Finding Money: 11 Ways to Save Money you are Spending Without Sacrificing Anything

by Nora Dunn on 29 February 2008 8 comments
Photo: Elle Chyun

There are a number of ways to find money by rearranging your finances, stretching your shopping dollar, and spending wisely. Here is a collection of 11 Tips to help you find some money of your own.

 

Change your Witholding Tax

If you typically receive a tax refund each year, you can actually ask your employer to reduce the amount of tax withheld off your paychecks. I know I know – you like getting those fat checks at tax time each year, but in reality it’s like an interest-free loan to the government. Your money is much better in your own pocket, thank you very much.

Reduce Interest Rates on your Debt

As cited in a previous article, more than half the time if you ask for a discount by calling your credit card company, you will receive one!

This also applies to your other loans. If you happen to be drowning in your own finances, you can call any creditors you owe, explain your situation, and they can make concessions for you. If the agent you are talking to on the phone can't do it, politely ask for their manager; they have more clout for granting rate discounts.

 

Refinance your Car Loan

If your car is still less than five years old, and you got your loan through the dealer, you may be able to do better. Using a website like bankrate.com will help you find the best loan rates in your area, and Kelley Blue Book will tell you the blue book value of your car.

Assuming your credit hasn’t worsened since you bought the car, and assuming the car is in good condition, you will likely be able to refinance your loan for minimal fees.

Just make sure you don’t extend the term of your loan. The idea here is to refinance at a lower interest rate, not reduce your expenses by extending your liability periods.

 

Consolidate Student Loans

Wouldn’t one nice monthly payment be nice? You can save up to $150/month by consolidating your student loans.

The aim here is not to reduce your interest rates overall, since most student lenders will offer the same rates. Instead call each lender you have a student loan with and explain your situation and desire to consolidate. Some will offer you rate discounts after making payments for a certain period of time, or discounts for paying with pre-authorized debiting from your bank account.

 

Get Rid of Mortgage Life Insurance and replace it With an Individual Policy

You will find that more often than not, replacing your mortgage life insurance policy acquired through the bank with an individual term life insurance policy will save you at least a few bucks each month. Not to mention a myriad of other benefits that make this decision a no-brainer.

 

Eliminate Mortgage Insurance (PMI)

Not to be confused with Mortgage Life Insurance, mortgage insurance is required by the bank if you made a down payment of less than 20% of the value of your home. Once you have achieved more than 20% equity, this insurance drops off.

You may not be close to having made enough payments to accrue 20% equity, but your home may have appreciated, and all the appreciation belongs to you.

You will have to pay for an appraisal of the property, which can run in the neighborhood of $350, so it would be best to analyze how much you are paying in mortgage insurance before running out to pay for an appraisal for minimal savings.

 

Save on Utilities

A few techniques used in this department will not only help you to save some money, but you’ll also be friendly to the environment in the meantime.

  • Wash your air filters for your heater or furnace regularly. Doing this can save you up to $50/year in heating expenses.
  • Install a thermostat that adjusts automatically at night (since you’ll be wrapped up in blankets, you probably don’t need the place to be as warm). This can knock an additional 10% off your bill.
  • Seal your windows to eliminate draft, by installing weather stripping or adding caulk to the weak spots.
  • Call your utility company to see if they have any programs in place for you to earn discounts. Sometimes use of certain appliances or techniques will allow you to save money off your bills.
  • Xin has a few other tips worth checking out to reduce your heating expenses.

 

Child Care

Although this expense in and of itself can rarely change, you can change how you pay for it. Many employers have a dependent care spending account, which will allow you to pay for your child care with pre-tax dollars. This is another way to get your tax refund up front, so if you are also employing step one from this article, be sure not to reduce your withholding too much or you may end up owing when you file.

 

Home and Auto Insurance

Have you shopped around lately? If you haven’t, you may find that rates have changed and you can replace your policy while saving money.

You can also consider increasing the deductible (the amount you have to pay out of pocket if you make a claim), which will reduce your premiums. Just make sure you maintain a deductible that your wallet or emergency fund can handle at claim time.

 

Term Life Insurance

Again, you may find that the rates have changed since you took out your policy. With people living longer, the cost of life insurance is actually going down! A term policy is easily replaced by applying for a new policy with a different company, then canceling your old policy once accepted at the new rates. It is very important that you get your new policy in hand before canceling the old one, just in case they discover something in your medical records that lead to higher rates or a flat out refusal to offer coverage.

 

Permanent Life Insurance

Do you have a whole life or universal life insurance policy that is sucking you dry? Chances are that if you need to find money, you can find it here. Call your insurance agent (or the company directly) and look into your options for reducing your premiums. Oftentimes part of your premiums go to the cost of insurance, and the rest go into an investment account of sorts. You will likely have the ability to reduce the amount going into the investment account. You also might be able to take out a loan against the cash value of the policy if you need a chunk of money right now, but be sure to consult a professional about all the ramifications before choosing this option.

 

 

 

The trick with all this money you have now found is to use it constructively. In some cases you have taken on more risk in reducing your expenses (for example by increasing your insurance deductibles or reducing your withholding tax), leaving you vulnerable to possible financial hits later on. Be sure that you document your money saved, and apply it directly to other areas of your finances that need it: debt reduction, savings, or an emergency fund.

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Guest's picture
Rachel

With the tax witholdings, that's one that's easy to forget. I have one friend who had his reduced to the minimum, and then put aside a percentage of his paycheck in a money market account. That way, his budget stayed the same as before he changed the witholdings, and although he had to pay taxes, he did earn interest on the money.

And with the interest rate on debt, a lot of credit cards allow you to raise your limit automatically online. While this doesn't help your payment, it does look good on your credit score, helping you qualify for lower interest on other things. Also, my husband ran through a bad patch a couple years ago, and accumulated some debt in the process of keeping us affloat. Now that we are stable, his credit still isn't that great, but mine came through unscathed. I opened a line of credit and transfered his debt to it. He still makes the payments, but the minimum is now 1/3 of what it was before. That's a huge savings, and it looks great on both our credit ratings!

Guest's picture
Guest

Doesn't the government of the USA pay the interest on the withheld taxes?
I am in Switzerland and I usually send in my tax prepay as fat and as early as possible because i even get a better rate than a normal savings account in the bank.

Maybe it is time to ask for it to your government because if they don't pay it, then it is just a rip off.

Guest's picture

My husband and I recently started using BulkHome.com for bulk grocery shopping. They have free shipping and don't charge membership fees.

It's one of the ways we save money. That and a tough but flexible budget.

Guest's picture
Mary

Considering that your writeup here on insurance, one suggestion I would make is for people to definitely check out and support peer to peer insurance. This is a new type of insurance system where you don't automatically lose all the premium you pay, among other great features. A friend told me about it and I shared the info with my circle of friends, mostly moms. Everyone of us loved the idea. You can see it for yourself at http://www.peertopeerinsurance.com

Guest's picture

I love the tips that you offer. Keep up the great work.

Guest's picture
Odd Lot

Great post! Here's one that isn't exactly free but it does help you save money without sacrificing your lifestyle.

If Your Company Offers Free Money, Take It
Would you like to get an instant 125% return on your savings plus a bigger tax return? Many company have 401k Matching programs of up to $5,000. This means that they'll match you dollar for dollar on every penny that you contribute. That's a 100% free return for any money that they agree to match.

In addition to this free match, all of your 401k contributions reduce your taxable income so you will get a bigger tax return next year. If you're in a 25% tax bracket, you avoid that 25% tax on every dollar you contribute. If you're not contributing, I can promise with 100% confidence that you can contribute at least 2 or 3% of your income without even noticing the difference.

For example, if you bring home $2,500 per month and decide to contribute 3% to your 401k to take advantage of this free money, you will still bring home $2,425. What do you get in return? 125% instant gain on your money plus a bigger tax return. The average return on the S&P 500 since 1975 has been 10.75% so a 125% return is a pretty good deal. (keep in mind that this article is about "painless" ways to save, I would normally recommend contributing a much higher percentage. You should contribute at least as much as your company matches, it's free money!)

Great post, thank you for all the great tips, I'm always looking for more ways to save. (-:
Cheers!
Odd Lot
http://www.blog.Money-and-Investing.com

Guest's picture
Guest

One more: eat healthier. It may feel like a sacrifice to stop eating junk food, but when you really think about it, you can't miss something you don't eat. When you stop eating junk food, you will laugh at how you used to eat it.

Guest's picture
Sally

This was a great post. A lot of those things make great points. I think the hardest part of cutting in a budget to save is sacrificing the things we love. I know for me I got rid of my landline ( because lets face it... I use my cellphone for everything). And then I took my cellphone and took it off a contracted company that was charging be up the kazoooo and switched to a prepaid company named Tracfone. It was the easiest smartest thing ever. I was able to keep my smartphone ( samsungt404g) with everything I wanted like messaging, internet, bluetooth,... but activate it through tracfone and they gave me all these great deals that basically makes my phone the most inexspensive I have ever paid for a phone! Some luxuries are hard to give up and yes an iphone is magnificent but if you want a smart phone there is no reason not to switch to tracfone if you want to save.