Five ways to free up some extra money quickly
Generally during the summer, people would rather focus on their tans, camping, barbecuing, or lounging around by the pool than thinking about personal finance.
When I think of summer, I think of summer camp and all the fun projects and crafts we did as kids. Along the lines of summer camp, I will be sharing with you quick and easy financial “projects’ to help you spring/summer clean your finances.
Follow these tips and by the end of summer not only will you have a great tan, you will have your financial house in tip-top shape.
Five Quick Ways To Free Up Cash
1. Review Your Health Insurance
Review your employer-sponsored health insurance; many employers offer a menu of options to their employees. However, recent research suggests that employee tend to pick the more costly options, even if the plan doesn’t provide any additional benefit over a lower cost option. In fact, according to the research, many employees pay up to 40% more than necessary.
Many employees are unfamiliar with the benefits their employers offer and may be missing out on valuable incentives like funding their Health Savings Account (HSA). It can pay to sit down with the individuals at Human Resources and ask them to explain the benefits. Most employer-sponsored plans will have a representative that services the account, and they should be able to answer questions. Should you need more help than that, it could make sense to talk with an outside financial advisor.
2. Shop For Property and Casualty Insurance
Review your home, auto, and umbrella insurance policy. Periodically, review your insurance; shopping competitors can pay huge dividends. I know spending an afternoon on the phone calling around to all the companies does not sound like a lot of fun, however, saving up to a $100 a month can take the sting out of the time you spent. Additionally, there are several websites and brokers online that can run multiple quotes from competing companies to help you find the best deal.
Do you have a couple speeding tickets on your record? You may have decided to just pay the fine instead of taking the day off from work and fighting the ticket. That ticket (or two, don’t worry I am not judging) might be driving up your insurance premiums. Many times, you can appeal the ticket and negotiate a non-moving violation to clean up your record. Also, ask your insurer if they offer discounts for taking safe driving courses.
Some insurance companies base rates in part on credit rating, if you have been cleaning up or establishing your credit and have seen a nice improvement, call your insurer and ask if they can lower your rate.
Never hurts to ask!
Tip: Ask the Insurance broker if the company offers discounts based on alumni associations, professional/trade groups, or club affiliation. Being a member of a group could save you 10 percent or more, and if you not already a member it could pay to become one.
3. Reduce Life Insurance Costs
You should periodically review your life insurance policies. Maybe you picked up coverage when the kids were younger and you no longer need the coverage. Did you lose weight or quit smoking? Often an insurer will change the rating status of a life insurance policy if the insured has given up smoking for more than two years or if their health has improved.
Once a year you should call your insurance company and ask for an enforce policy illustration. This illustration will model out how the policy is performing, and you can use this information to compare the policy with offerings from other insurance companies to see if there are lower costs options or policies with better benefits.
Tip: If you decide to apply for a new insurance policy and the company orders a psychical or blood tests, ask that you be sent a copy of the results and keep them with your medical records.
Once a year you should call your insurance company and ask for an enforce policy illustration. This illustration will model out how the policy is performing, and you can use this information to compare the policy with offerings from… Click To Tweet
4. Fix Your Credit
Savers should review their credit and fix any inaccuracies. If you have negative information on your report such as missed payments, ask the lenders if they would consider a good faith removal of the offending remark. If you’re successful in improving your credit rating, go back to your lenders and ask if they will refinance your debt at lower rates. Remember the goal is to save money, try not to add to the balances or extend the term.
You will see some guides online about how to request a good faith removal on your credit report. There are some sample letters online. Try to avoid the temptation to use a boilerplate form. The best course of action is to write a personal letter, explain why the payment was late, why it is important to for you to improve your credit, and what steps you’re taking to ensure you won’t be late again in the future (hopefully).
5. Deal With The Real Bullies
A pet peeve of mine is the tired cliché that the only thing standing between people and financial success is their addiction to morning lattes. Sure, frivolous lattes can wreck a budget, however, there is a bigger budget-busting bully looking to steal our lunch money; the IRS.
Do not give up your morning coffee before reviewing your income taxes. Taxes can consume 20 percent or more of your income; I doubt anyone spends that much on coffee. An hour or two planning ahead on taxes can save you thousands. Unfortunately, everyone waits until tax season (end of January to April 15th) to think about taxes. I can’t blame them: taxes are not fun.
Savers should look ahead, to any tax credit or break they expect to use in the upcoming year and determine what is necessary to qualify and plan ahead. You don’t want to find you missed the deadline to fund your 401k and therefore missed qualifying for the saver’s credit by a few dollars. Remember if you are buying health insurance under the Affordable Care Act the amount of your premium tax credit is based on modified adjusted gross income (MAGI) planning ahead could not only save you in taxes it could reduce health care costs.
Note. Every year during tax time I see a news article about whether or not you should pay your taxes on a credit card, or what to do if you can’t pay your taxes. Don’t let that be you. Plan ahead.
Now is a perfect time to plan ahead for your 2018 taxes. You should estimate your expected income, and look to see if you will owe money in taxes. With just over 7 months left in the year, there is plenty of time left to budget and/or take corrective action.
Spending time on your finances can spark a lot of questions. I will be launching a new series, 5-minute financial lessons. In this series, I will be answering any financial question you have that may be holding you back from financial success. Please fill out the contact form and submit your questions. I will select one to answer and post on the blog.
I look forward to hearing from you!