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4 ways leap year can save you money

Feb. 29 comes around once every four years -- along with some novel ways to save cash.

By MSN Money Partner Feb 28, 2012 9:28PM

This post comes from Quentin Fottrell at partner site SmartMoney.

 

SmartMoney on MSN MoneyA leap year isn't just an astronomical sore thumb. It's also an opportunity to snag some deals, chart the financial year ahead to avoid making costly mistakes, and party on borrowed time.

 

It may not feel like it, but technically Feb. 29 means a free day of cable, rent, car insurance or Netflix -- services with monthly rates that do not increase as a result of the bonus day. On the downside, salaried workers earn a tiny fraction less per day in a leap year.

 

The quadrennial holiday is also a good excuse to change one's spending habits, experts say. Gail Cunningham, spokesperson for the National Foundation for Credit Counseling, advises doing without a guilty pleasure, such as a manicure or shoe shine, for 29 days. "Of course, by the time you finish, it'll be a habit that you won't miss, so you'll save money all year."

 

For those who see Wednesday as a fun date night, she says, "Go on the town, but commit to only spending $29 and see how much fun you can have for that amount."

 

Here are four ways to make Feb. 29 pay dividends:

 

Seek out some leap year travel deals

It's a good marketing gimmick for companies, but there are some leap year deals worth considering -- from airlines to hotels and resorts. Denver-based carrier Frontier Airlines is offering a leap year sale with $60 tickets one-way on selected domestic flights and a round-trip ticket is not required. Of course, like most airline offers, seats are limited for the deals and, for leap year deals, the tickets must be purchased by 11:59 p.m. EST on Feb. 29. Plus, a $20 fee may be charged each way for the first and second pieces of checked luggage.

 

TravelZoo.com also has a range of holiday, hotel and restaurant deals, including normally $104 tickets to the Chicago Symphony Orchestra for just $29 and 50% off $59 tickets for a SolVista Basin ski resort in Colorado. For families, Disney's Magic Kingdom near Orlando, Fla., and Disneyland in Anaheim, Calif., will stay open for 24 hours straight from 6 a.m. on Feb. 29. (Post continues below.)

Have your girlfriend propose marriage

Feb. 29 is one day where it's deemed more socially acceptable -- even in the 21st century -- for a woman to propose to her boyfriend without blushes. It's a centuries-old tradition (thank the Scots), but one that could help men save thousands of dollars. "It's hard for a woman to do this, but there are little ways for a guy to hint that he'd like it," says Vicky Oliver, a relationship expert and author. A man could tell his girlfriend that he admires strong, modern women, Oliver says.

 

This could be a possible win-win for men and women: The men save the estimated $5,200 the average American spends on an engagement ring -- according to a recent survey of more than 10,000 brides by The Knot.com -- and women get to plan for the future with or without their commitment-phobic boyfriend. In theory, they could go straight for the wedding band. Or not.

 

"She should buy him the ring," Oliver says. "It's a great and adorable tradition that should be maintained." One tiny caveat, Oliver says: "It would be really terrible to have her take a knee and have him say no."

 

Invest in the stock market

Leap years, which coincide with U.S. presidential elections, tend to yield positive returns for investors. The S&P 500 has only declined three times on a leap year since 1928. And the average leap year return for the past four decades is 6%.

 

Most pros, of course, don't recommend betting solely on the leap year. After all, the last one marked one of the biggest exceptions to the rule: In 2008, the year of the mortgage crisis, the S&P 500 plummeted 37%. And aside from the excitement an election year brings, experts say there's no clear explanation for this leap year leap. But with the U.S. economy generally improving, and stocks in the midst of a two-month rally, some advisers are shifting more client money to the market.

 

As for the day itself, Feb. 29 is traditionally a so-so day for the S&P 500, which declined in 10 out of 16 occurrences since 1945, according to Sam Stovall, chief equity analyst at S&P Capital IQ.

 

An extra day to get your financial house in order

If only we had more time. Well, fear no more. Cunningham says the leap year could be an important psychological step to forget about shopping, sort out personal finances, and sift through those receipts in the shoe box under the bed. That is, do what the woman who wants to propose does -- take the power back.

 

"Those who use the extra time afforded by leap year to accomplish these financial moves will wake up March 1 with a well-earned sense of accomplishment," she says. The logic: The more time spent organizing and filing expenses, the more money will be saved.

 

She also advises gathering all 1099s, W-2s, and receipts related to eligible deductions, reviewing all insurance policies and making a note of their expiration, as well as paying bills. Due to the payroll tax cut, Americans now have extra money in their paychecks, she says, so put time aside to maximize the benefits. "The best use of this money could be increasing the retirement contribution at work," she says.

 

If your company doesn't offer a 401k, Andrew Meadows, consumer and brand ambassador at the Web-based consultancy The Online 401k, suggests using Feb. 29 to write Human Resources and suggest they adds one.

 

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