By Michael Axe
When it comes to managing our money – like saving more and spending less – there’s always room for improvement. Our employees help members every day with money-related questions and issues, so the team at Financially Empowered asked them for their favorite money tips, tricks and hacks. Here’s what they had to say:
- Use credit cards online. Avoid paying for online purchases with a debit card. If your card information gets compromised, hackers can more easily get access to the money in your checking account. Instead, use a credit card and take advantage of Visa’s Zero Liability policy if you see fraudulent charges on your account.
- Earn rewards on everyday purchases. Use your Arizona Federal Visa Platinum card (or other rewards card) for everyday spending, and then redeem the points you’ve earned for airfare, car rentals or hotel stays.
- Pay off your balance religiously. Only use a credit card if you can pay it off at the end of the month. It will save you from paying hundreds of dollars in interest every year.
- Check for online specials. Earn extra points/miles by checking your credit cards points’ website. Some companies offer bonuses by activating special offers before making the purchase.
Paying Off Debt
- Never cosign for a loan. You don’t want to be stuck with someone else’s payments if they decide not to pay. Don’t do it!
- Go smallest to largest. Pay off your smallest credit card/loan balances first. It will keep you motivated and reassure you that paying off those bills is possible.
- Autopay is your friend. Use automated options like online bill pay or automated deductions to make sure bills are paid on time, which can help you avoid late fees and improve and protect your credit score.
- Change your due date. If you’re struggling to pay your bills, it may be a cash flow issue – your paydays are not in alignment with your bills. Ask the biller if you can change the due date to coincide with your pay cycle.
- Buy gift cards for yourself. There are several reasons to purchase gift cards:
– You can earn grocery store fuel points.
– Some restaurants and retail stores will give you an extra gift card or merchandise for purchasing a gift card.
– Some retailers (e.g., Fry’s Food Stores) occasionally sell gift cards at a discount – who wouldn’t want a $100 gift card for $85?
- Holiday spending hack. Use your Flexible Spending Account like a savings account. Save all of your FSA-eligible receipts until November then cash them in and use the money for Christmas gifts.
- Triple dip when shopping. Only purchase items when they’re on sale. Use a credit card that earns points. (Or pay with a gift card you bought at a discount.) Use shopping sites like eBates® that may provide additional cashback incentives.
- Save on shopping. When you buy online from a retailer, have the order sent directly to your local store. You’ll save on shipping charges and avoid the chance of thieves grabbing your purchase from your porch or front doorstep.
- Waive car rental insurance (maybe!). Some credit cards cover rental insurance, so you don’t have to buy the rental company’s insurance. Check your policies to be certain.
- Pick a focus for your trip. Food, sightseeing, best hotel or something else. Once you know what takes priority, you can better budget for your trip.
- Go offseason. Plan vacations during less popular times. You’ll save on everything from flights to hotels to food – plus, you’ll avoid crowds.
- Set a budget. It’s a simple concept but many people don’t do it or think they don’t need it. Use online tools like Mint® or Money Management (free for Arizona Federal members) to simplify the process.
- Cut the cord. Save $100 per month or more by ditching your cable TV or satellite provider. Use an outdoor antenna to tune in to local channels and a streaming service to watch movies and other favorite TV shows.
- Visualize your goals. Post reminders of your spending goals around the house or create a vision board so your financial goals are always top-of-mind.
- Stay fit! Some experts, such as financial journalist Vera Gibbons, believe that people who are in the habit of exercising are more financially successful. This is because those who work out tend to be in better health, so fewer sick days are used. Eliminating unhealthy habits, like cigarettes and junk food, can also impact your bottom line (and your waistline).
- Portion control. Since most restaurants serve extra-large portions, consider splitting a meal with a friend or taking the leftovers home for the next day. This tip can also keep you from overeating!
- Quarter mile. Put 25 cents into savings for every mile you drive. When major repairs come up, you’ll have the money set aside for them.
- Invest in your future. Don’t fool yourself into believing you’ll save what’s left over at the end of the month. Include an investment category in your budget. That way the money you’re putting aside for retirement is on autopilot.
- Invest your savings. Only keep enough to cover six month’s to a year’s worth of expenses in your savings account. The rest should go into an investment account for better returns. Just remember, investments typically are not insured and could lose value, so consult your financial adviser first.
- A second home. Consider purchasing a rental home to generate extra income. Or if you own a vacation home, rent it out when you’re not using it to maximize your investment.
- Try the 72-hour challenge. Most of us spend money daily. The 72-hour challenge is where you avoid spending any money. If you can make it through the first 72 hours, try another 72 hours. You’ll find your spending will be drastically lowered and you’ll have more money to invest for retirement or other priorities.
- Get enough coverage. Don’t rely solely on your workplace’s life insurance. Experts recommend you purchase coverage equal to 10 times your annual income. So, if your employer-provided insurance doesn’t offer that much coverage, you’ll want to purchase more. Don’t leave your surviving family struggling to make ends meet.
- Compare insurance options. Term and whole life are the most common types of life insurance. While term is usually more cost-effective, whole life has other advantages. Do your research and consult a trusted adviser, like the insurance specialists from Arizona Federal, who provide members with no-cost, no-obligation insurance reviews.
- Know what’s covered. Some renters and homeowners policies cover cash value instead of replacement cost. Cash value is the cost of the item minus depreciation. So, if you have a fire at your home and you have a cash-value policy, you could have difficulty replacing destroyed items because the policy will only pay out the current value, not your actual cost to replace it.
- Pay in full. Many insurance companies add a small monthly service charge if paying month-to-month. If you can afford it, pay the policy in full upfront.
- File ASAP. While you can’t officially file your taxes until the end of January, you should fill out your tax forms right after the New Year. This will ensure you’re ready to file right away, which helps prevent someone fraudulently filing a return in your name. By filing early, your tax refund will arrive much sooner, usually within a week or two, as opposed to several weeks if you file in April.
- See a tax adviser. If you have a complicated return or if the whole process is a bit overwhelming, have someone who specializes in taxes assist you. They may be able to help maximize your deductions and tax credits. Of course you’ll pay a fee for this service, but it may be worth it.
- Reduce your tax burden. Most people think the only way to save more money is to either spend less or make more. Take advantage of your 401(k), Health Savings Account and IRAs to increase your savings and decrease how much you pay in taxes. (Consult a tax adviser for details.)
Your turn: Do you have a favorite money tip or hack?