Need extra money? Here's how to find it
Re-examining your major expenses can pay off
are a number of ways to stretch your dollars simply by rearranging your
finances. Here are 11 tips to help you find some extra money.
Change your withholding tax. If
you typically receive a tax refund each year, ask your employer to
reduce the amount of tax withheld from your paychecks. I know, I know.
You like getting those fat checks at tax time each year. But in reality
it's an interest-free loan to the government. Your money is much better
in your own pocket, thank you very much.
also applies to other loans. If you happen to be drowning in your
finances, you can call creditors and explain your situation, and they
can make concessions for you. If the agent you are talking to can't do
it, politely ask for the manager, who has more clout for granting rate
Refinance your car loan. If your car is less than five years old, and you got your loan through a dealer, you may be able to do better. A Web site like Bankrate.com can help you find the best loan rates in your area, and Kelley Blue Book will give you a dollar value for your car.
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 monthly payment be nice? You can save up to $150 a month by consolidating your student loans.
each lender you have a student loan with and explain your situation and
desire to consolidate. Some will offer you rate discounts after you
make payments for a certain period of time, or discounts for paying
with preauthorized 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 a 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 private mortgage insurance. Not
to be confused with mortgage life insurance, PMI 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
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
Save on utilities. Call your utility company to
see if it has programs that allow you to earn discounts. Sometimes use
of certain appliances or techniques can reduce your bills.
Change the way you pay for child care. Although this expense rarely changes, you can change how you pay for it.
Many employers have a dependent care spending account, which allows you
to pay for child care with pretax 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.
Reduce the cost of 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.
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.
Save on 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. It is very important that you get your new policy in hand before canceling the old one, just in case something is found in your medical records that leads to higher rates or a refusal of coverage.
Examine your 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 premium goes to the cost of insurance, and the rest goes 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. Be sure to consult a professional about all the ramifications before choosing this option.
The trick now is to use all of the money you've found constructively.
In some cases you have taken on more risk -- increasing your insurance
deductibles or reducing your withholding tax -- leaving you vulnerable
to possible financial hits later on. Be sure you document the money
saved, and apply it directly to other areas of your finances that need
it: debt reduction, savings or an emergency fund.
Other articles of interest at Wise Bread:
- Getting around the guidebook: Techniques for researching your trips without spending a fortune
- How to deal with nasty debt collectors
- How to save 54 cents per gallon on gas
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