Tuition by the month?

When it comes to bills, think outside the payment envelope.

For example, how'd you like to pay for all your produce by "investing" in a small farm? Or to view your kid's college tuition as a series of monthly payments?

Stephany W., who blogs at Penny Prudence, had $10,000 in a CD that paid very little interest. When the CD came due two years ago she cashed it in and loaned the money to an organic farmer who pays 7% interest in organic crops.

That translates to all the produce she and her husband can eat, plus a dozen free-range eggs per month. "It's really good food," she says. If they want the money back they can get it within 10 days' notice. (And yes, they report the 7% interest as taxable income.)

Degrees without debt?
According to FinAid.org the average annual cost for in-state public schools (tuition, fees, room and board) in 2011-2012 was $17,131.

Zac Bissonnette, the author of "Debt-Free U," suggests setting up tuition payment as a monthly debit; most colleges are willing to do this, he says. The idea of $1,888 per month for nine months is less daunting than $17,000 a year.

"When you break it up that way you end up with an amount of money many families could generate," Bissonnette says. Even if the student had to take out some loans, it would be "an amount that isn't a disaster."

That's still a lot of money. But expect your student to contribute $500 to $600 a month from a part-time job plus whatever he can earn over the summer, with the rest coming from you and your spouse (and any other relatives who wanted to pitch in a few bucks). It might mean overtime and some serious personal sacrifice -- but only for a few years. Compare that with student loans, whose repayment sometimes stretches over a decade or more.

Dealing with docs
If you don't have health insurance, try negotiating your care in cash. Regina Lewis of the DailyFinance blog suggests starting with the Healthcare Blue Book, a consumer guide that gives an idea of what health care providers accept from insurance companies in your region.

The website offers a sample letter of agreement. Take it to the doctor's office as "a starting point for gracefully negotiating and using facts -- not emotion -- to guide the discussion," she says.

And if you do have coverage? You might get a discount by handing over cash for a big co-pay (think "dental crown, 50%") versus asking for a payment plan. Lewis notes that one doc in an upper-middle-class suburb ends up writing off 40% of all procedures "due to nonpayment by patients and/or insurance companies."

In other words, some providers will be delighted by upfront payment, even at a discount.

More on insurance
If I pay my life insurance premium by the year instead of the month, I save $28. Not huge, but I'll take it.

Car insurance is usually cheaper when paid half a year at a time versus. month-to-month. Susan Ladika of Insure.com turned up a worst-case example: a half-year policy that cost an extra $141 if paid by the month.

• Bing: Who invented auto insurance?

Generally speaking, though, you can expect to save anywhere from $17 to $82 when paying a six-month policy in full. Create a budget that includes regular savings. Setting aside even $25 to $50 a month would mean that this time next year you'll have $300 to $600 for your insurance payment (or other unexpected bills).

Note: Some insurance companies reduce premiums for customers who drive relatively limited miles and avoid peak-traffic and late-night trips. For more information, see "Pay-as-you-go insurance on the rise."

Oldies but goodies
Finally, a trio of tried-and-true alternative payment plans:

Barter. Your dentist might trade that root canal for a parking lot re-do from your husband the paving contractor. Note: Bartering may have tax ramifications. See "Barter exchanges" on the IRS website.

Haggling. Bring the price down and the payments aren't as onerous. You can negotiate everything from a couch to a root canal, but not everyone's cut out for this kind of back-and-forth.

Layaway. The advantage is that you can make small, regular payments. Merchants like Wal-Mart and Toys R Us have announced they're refunding layaway fees (in the form of store credit, of course -- sneaky!).

The disadvantage? Your money is locked up. If you've got the discipline, make your "layaway"  payments into a savings account for the next couple of months, then go shopping. "You can get more bang for your holiday buck by holding off until late-season deals," says consumer savings expert Andrea Woroch.  

 

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