to avoid fees if there's not an ATM in your bank's network nearby is to get cash back when you make a purchase at the grocery store or drugstore.

14. Shopping at the grocery store without a calculator. Check how much an item costs per ounce, pound or other unit of measurement. When you comparison-shop by unit price, you save. For example, if a pack of 40 diapers costs $13, that's 33 cents per diaper. But if you buy a box of 144 diapers for $35, that's 24 cents per diaper. You save 27%! (Of course, buying more of something only saves money if you use it all. If you end up throwing much out, you wasted money.)

15. Paying for things you don't use. Do you watch all those cable channels? Do you need those extra features on your phone? Are you getting your money's worth out of your gym membership? Are you taking full advantage of your Netflix, TiVo and magazine subscriptions? Take a look at what your family actually uses, then trim accordingly.

16. Not reading the fine print. Thought you were being smart by transferring the balance on a high-rate credit card to a low-rate one? Did you read the fine print, though? Some credit-card companies now charge up to 5% for balance transfers. Also watch out for free checking accounts that aren't so free. Some banks are starting to charge fees unless you meet certain criteria.

17. Mismanaging your flexible spending account. For some people, that means failing to take advantage of their workplace FSA, which lets employees set aside pre-tax dollars for out-of-pocket medical costs. Other people fail to submit receipts on time. And the average worker leaves $86 behind in his or her use-it-or-lose-it FSA account each year, according to WageWorks, an employee benefits provider.

18. Being an inflexible traveler. You'll save a lot of money on travel if you're willing to be flexible. Consider traveling before or after peak season when prices are lower. Or search for flights over a range of dates to find the lowest fare. Booking at the last minute also can save you money because hotels and airlines slash prices to fill rooms and planes. And flexibility pays off at blind-booking sites, such as Priceline or Hotwire, which offer deep discounts if you're willing to book a room or flight without knowing which hotel or airline (or other details about the flight) you're getting until you pay.

19. Sticking with the same service plans and the same service providers year after year. Hey, we're all for loyalty to trusted service providers, such as your bank, insurer, credit-card company, mutual fund, phone plan or cable plan. But over time, as prices and your circumstances change, the status-quo may not be the best deal any more. Smart consumers are always on the lookout for bargains.

20. Making impulse purchases. When you buy before you think, you don't give yourself time to shop around for the best price. Take the time to compare prices online, read product reviews and look for coupons when appropriate.

Make it a policy to give yourself a cooling-off period in case you're ever tempted to make an impulse purchase. Go home and sleep on the decision. More often than not, you'll decide you don't need the item after all.

21. Dining out frequently. Spending $10, $20, $30 per person for dinner can be a huge drain on your wallet. Throw in a $6 sandwich for lunch every day and you've got quite a leak. Learning to cook and bringing your lunch from home can save a couple hundred bucks each month. When you do go out, consider getting carry-out instead of dining in (you'll save on the tip and drink), skip the overpriced appetizer and dessert, and search the Web for coupons ahead of time.

22. Trying to time the stock market. In trying to buy low and sell high, many people actually do the opposite. Instead, employ the simple strategy of "dollar-cost-averaging." By investing a fixed dollar amount at regular intervals, you smooth out the ups and downs of the market over time. If you take out the emotion and guesswork, investing can become less stressful, less wasteful and more successful.

23. Buying insurance you don't need. You only need life insurance if someone is financially dependent upon you, such as a child. That means most singles, seniors or kids don't need a policy. Other policies you can probably do without include credit-card insurance (better to use the premium to pay down your debt in the first place), rental-car insurance (most auto policies and credit cards carry some coverage), mortgage life insurance and accidental-death insurance (a regular term-life insurance policy will do the trick).

24. Buying new instead of used. Talk about a spending leak -- or, rather, a gush. Cars lose 20% of their value the moment they're driven off the lot and 65% in the first five years. Used models can be a real value because you can get a car that's still in fine working order for a fraction of the new-car price. And you'll pay less in collision insurance and taxes, too.

Cars aren't the only things worth buying used. Consider the savings on pre-owned books, toys, exercise equipment, children's clothing and furniture. (Of course, there are some things you're better off buying new, including mattresses, laptops, linens, shoes and safety equipment, such as car seats and bike helmets.)

25. Procrastinating. Time is an asset money can't buy. Start investing for retirement as soon as possible. For instance, if a 40-year-old saves $300 a month with an 8% return per year, he'll have $287,000 by age 65. If he had started saving 15 years earlier at age 25, he'd have more than $1 million.

___ Source: Yahoo ! Money