Money Saving Tips

"a penny saved is a penny earned"

This old adage is not true!  The reason it is not true is due to the effect of marginal income taxes.  Marginal meaning the amount of tax you would pay on the next dollar you earn.  We have all experienced receiving a raise or a bonus only to be disappointed with the size after taxes.  Assuming a marginal tax rate of 30%, you would need to earn an extra $142.86 to come out with an extra $100 after taxes!  Keep in mind that if you plan on spending that $100 on an item with 8% sales tax, you could only buy something that costs $92.60.  To purchase an item that costs $100 assuming 8% sales tax and 30% marginal tax rate, you would need to earn an extra $154.29!

A $100 saved is worth at least $150 earned

This fact adds to the power to using credit counseling to lower your debt payments.  By reducing your monthly expenses up to several hundred dollars per month, debt consolidation can offer a fresh start on the road to more healthy personal finances.

Quick Money Ideas:

Reclaim deposits - You may have provided deposit money for services that is no longer needed.  For instance when you move to a new State, utility companies often require an upfront deposit.  Once you a made a number of on time payments the deposit should be returned to you.  Sometimes you need to ask for the money to be returned.  It may not happen automatically.  Some apartment rental agreements have provisions to return some of the deposit money if you renew the lease.  Think for a moment of the possible deposits you have made that you may be due.  This can be a great way to bring in some quick cash. 

You may have made reclaimable deposits on your:

• Telephone service

• Cell phone service

• Electric service

• Apartment lease

• Secured credit card

PMI insurance is typically required when purchasing a home with less than 20% down payment.  If you were required to obtain PMI and now have more than 20% equity due to appreciation, you may be able to cancel this insurance.  PMI can cost up to several hundred dollars per month and it offers you no protection.  It only protects the mortgage holder. 

The mortgage holder will not call to tell you when this insurance is no longer mandatory!  

Appreciation and debt repayment can both contribute to increasing your equity above 20%.  It is up to you to call your mortgage holder if you think that you now have over 20% equity in your home.