Some consumer problems can be daunting and discouraging. Digging out from a pile of credit card debt can take years. Saving for retirement is a slow process. But there are a lot of things you can do right away to make an immediate difference in your finances.
The following tips will help put more money in your pocket within days. Then you will have more money to pay off debt, save for the future or take that vacation you’ve always wanted to but couldn’t afford.
Day 1: Reduce your withholding at work
Do you get a tax refund every year? That means you’ve made an interest-free loan to the government and your money has been working for them — not you — all year long.
People try to justify their tax refunds by saying it’s a way to force themselves to save money. Truth is, there may be a better way to accomplish the goal: Let’s say you typically get a refund of $1,200 every year. Try reducing your withholding at work by $100 a month and have your bank or credit union automatically transfer that $100 each month into a savings account.
You never see the money, so you never miss it. But the end result is that you’ll build your savings and earn interest all year long. Use the IRS Withholding Calculator to avoid having too much or too little federal income tax withheld from your pay. Then talk to your HR department at work to put your plan in action.
Day 2: Search for unclaimed money in your name
There could be unclaimed funds from a variety of sources — old money from a bank account, brokerage house, insurance policy or company stock — just sitting out there in your name!
Go to MissingMoney.com and type in your name to see if you have money you’re due. Include the state you live in and the headquarters states of all your previous employers in your search. In addition, always search Delaware and Connecticut, as most stock and insurance companies are based in those two states.
Day 3: Check all of your monthly statements line-by-line
Too often, people just get bills of all kinds charged to their credit card and never see a statement. Don’t be one of them! Get hold of those monthly statements and scrutinize them line-by-line.
Cell phone bills can be almost impossible to understand, making phony cram charges a real possibility. Look for line items with deceptive terms such as “Premium Content” or “Direct Bill Charge” (sometimes referred to as “DBC” on your bill.) If it’s something you didn’t agree to, call up your provider and get your money back.
Day 4: Raise the deductible on your insurance
The typical auto insurance customer can save up to $500 a year by bumping their deductible up from $250 to $500. That savings jumps on average to $1,000 annually if you make the leap to a $1,000 deductible.
By raising your deductible, you’ll pay less in premiums, but more importantly, you’ll reduce the risk that your insurer will cancel your coverage because you made too many claims. In particular, homeowners insurance can be used only in the case of a catastrophic loss. It’s a “use it and lose it” proposition.
One final word about car insurance. If you have an old “beater” car that’s of little value, it may be time to have liability only (not collision and comprehensive) on your policy if the cost of full coverage is greater than 10% annually of the car’s value. You can determine your vehicle’s value at KBB.com, NADA.com or Edmunds.com.
Day 5: Lower your student loan payment
Paying too much in student loans? There are a variety of repayment plans that can help you lower your monthly payment.
Income-based repayment (IBR) plans are available to those with federally guaranteed student loans such as Stafford loans and Grad PLUS loans. Under this new repayment program, your monthly payment is based on your current income and family size. In fact, it could be an unprecedented zero dollars!
The IBR plan is something you have to apply for; a deal like this won’t simply come to you! You want to start by contacting the lender or lenders who hold your student loan(s) for more details on the application process. IBRInfo.org is a great non-profit info site that can help you navigate your repayment options.
Day 6: Get help paying for specialty medications
What do you do if you have an illness that requires special medicine and you can’t afford it despite having insurance? One pharmaceutical executive turned philanthropist has set up a charity called TheAssistanceFund.org to provide co-pay assistance that can make the difference between life and death for some patients.
This non-profit helps pay for some medications by footing a significant amount of the out-of-pocket for insured patients. Best of all, TheAssistanceFund.org tries to approve people for assistance within 24 hours because they know time is of the essence.
Day 7: Get a free cell phone plan
Truly free cell phone service is finally here thanks to an ad-supported wireless service called RingPlus.net. If you’re like me, you’re almost always on wireless, so it’s possible to get away with a smartphone plan that offers 1,000 talk minutes, 1,000 texts and 500 MB of LTE data for absolutely FREE! More details here.