Follow these tips to keep money in your pockets
Who isn’t looking for ways to save some cash? Here’s a month’s worth of money-saving tips — some big, some not so big — to start developing good financial habits.
1. Pay off credit weekly. Credit-card companies accrue interest daily, so if the minimum amount due is $100, send $25 weekly instead of paying at the end of the month to save money on interest.
2. Claim the child tax credit on your return, advises Babytalk Finance Guide. Depending on your income, this credit can shave as much as $1,000 from your taxes.
3. Get a “family share” cell-phone plan. A regular 400-minute plan is about $40 a month, but share an 800-minute plan with your spouse for just $70 and you save $10.
4. Hector A. Jimenez of West Coast Mortgage recommends comparing points, costs and interest rates when refinancing. “You may have to pay a higher interest rate over the life of the loan if you get a ‘no point’ loan,” he said. “Always ask your broker if rebate pricing is involved on your loan.”
5. When searching for the cheapest airline tickets, shop early in the morning. According to Consumer Credit Counseling Service, most airlines and travel sites introduce their promotional fares in the middle of the night.
6. CCCS also suggests you consider adjusting your withholding allowances to cover what you owe and no more. The average income tax refund in 2003 was more than $2,000, so Uncle Sam got to use that $166 each month instead of you.
7. To shave years off of your mortgage and save thousands of dollars in interest, send in one extra principal payment each year, advises CCCS. Or, divide your monthly payment by 12, and add that amount to each payment, noting that it is for principal only.
8. Want to transfer your tax basis under Proposition 60, but the home you’re buying is more than your current residence? Jon Mahoney of Coldwell Banker suggests paying all or part of real estate commissions separately, thereby reducing the purchase amount. “This can save you thousands of dollars every year,” he said.
9. The online forum, wwww.savingadvice.com, recommends participating in a child-care flexible spending account if your employer has one. This is a special Internal Revenue Service account that allows you to set aside money for child-care expenses with pre-tax dollars.
To save money on college expenses, savingadvice.com offers these tips:
10. Although application deadlines for most college scholarships aren’t due until senior year, start searching for grants and scholarships freshman year. By finding potential awards when your child begins high school, he or she can choose classes and participate in activities that will provide a better chance of getting free cash.
11. Education IRAs (Coverdell Education Savings Accounts) are no longer just for college. You may contribute up to $2,000 a year per beneficiary, and the money may now be used for elementary and secondary school costs as well as college expenses.
12. Reduce your college expenses by earning as many college credits outside the classroom as possible. Advanced Placement tests, internships, public service and job- training programs are a few examples of ways you can trim tuition costs by earning college credit outside the classroom.
13. There are some 750,000 college scholarships available to qualified students. While many of these are financial need- and grade-based, many others aren’t. Don’t let household income or grades stop you from searching for scholarships.
14. You’re allowed to pay any amount for an unlimited number of people’s college tuitions — not room and board or school supplies — without owing any gift taxes. For the tuition payments to qualify, you must pay the tuition directly to the college.
15. Signing up for a 401(k)? “Be sure to review the company benefit, and if there is a match, contribute the full amount necessary to take full advantage,” recommended Rich Schuette, senior advisor for TS Capital Group. “If you don’t, it’s like leaving free money on the table and can cost you tens of thousands of dollars over your working career.”
16. Consider a high deductible health insurance plan if available and save the difference in premium into an HSA (health savings account), advises Schuette. The money is tax deductible and will grow tax deferred, giving you the possibility of paying for many medical needs with tax-free money.
17. If you own rental property, consider working for your own property management company and start an additional retirement plan for yourself, lowering your tax liability and growing your retirement assets, suggests Schuette.
18. Pat Veretto of Frugal Living recommends: “Raise your auto insurance deductible and your premium will drop. If you now have $100 deductible, raise it to $500 or even $1,000 if you can do it and your insurance company allows it. Put that amount in a savings account and leave it to earn interest. If you don’t have an accident, it’ll still be yours and you’ll be making a little money on it. Even if you do have an accident, you’ll have the money to pay up. You won’t have lost anything because the difference in the premium will probably already have made up for any amount you have to pay on your own.”
19. Go digital. If you take 48 pictures a month, a digital camera can save you $20 a month, plus you don’t have all those not-up-to-par prints sitting around in boxes.
20. If you don’t keep good records, you’re probably not claiming all of your allowable income tax deductions and credits, advises Deborah Fowles in Your Guide to Financial Planning. “Set up a system now and use it all year. It’s much easier than scrambling to find everything at tax time, only to miss items that might have saved you money.”
21. “You’ve probably heard of the famous real estate mantra ‘location, location, location,’ but do you know the financial mantra ‘tracking, tracking, tracking?’ It is the single most important thing you can do — and the first step — to put you in the driver’s seat of your own life,” according to Linda Starr of Budget-Tools-and-Tips.com.
22. You may lower the price of a round-trip airfare by as much as two-thirds by making certain you stay over a Saturday evening, and by purchasing the ticket in advance, recommends Starr.
23. In these days of rising gas prices, she also suggests you can save money on gas by keeping your engine tuned and your tires inflated to their proper pressure.
Don’t just look to the present when it comes to finance, Candace Bahr and Ginita Wall, authors of It’s More Than Money-It’s Your Life: The New Money Club for Women, advise teaching children about financial decision-making by:
24. Starting allowances early, around age 5 or 6. Don’t let your children get in the habit of asking you for cash rather than choosing responsibly how to save and spend their own money.
25. Teach children how credit cards work. If children know how the cards work before they get one, they may be able to handle the responsibility better than teens who get a card and know nothing about them.
26. Starting a family Money Club. Your older teens may benefit from being included in a Money Club where they can report to other family members about money issues and help make group decisions.
Save money at the grocery store with these tips from www.grocerysavingstips.com.
27. When a product is on sale like “two for $5” you can almost always purchase just one of the items for the sale price (which in this case would be $2.50). In other words, you do not have to purchase two, or three, or four, or whatever else the sale sign says.
28. Don’t be brand loyal. Try to buy only what’s on sale. Sometimes a name brand can even be on sale for the same price as the store brand, or less, so read those tags carefully.
29. If you have a magazine you tend to keep picking up each month while you’re at the grocery just subscribe to the darn thing and save yourself $20!
30. In case these financial tips are coming a little too late and you need to file for bankruptcy, Ira and Linda Distenfield recently published We The People’s Guide to Bankruptcy, which helps consumers file for bankruptcy as affordably and painlessly as possible, before new federal laws go into effect in October.
Beacon intern Katherine Manning contributed to this report.