Pinching Pennies and Saving Dollars
We have all seen countless articles on how we can save money each month by doing (or not doing) various things. Cutting out the occasional latte at Starbucks or renting videos from Redbox rather than going to the movies are all ways to trim your budget. However, while you may save some money in these areas, you may be overlooking some other areas that could make a bigger impact on your bottom line.
First, one area to always evaluate is insurance. The major areas to examine are automobile, health, and home insurance. Many people buy an insurance policy and then forget about it. They go years with the same company and neglect to realize there could be cheaper options out there. It’s easy to get the declarations page of your policy which shows your exact coverage and then send it to other insurance agents for a price quote. Often times this can even be done over the internet.
A second option that many people do not bother to take advantage of is flexible spending accounts at work. A flexible spending account allows you to pay for out of pocket medical related costs with pre-tax dollars. On average you probably pay 40% of your income to state and federal taxes. If you put $1000 in a flexible spending plan, you are decreasing your taxable income by $1000. This saves you $400 in taxes every year. Plus, most people are going to fill out the paperwork and fax in the information to the flexible spending plan administrator while at work, so you are not out any of your own time.
A third option where you can really save dollars is in the automobile you drive. If you drive a late model (older) car, you can save in several areas. Usually you can reduce your payment or maybe not have a payment at all. This is a huge advantage to your bottom line. Secondly, you pay personal property tax on your vehicles - so if you drive an older vehicle it is worth less and you have to pay fewer taxes on that vehicle. This is not the 1970s where if a car had 100,000 miles it was ready for the junk yard. Cars today should last 150,000 miles with almost no issues. Driving a car that is 10 years old does not mean you are poor, it means you are smart.
There are other ways to put money in your pocket depending on your situation. It’s always nice to step back from time to time and evaluate your financial position and creatively find ways to put more money in your pocket. Pinching pennies is always a good thing, but you do not want to be throwing dollars out the window at the same time.
We have all seen countless articles on how we can save money each month by doing (or not doing) various things. Cutting out the occasional latte at Starbucks or renting videos from Redbox rather than going to the movies are all ways to trim your budget. However, while you may save some money in these areas, you may be overlooking some other areas that could make a bigger impact on your bottom line.
First, one area to always evaluate is insurance. The major areas to examine are automobile, health, and home insurance. Many people buy an insurance policy and then forget about it. They go years with the same company and neglect to realize there could be cheaper options out there. It’s easy to get the declarations page of your policy which shows your exact coverage and then send it to other insurance agents for a price quote. Often times this can even be done over the internet.
A second option that many people do not bother to take advantage of is flexible spending accounts at work. A flexible spending account allows you to pay for out of pocket medical related costs with pre-tax dollars. On average you probably pay 40% of your income to state and federal taxes. If you put $1000 in a flexible spending plan, you are decreasing your taxable income by $1000. This saves you $400 in taxes every year. Plus, most people are going to fill out the paperwork and fax in the information to the flexible spending plan administrator while at work, so you are not out any of your own time.
A third option where you can really save dollars is in the automobile you drive. If you drive a late model (older) car, you can save in several areas. Usually you can reduce your payment or maybe not have a payment at all. This is a huge advantage to your bottom line. Secondly, you pay personal property tax on your vehicles - so if you drive an older vehicle it is worth less and you have to pay fewer taxes on that vehicle. This is not the 1970s where if a car had 100,000 miles it was ready for the junk yard. Cars today should last 150,000 miles with almost no issues. Driving a car that is 10 years old does not mean you are poor, it means you are smart.
There are other ways to put money in your pocket depending on your situation. It’s always nice to step back from time to time and evaluate your financial position and creatively find ways to put more money in your pocket. Pinching pennies is always a good thing, but you do not want to be throwing dollars out the window at the same time.