When using the automatic teller machine, always wait for the “Welcome”
prompt to signal that your transaction is over, and then take your card. Leaving
prematurely may allow the next customer to continue making transactions in
Don’t buy checks through the bank. You can save 50 percent of what they charge
by ordering through an independent source like Current, 800-848-2848
(Current.com), or Checksin-theMail (checksinthemail.com), 800-733-4443.
Banking—checks, deposit safety
Before you take a check to the bank, write on the back “for deposit only”
followed by your signature and account number. If the check is lost or stolen
before you can get it to the bank, it cannot be cashed or deposited to any other
Many credit unions offer low-or no-fee checking accounts and free checks. Go to
www.FindACreditUnion.com to find a credit union that is right for you. Most
credit unions welcome spouses, children, brothers, sisters, and parents of the
member. You will enjoy federally insured deposits and low-interest auto loans.
And you’ll earn higher than bank interest rates on your savings accounts.
Arrange with your bank or credit union to have your paycheck automatically
deposited, your bills paid automatically, and your savings funded automatically
from your checking account. With this type of arrangement you will be handling
your money less, so you won’t be as tempted to play games with the account.
The national average bank charge for online bill pay is $.69 a month, which
reflects the fact that most banks offer this service for free. Your bank will be able
to answer all of your questions.
Switch to a smaller, locally owned bank. The fee structure will likely be lower
and some services will actually be offered at no cost, such as free checking and
Bill paying—envelope method
Use the envelope system to handle your household money. Once a month (or as
often as you are paid), withdraw a sum according to your spending plan
categories, and place that specific amount of cash into each envelope marked for
that purchase instead of keeping it in your checking account. This method will
really help eliminate the temptations to “just write a check” or use your debit
card for this or that. For some reason, this system really keeps folks honest and
forces them to spend only a set amount in each category. When it’s gone, it’s
gone. This provides a great visual learning experience for children when they
can actually observe their parents managing the money.
Bill paying—keeping track of due dates
To keep track of bills that are coming due, put the return portion of each bill in
an envelope, address it, stamp it, and write the due date on the left-hand corner
of the envelope. File the envelopes chronologically, and review them weekly. No
more late fees.
Bill paying—pay the rent first
Which payment should you pay first when things are tight and something has to
take priority? Pay the rent first. Typically, landlords act quickly if you don’t pay
Bill paying—pay twice a month
Get into the habit of paying bills twice each month, say, on the 1st and 15th.
During the month as the bills arrive, follow this routine: Open a bill and place
the return portion in its return envelope and throw the rest away. Write the due
date on the outside of the envelope and separate into two due-date piles: “1st of
the month” and “15th of the month.”
If you have an extra room, consider taking in a boarder to help defray your costs.
Post a notice at a local community college or corporation. Check with personnel
offices at larger corporations in your area. Often they assist employees in
locating affordable housing. Before you hand over the keys to your house to a
stranger, check many references, get a credit report on the candidate, and have a
written contract that includes Rules of the House.
Contingency fund in safe place
You need to have some of your contingency fund in small denominations of cash
—$1,000 is reasonable, but any amount is good. Put it in a safe place outside of
your bank, like a fireproof home safe or other similarly protected receptacle,
known only to you and one other person. In the event of a natural disaster that
cripples utilities and services, or if the economy experiences a worst-case bank
holiday scenario, you’ll want to have cash on hand. (A bank holiday is the
temporary closing of a bank in the event that its obligations exceed its resources.
It could also occur due to a natural disaster like a flood where the bank and all its
ATMs are underwater and therefore will not work.)
Credit cards—approval by phone, so leave it at home
If you’ve always been convinced that you must maintain and carry a credit card
“just in case of emergencies,” here’s what you can do to stop looking for
emergencies: Write your credit card number, expiration date, and the credit card
company’s 800 number in your address book encrypted like “Aunt Penny,” and
then leave the card at home—frozen in a block of ice. Because you don’t have it
and you know it will be a hassle to make purchases without it, your urges to buy
impulsively will be greatly reduced. But in case of a genuine emergency, you
will have the phone number and information you need to get approval over the
Credit cards—ask for a lower interest rate
If you receive an invitation to accept a new credit card with a remarkably lower
interest rate, call your current credit card company and tell them about this
competing offer. If you have a good track record with them, and they get the
message that you just might leave in favor of the more attractive rate, you could
receive an on-the-spot interest rate reduction. You’ll wonder why you didn’t call
sooner. Remember, while the interest rate may be lower, the balance transfer fee
may be huge. Read the fine print.
Credit cards—avoid annual fees
Credit card companies deny publicly that they waive annual fees, but insiders
admit the practice is often used to save valuable customers. Squawk and you just
Credit cards—pay during grace period
Credit card interest is a terrible waste of money. Pay your bills in full every
month during the grace period. If your credit card company charges a penalty or
fee for not carrying a balance, cancel that card. There are plenty of no-fee
companies who will be happy to have your business.
Credit cards—pay early in the month
Make credit card payments as early in the billing month as possible or make two
smaller payments a month if you can’t pay it all early. Most banks calculate
interest on the average daily balance. The larger the payment and the sooner in
the month you make it, the more of it will apply to the principal. It may not be
much savings at first, perhaps a buck or two, but savings grow month after
month until the account is paid off.
Credit cards—pay with check system
Pay your entire balance during the grace period so you’ll never incur interest
charges. Whenever you use your card, follow this practice. On the same day, as
soon as you walk into the house, write a check for the full amount of purchase
and deduct it from your account balance. You spent the money so it is no longer
available to you. It’s gone. As soon as the statement shows up, mail the full
Credit cards—personal identification number (PIN)
Never write your personal identification number (PIN) on your debit or credit
card or on anything that would readily identify what it is. Instead “embed” it in a
phone number under a fictitious entry in your phone book. Example: If your PIN
is 3614, make an entry of “Penelope 361-4000.” Choose a PIN that can’t be
traced, and never select a number that can be derived from the contents of your
Credit cards—plastic surgery
If you are out of control with credit cards and want to create a real turning point
in your life, invite a few close friends and relatives to celebrate your plastic
surgery. They’ll be so curious, you know they’ll show up. Of course, you intend
to cut up your credit cards, then make a personal commitment to no new debt.
Credit cards—refuse surcharge
If a store adds a surcharge to your bill for paying with a credit card, refuse to pay
it. Credit card companies like American Express, Visa, and MasterCard do not
allow venders to add a surcharge to credit card purchases.
Credit cards—register purchases in checkbook
To prevent month-end credit card statement shock and to also make sure you
have set aside enough money to pay the balance in full when it arrives, record
your credit purchases in your checkbook register in the same way you record
your checks. In the first column instead of the check number, write something
like “Visa” or “Credit” then deduct that credit purchase amount from your
current balance. If you enter your credit card purchases with red ink, they’ll
stand out and it will be easy to reconcile the statement.
Credit cards—remove name from preapproved lists
One of the problems of paying off credit card debt is the number of preselected
or preapproved credit card offers that begin arriving in the mail. In order to stop
these offers, call 888-567-8688 or write to: Equifax Options, PO Box 740123,
Atlanta, GA 30374-0123. Include your complete name, full address, social
security number, and signature. Equifax is one of the three major credit reporting
agencies. They will remove your name from the lists they provide and will also
share your request with the other two nationwide credit reporting agencies,
Experian and TransUnion.
Credit cards—safely dispose of applications
If you are not interested in preapproved credit applications or blank checks for
an existing account that you receive in the mail, don’t throw them in the trash. A
thief who finds it can actually take out an account in your name and begin
charging in your name. Always destroy applications by cutting them into bits
and disposing of the pieces in two or three different trash receptacles. You want
to make it impossible for the paperwork to be put back together. Thieves are
getting very clever these days.
Credit cards—think before you carry one
Carry a credit card only if you keep the minimum balance at, or very near, $0. If
you can’t hold the rule, keep the card hidden in your dresser. Why? Because
paying 18 percent to 20 percent on a monthly balance is crippling—a financial
shot in the foot.
Credit cards—you only need one
Accept only one credit card and make sure it has no annual fee. There’s nothing
virtuous about having an assortment of credit cards. One is all you’ll ever need.
The only thing you can do with two cards that you can’t do with one is owe more
people more money.
Credit “repair” services
Avoid credit repair clinics or “specialists” who make promises to solve your
credit report problems. There is no lawful way to repair a bad credit report or
remove a bankruptcy from your file. Don’t pay them a nickel.
Prevent newly minted paper currency from sticking together by placing bills
front to front and back to back.
Customer service—call first
If you have a consumer problem, save time by calling and asking to speak to the
service desk or manager. Explain your problem and ask what their procedure is
for fast and effective resolution. If this is not satisfactory, have a clear idea of
exactly how you would like the matter resolved.
Customer service—complaint letters
When writing a letter of complaint to a manufacturer or retailer, be clear, be
bold, be neat, be brief, be courteous, be patient, and be thorough. Don’t threaten;
simply state the situation and ask for help in resolving your dispute. Give a date
3 or 4 weeks hence, at which time if you’ve not received satisfaction, you will
know to take the matter to the next level.
Customer service—document communications on a calendar
When requesting a refund, repair, or replacement, keep track of all
communications on a calendar. Summarize phone calls and send a follow-up
letter of understanding. Don’t give up until you are satisfied.
Customer service—record a name, date, and time
Until a problem is completely resolved to your satisfaction, always ask for and
write down the name and position of the person you speak with regarding a
consumer problem. Also record the date and time of the call.
Customer service—return it for a refund
If you buy something that turns out to be faulty or unsatisfactory, don’t stash it in
a closet unless you have an unusual need for white elephant gifts. Return it. Get
your money back or at least get credit toward a future purchase. With merchants
so hungry for business these days, I think you will discover a generous return
Education—audit a class or two
If you’re not sure about a particular college or course, consider auditing a class
or two. Even the most prestigious colleges and universities will allow you to take
two or three courses without actually applying to the school. Inquire about the
Whether it’s an education for your children or for yourself, you may be able to
barter for the tuition. Offer to clean the music teacher’s house in exchange for
piano lessons or work in the preschool office. Whatever you do well may be just
what the private teacher, private academy, or university needs desperately.
Education—consider nursing or dental hygiene training
Become a nurse or dental hygienist. By majoring in one of these skills in your
undergraduate program, you will have a profession that you can develop, which
can also provide employment while attending medical or dental school.
Becoming a nurse or dental hygienist in a shortage area or in the military may
qualify you for student loan forgiveness.
Many colleges and universities across the country offer senior citizens the
opportunity to take classes and earn degrees for free or at a considerably reduced
fee. Proof of age (starting at 55 to 65) and state residency is usually required.
These senior discount programs are often not publicized, so it is advisable to call
the admissions office to inquire.
Education—reimbursement from employer
Go to work for a company that offers tuition reimbursement to its employees.
There’s nothing wrong with seeking employment with companies in locations
and with policies that fall in line with your personal education goals.
Your time spent searching, researching, and applying for scholarships for
yourself or your kids will be time well spent. Scholarships represent tax-free
Education—tuition for employees in higher education
Before you enroll at a college or university, find employment there. Employees
are usually entitled to reduced, if not free, tuition.
Home business logo—tap local marketing classes
If you are starting a home business, check with your local community college or
university. College art classes will design business logos as part of a class
project, marketing classes will often help with brochures, and photography
classes will take pictures.
Housing—building your home is a huge risk
Have your head examined before you attempt to build your own home. Unless
you are a developer or professional contractor, you are in for a few surprises, not
the least of which is that it will take twice as long as promised and cost twice as
much as estimated.
Housing—buying, house-hunting photos
Use your digital camera or phone to snap pictures of each house you’re
interested in. Attach the photos to corresponding notes and information, and at
the end of the day, rather than being confused, you’ll have a clear record of
exactly what you saw.
Housing—buying, interest on earnest money
When purchasing a home, make sure you will earn interest on your deposit
during the escrow period.
Housing—buying, worst house in good neighborhood
If you’re looking for a bargain, buy the worst house in a good neighborhood.
You can always fix up a house, but you can’t change the location.
Housing—buying or selling, document with photos
Take photographs both inside and outside of your house, and make them part of
the contract along with a list of what stays with the property after the sale. This
eliminates debate at the closing as to whether the dining room fixture was a
crystal chandelier or a bare bulb.
Housing—buying or selling, win-win negotiation
When negotiating the purchase or sale of a home, always ask for more than you
are willing to accept—even if that is beyond your level of expectation and
you’re sure they’d never agree. More than likely the other person will meet you
halfway, in essence splitting the difference. That’s what makes both of you
winners. You get more than you ever dreamed possible, and they didn’t have to
give nearly as much as they thought you expected. It’s called the “art of
Housing—mortgage interest rate reduction
Inquire if the financial institution servicing your mortgage offers an interest rate
reduction when payments are automatically paid from your checking account.
Example: A credit union recently introduced a ¼ percent reduction for any
member who authorizes automatic withdrawal.
Housing—mortgage principal prepayment, pay down
Pay more than your monthly mortgage payment in the form of a second check on
which you have clearly written “principal prepayment.” This is probably one of
the best things you can do with extra cash. And you have no unsecured debt. You
will pay down the principal more quickly, which will result in a tremendous
savings of future interest.
Housing—mortgage principal prepayment, payoff
The One-Twelfth Trick. While your mortgage should be the very last debt you
target for payoff, when that time comes, here’s a slick way to do it. At the same
time you make your regular mortgage payment each month, make a second
payment that is equal to ¹⁄₁₂ (one-twelfth) of one payment. Clearly mark this
second payment as “Principal Prepayment Only.” Do this every month and at the
end of one year you will have made the equivalent of 13 monthly payments. This
simple trick will cut your payoff time by years and save thousands in interest.
Housing—renting, rent control
If you rent, find an area with rent control. If the law is in place, you might as
well take advantage of it and enjoy the secure feeling that your rent will not be
Housing—selling, rent out before selling at a loss
If you are going to sell your home at a loss, try to hold off awhile and rent it out
so you can take advantage of the tax loss when you eventually sell. Check with
your accountant. If you can show it as an investment rather than a personal
residence, you might be able to recoup some of the loss.
Insurance—auto, collision deductible
Increase the deductible on your auto insurance and save collision insurance. For
example, if your insurance policy currently provides for a $200 deductible,
meaning you will be required to pay the first $200 of any claim, increase it to
$500 and your premiums will drop dramatically. Call your insurance agent to get
quotes on various deductible amounts. Just make sure that if you do have a
claim, you’ll be able to come up with the deductible no matter how much it is.
You’d be wise to have an amount equal to your deductible stashed in an interestbearing
account just in case, and then drive defensively to reduce the risk of ever
having to use it.
Insurance—auto, collision for older vehicle
Eliminate collision insurance on an older vehicle. Depending on its condition, an
older car may not be worth the expense of insuring for more than liability.
Conventional wisdom says that if a car is worth $2,500 or less, drop the
collision. You’d be better off putting an amount equivalent to the collision
premiums into an interest-bearing account and saving it toward another car. Of
course you should never drive without the liability coverage required by the state
in which you reside.
Insurance—auto, discounts for defensive driving course
Many states offer significant auto insurance discounts if the driver has recently
completed a defensive driving course. Call your insurance agent and inquire if
this applies in your state. If it does, sign up!
Insurance—auto, discounts for low mileage
Most insurance companies offer discounts to low-mileage drivers.
Insurance—auto, keep agent updated
Make sure your agent has all of the correct information including your teenage
son’s good driving record and 3 years’ experience. All of these things might
Insurance—auto, liability umbrella policy
Instead of carrying $1 million liability insurance on a single auto to be well
protected when participating in car pools, insuring younger drivers, and so on,
consider carrying a $1 million liability umbrella policy, which in most cases will
cover all of your cars and your principal residence. The annual premium should
be around $100 if all your policies are with the same company, if you have clean
driving records and no inexperienced operators.
Insurance—auto, rate reduction for changed driving
Be sure to let your auto insurance company know of any changes to your driving
requirements, such as switching from driving to work to joining a car pool or not
commuting to a job as you once did. Both of these events could result in a
significant rate reduction.
Insurance—don’t buy too much
Make sure you have adequate protection but not excessive coverage, no matter
what type of insurance you are considering. And by accepting higher
deductibles, you can afford better coverage.
Insurance—don’t make small claims
Too many small claims can lead to policy cancellations or premium hikes.
Insurance companies think that someone who files frequently is heading for a
Insurance—health, a must expense
Never be without health insurance. High deductibles with low premiums are
recommended if you are and plan to remain healthy, because this type of
coverage is for catastrophic events. One uninsured catastrophic illness or
accident could wipe out everything you have saved and planned for.
Insurance—health, check at school
If your family can’t afford full medical insurance for each member, consider the
school accident insurance offered to each child at the start of the new school
year. For as little as $10, your child or college student may be eligible for
insurance that would cover the normal, but expensive, childhood accidents. Most
kids’ medical bills are the result of accidents (broken bones, damaged teeth,
stitches, and other injuries), so this type of insurance makes a lot of sense.
Insurance—health, shop frequently
Shop for your health insurance coverage regularly. With many companies, the
first-year premium is much less, so switching may not be a bad idea. If your
employer offers a menu of coverage options, check them all carefully and
determine which is best for your particular situation. Never cancel one coverage
until you have another fully in place.
Insurance—home, discounts for security systems
Ask about homeowners’ insurance discounts for security systems, smoke alarms,
and good driving records. Always ask! The agent or company may not volunteer
Insurance—home, mortgage: buy life insurance instead
Typically overpriced, mortgage insurance (not to be confused with private
mortgage insurance called PMI, which is completely different) is like life
insurance because it pays off your remaining mortgage balance in the case of
your demise. But who says your spouse or heirs would want to apply insurance
proceeds to pay off the mortgage, which may be the lowest interest debt you
leave them? If you have this type of coverage, they’ll have no choice. It is far
better to buy regular term insurance. It’s much cheaper and leaves your heirs
with more options.
Insurance—home, mortgage: cancel private (PMI) coverage
Private mortgage insurance (PMI) is usually required to protect the lender
against the possible default of a buyer who enters into a mortgage with less than
20 percent down payment. In most situations PMI can be canceled once the
equity reaches 20 percent either by paying down the mortgage or the property
appreciating in value. But it will not happen automatically. You must call and get
the ball rolling. Expect to be required to prove the market value of your home
and that you now have at least 20 percent equity. PMI is expensive, and you
could be paying $1,500 or more each year in premiums. Do whatever you must
to cancel it if you qualify. PMI does not protect the borrower in any way. It’s for
the lender all the way.
Insurance—home, renter’s coverage a must
If you rent, buy a tenant’s policy. This is a must. Landlords are not responsible
for your belongings in case of disaster.
Insurance—home, replacement value for possessions
Add a replacement-cost rider to renter’s or homeowner’s insurance. It may cost a
little more, but in case of a claim, you will be glad you added the rider. Without
it, the company will depreciate the value of every item, and you will be a big
Insurance—life, adjust when dependents change
Cut back on life insurance as your dependents become independent. Providing
for a spouse alone costs less than a spouse and eight kids.
Insurance—life, avoid TV and mail offerings
Never buy life insurance from television or direct mail ads. This is a sleazy
marketing ploy. The premiums are at least 400 percent too high for the coverage,
and the exclusions are mammoth.
Insurance—life, for kids
Don’t buy life insurance for kids. It makes absolutely no sense. Insure only wage
earners (including stay-at-home moms), whose untimely demise would create a
Insurance—life, for singles
If you’re single, buy life insurance only if someone is financially dependent on
you and would suffer an undue financial hardship if your income were to
suddenly disappear. Most singles have no reason to carry life insurance.
Insurance—life, travel coverage not necessary
Don’t pay extra for travel insurance. Statistically, it is highly unlikely you will
die in an accident, and even if you do, the basic life insurance you carry should
Insurance—pay premiums annually
If possible, pay insurance premiums annually. Avoid the added costs for monthly
or quarterly billing.
Insurance—take higher deductibles
In essence, you partially self-insure by being willing to take the chance that you
won’t get sick, you won’t crash the car, and you won’t be burglarized. The
higher the deductible, the lower the premium. The insurance company actually
compensates the customer who is willing to share a great portion of the risk.
Investing—guidelines for beginning investors
As a beginning investor, any plan you consider should have all the following
features or you run a great risk of failure: (1) The investment must be simple to
understand and easy to follow. (2) It must take very little time to administrate.
(3) It should not cause you stress or anxiety. (4) It must not change your lifestyle
or cause disharmony in your home. (5) You must be able to handle the
investment entirely on your own. (6) It must have the advantage of liquidity
(getting your money back quickly in the event of an emergency). (7) It must
work equally well for the person with very little to invest as well as the wealthy
Investing—mutual fund instead of lottery tickets
Instead of throwing away $2 a week on lottery tickets for the next 50 years,
invest that money in an aggressive-growth mutual fund. Don’t even think of
saying that such an investment is too risky. Investing your money in the lottery is
the ultimate risk, and for all practical purposes carries a high-percent guarantee
that you’ll lose your money. Remember: The lottery is a tax on the ignorant.
If you hire a lawyer on contingency (a percentage of the settlement, plus
expenses), make sure the expenses are deducted from the total first. Example:
Say the settlement is $15,000, and the attorney cut is a third plus $3,000 of
expenses. Deduct the $3,000 first, and then pay the lawyer a third of the balance,
or $4,000. If you pay the lawyer first, you’ll have to pay a third of $15,000, or
$5,000 plus the expenses.
Lending money—to friends and family
Don’t lend money to people you know. If you decide a loan is in order, make
sure you can consider it an outright gift. If you happen to receive repayment, it
will be an unexpected bonus.
Lending money—when someone asks
If someone asks you for a loan, say you were just going to ask him for one. That
usually ends the conversation.
Avoid overdue fines at the library. Most libraries renew books online or over the
Phone—ask for credit for wrong long-distance dial
Always ask for credit immediately whenever you dial a wrong long-distance
number. Don’t be embarrassed. It’s routine. Just call your service provider and
make a very quick report.
Phone—ask for credit with long service interruptions
If your phone service is interrupted for more than 24 hours, ask for a credit.
Phone—block making long-distance calls
If your long-distance bill is really out of control, and you are determined to get
that expense under control, take drastic measures. Instruct your phone company
to block all long-distance calls. Now you will be able to place only local, tollfree,
and 911 phone calls. And if you absolutely must call long-distance, use a
prepaid calling card, or check your long-distance minutes on your cell phone
Phone—time your calls to save
Put an egg timer by the phone as a reminder to hang up before you talk yourself
Record keeping—business information
When you write a check to a company you haven’t done business with before,
jot down the address and phone number in your checkbook register so it’s handy
in case you need to check on your order.
Record keeping—documents in safe or freezer
Keep wills, insurance policies, and other important papers in a fireproof safe, or
wrap them in plastic and put them in a sealed container in the freezer. They will
be easily accessible and protected in case of fire.
Record keeping—documents on CD
Be prepared by scanning your family’s important documents—birth certificates,
passports, Social Security cards, insurance policies, property deeds, car titles,
immunization records, pet medical records, school transcripts, business licenses,
education degrees, and tax returns. Now burn the files onto two CDs. Keep one
in a safe place and have a trusted friend or relative in a different state (your point
person) keep the other disk.
Record keeping—documents tucked away
Roll your important papers and store them in cardboard tubes. They can be
tucked away and will stay crease-free.
Record keeping—filing system for the family
Establish a color-coded family filing system. Use green folders for financial
statements, red folders for kids’ school papers, blue for car and home documents,
yellow for medical papers, and orange for personal items. You’ll know right
away where your financial paperwork is.
Record keeping—filing system for sorting
Set up temporary finance files labeled “To be filed” and “To be tossed.” In the
first, place items that need to be saved permanently or long-term for taxes, and
so on. In the second file, put dated material that can be tossed. Once a month,
file the first and dump the second.
Record keeping—home contents on video
Film your home inside and out for insurance records. In case of a fire, you need
to have evidence of the expensive wall coverings and decorator window
coverings. While you are taping, narrate aloud, describing your home’s contents
in detail. Keep DVD in a safe-deposit box or transfer the digital files to a disk.
Make sure the date is well documented. Film again every few years or when
considerable changes are made.
Record keeping—wallet contents photos
Make a photocopy of everything in your wallet. Now if you lose your wallet,
you’ll have a record of the important information in it and can move quickly to
have things replaced or canceled.
Buy a large, three-ring binder and a supply of plastic pocket inserts. Whenever
you purchase a product, whether it’s an appliance, lawn tool, or toy, staple the
receipt to the owner’s manual or warranty paperwork and file it away in one of
the pockets. Now whenever something stops working or has a problem, you’ll
have the paperwork and all the information at your fingertips, including the
customer service number. Or you could scan and retain these documents
electronically, as well. Always call—even if the warranty is expired—explain
the situation, your purchase details, and then ask one simple question: What can
you do for me?
Saving on expenses—discount for paying cash
Request a discount whenever you pay cash in a store that honors standard bank
credit cards. Since they have to pay from 3 to 7 percent of the bill to the card
company on a credit purchase, they should be willing to give you at least part of
the difference in the form of a discount. It won’t always work, but it’s worth a
try. If the owner or manager thinks you are going to use credit and at the last
minute you inquire about a discount for cash, you’ll be more successful.
Saving on expenses—discount on newspaper subscription
If you subscribe to a newspaper, check to see if discounts are offered for paying
an entire year’s subscription in advance. Some papers offer a 10 to 15 percent
discount. If you find you don’t read the newspaper on the weekdays, change
your subscription to Sunday only. You won’t feel guilty, and you’ll save a
Saving on expenses—garbage service
If neither you nor your neighbor regularly fill your garbage cans, ask if the
family is interested in splitting garbage collection costs. Check to see if your city
or county ordinances prohibit this. Many don’t.
Saving on expenses—lunches out
Here’s a reasonable and practical way to handle the high cost of eating lunch out
every day. On Monday take $25 cash and put it in an envelope to be used only
for your lunches. If it’s gone before Friday, you’ll have to pack your lunch.
Saving on expenses—mailing books
Use fourth class or “media mail” when shipping books through the US Postal
Service. The savings are amazing.
Saving on expenses—mortgage escrow adjustment
Ask for a refund of any excess funds your mortgage lender is keeping in an
escrow account. One woman discovered that her bank was collecting $100 a
month more than necessary to cover anticipated property tax and insurance bills.
When she asked that her monthly assessment be reduced to ¹⁄₁₂ of the total
annual bill, the bank quickly agreed and that reduced her monthly expenditure.
She also received a refund for the more than $500 excess amount that was in the
fund. You have to ask.
Saving on expenses—“won’t be undersold” savings
Even though the store where you made a recent purchase doesn’t advertise a “we
won’t be undersold” policy, always take a chance. If, say, the day after you make
the purchase, you notice a sale by their competitor and the same item is offered
at 50 percent off, take your purchase back—along with the competitor’s ad—and
simply ask what they can do for you. You’ll be surprised what companies will do
to keep a customer.
Make arrangements with your employer to automatically deposit a certain
percentage of your paycheck directly into your savings account and the balance
into your checking. What you don’t see you won’t miss, and this is the most
painless way to start saving.
Savings—bills instead of change
If you don’t like dealing with change jars, commit to paying yourself a dollar
every time you make a purchase. Think of it as charging yourself a service fee
for shopping. You’ll think twice about unnecessary stops at the mall and end up
saving a lot in the bargain.
Savings—coupon savings back in cash
Many banks are opening convenient branch offices in major grocery stores. If
this is true for the supermarket you frequent, open a savings account. Now when
you buy groceries, write the check for the total before coupons are subtracted.
Ask for your coupon savings back in cash (the equivalent of writing a check for
more than the purchase amount, or using a debit card with cash back), and make
a deposit to your savings account on your way out with that cash. Also, make a
point of writing your check for more than the purchase by $5 to $10 if you can
manage. Stash that cash in the bank as you leave too. It’s a painless and
convenient way to save.
Savings—create change to save
When you write a check for groceries, round it up and take the difference in
change and deposit it each evening into a change jar you have at home.
Example: If the bill comes to $33.02, write the check for $34 and stash the 98
cents in change. You’ll be surprised by how much change you’ll accumulate in a
Savings—creative methods to save what you’ve saved
If you find yourself borrowing back the money you’ve determined to save, here
are some tips for how to put some space between you and the stash: (1) Keep
your savings and checking accounts in different banks; (2) open a passbook
account, which will limit your access to the funds; (3) open your savings account
in a bank in another city and make all of your deposits by mail; (4) establish an
account that requires two signatures to withdraw.
Savings—don’t spend coins
Collect loose change by making a personal rule not to spend it. Make it a habit to
dump your pockets and purses every night into one collection receptacle. You
won’t miss the change, and you’ll be amazed by how much you can save.
Savings—IRA contribution early in year
Try to contribute to your individual retirement account (IRA) as early in the year
as possible. The difference between making your contributions each January 1
rather than December 31 of the same year could spell thousands of dollars of
additional earnings in your account over the decades.
Savings—make payments to yourself after debt payoff
As you pay off a credit card or other loan, keep making the same payments into
your savings account instead of sending them to the lender.
Savings—mileage reimbursements for a new car
Each month submit your expense report for the work-related miles you put on
your car. Once you receive the reimbursement check, stash it into a special
account for the sole purpose of saving for a new car. Usually the gasoline costs
required to drive for job-related purposes can be absorbed into your regularly
monthly spending. This is a great way to force yourself into a savings plan.
Once a month, or whenever you pay your bills, write a check to deposit in your
money market fund or your savings account. If you can’t start with 10 percent,
start with less and increase the amount each month. Or use an automatic savings
plan—let the bank take your savings out of your paycheck. You won’t miss what
you don’t see.
Savings—reimbursements into savings account
When you are reimbursed for travel or other out-of-pocket expenses, save the
money, and put it in your savings account instead of your checking account,
where it will just disappear.
Savings—US savings bonds interest
Here’s how to earn double interest. Buy US Series EE Savings Bonds on the last
day of the month with money that has been earning interest in another account
during the month. The bond starts accruing interest as if purchased on the first
day of the month. Example: Buy a bond on June 30. When you receive the bond
about 21 days later, it will be recorded as of June 1.
Open school savings accounts for your kids. Most banks offer these no-fee, nominimum
accounts for kids. Teach them how to fill out deposit slips and make
their own deposits. These accounts usually have no minimum balances or service
Social Security—know what you have
Call the Social Security Administration at 800-772-1213 for a “Request for
Earnings and Benefits Estimate Statement” or visit their website at
www.SSA.gov. After you mail back the completed form, you will receive a
statement showing all the money you have paid into Social Security as well as a
personalized estimated monthly benefit upon retirement. If there are errors, such
as they didn’t credit you 1 year or they have you earning the wrong amount, they
can be corrected but only if you report them.
Taxes—hardship extension, IRS Form 1127
If you have an undue hardship such as long-term unemployment, prolonged
illness, disaster, or inability to borrow, and can’t pay your federal taxes when
they are due on April 15, call the IRS hotline (800-829-1040) and request Form
1127, “Application for Extension of Time for Payment of Tax Due to Undue
Hardship.” By filing this form, you will have until June 15 to pay without
penalty. If the IRS says they’ve never heard of this form, be persistent. Insist on
speaking with a supervisor. It does exist, it is legal, and you have every right to
file it if you qualify. This is different from the form “Extension to File Taxes” in
which case you must still pay any taxes owing on or before April 15.
Taxes—lower your withholding
Don’t give the Internal Revenue Service a free loan. If you receive a large refund
each year, you’re losing interest on the money. It pays to lower your withholding
and bank the difference. Your employer’s personnel office can tell you how to
Taxes—prepare for tax deductible reporting
Keep a separate checking account for tax deductible expenses, and sort them
every month by category, such as charitable contributions and medical and
dental expenses. By year’s end you’ll be way ahead in the tax preparation hassle.
Taxes—property tax evaluation
Challenge your property tax bill. If the value of your property has declined, you
might be entitled to a reassessment of your taxes.
Utilities—good customer perks
Usually if you have been a good customer of the utility companies (gas, water,
electricity, phone) for at least a year, you can arrange to have your deposits
refunded or credited toward your account. You may be able to get interest, too, if
Utilities—home energy audits
Request a home energy audit from your electricity or gas companies. Typically
these audits are free and will help you discover where all that energy is going.
Word to the wise—choose to be content
Be content with what you have. As much as possible, do not spend your life
scheming and planning to get more things.
Word to the wise—company ratings
Make sure you are dealing with a highly rated company of B+ or better. These
days the smaller, lower-rated companies are dropping out regularly. Better safe
Word to the wise—D-E-B-T reality
Convince yourself that unsecured debt is a four-letter word. As soon as you
teach that to yourself, teach it to your children. Banish unsecured debt from your
Word to the wise—don’t carry extra cash
Take along only as much money as you expect to need each day. Impulsive
purchases are difficult to make when you have no dollars to spare.
Word to the wise—don’t pay credit with credit
Never pay your credit card bill with a credit card. Just don’t.
Word to the wise—keep a money diary
Keep a money diary by writing down every expenditure, no matter how small.
Not only will you know where the money goes, but you will also automatically
spend less because no one wants to write down lamebrain purchases.
Word to the wise—“on sale” doesn’t guarantee savings
Myth: Buying things on sale is a great way to save money. Truth: Buying things
on sale is a way to spend less money, but it has absolutely nothing to do with
Word to the wise—save money no matter what
Regardless of how much in debt you are or how little money you make, saving
something consistently in a special place or account is going to change your
attitude. Saving even a few dollars each week helps fill the emptiness that drives
some of us to spend. Something of everything you earn is yours to keep.
Word to the wise—skip extended warranty coverage
As a general rule, extended warranty coverage on anything is a waste of money.
Modern-day appliances, automobiles, and electronic equipment will operate well
during the first year or 3, or whatever time the extended warranty covers. And
most of these items come with some kind of a warranty anyway. You’d be better
off taking that same amount of money and putting it into an interest-bearing
account. That way when the item doesn’t break down, you will not have thrown
your money down the drain.
Word to the wise—spending rule of thumb
Stop spending money you do not have in your possession—today. This means no
charging on credit cards, no borrowing from friends or relatives. If that sounds
too radical and impossible, agree not to incur any debt just for today. Taking it
one day at a time is really much easier.
Word to the wise—start giving
Every life well lived should be giving back regularly; then that life will have
meaning. When we are the neediest is when we should be giving the most.
Financial bondage is a dead giveaway for an out-of-balance life.
Word to the wise—stop spending more than you have
Stop spending more money than you have. Consciously begin today to reduce
expenses so that your outgo never exceeds your income.
Word to the wise—stop trying to impress others
Stop trying to impress other people. If you can stop spending according to
demands put on your life by others (through peer pressure or the necessity to
keep up), you will see a tremendous difference in the way you spend.