Life hacks to save money start from the smallest habits (using coupons and cooking at home) to more significant decisions (improving a credit score and filing one’s taxes).
The latter play a decisive role in reaching our financial goals. Whether you would like to save for your retirement, start investing, clear off your debts, or save for an emergency fund, you will need to take action to make it happen.
Here are some of the best life hacks to save money to get you started.
5.) Personal Finances: Manage Your Debts Ahead of Time
Many of us are feeling overwhelmed by the piling debts, but it doesn’t need to be this way. The key to paying off your debts, no matter how small or big they are, is to organize yourself and financial situation.
Assess Your Situation
Make a list of what you owe. Include the following things:
- Amount owed to each creditor
- Monthly payment requirements
- Due dates
This list will become the document you refer to when you need to monitor your situation.
Decide Which Debts to Pay Off First
You can either pay off the ones with the highest interest rates first — usually, it’s the credit card debts — or those with the lowest balance. If you pick the one with the lowest balance, you can use the money you’d normally put toward paying that one to pay off the next largest debt.
Commit to a Monthly Bill Payment Calendar
Your goal is to clear the debt list you set up in the beginning, and you need a plan to do so. On a calendar, mark the monthly due dates of your debts and your paydays. Then decide which paycheck will pay for which debt.
If some unfortunate event happens and you find yourself in a tight spot, at least make sure you pay the minimum payment.
Consider Refinancing Student Loans
The student loan debt in the USA is severe. In 2019, it reached a record of $1.5 trillion!
To get out of this system and get rid of this growing debt, refinancing could be your solution. LendKey offers refinancing to allow you to replace your existing single or multiple student loans with a new loan, making it easier to manage.
A new loan also means new loan terms, which can include benefits like releasing cosigners on your existing loan, qualifying for a lower interest rate, and reducing the payback period of the new loan. Check their website to learn more about what they offer.
Check Out Debt Management Plans
For your other debts, there is another solution you might want to consider: debt management plans (DMP).
If you feel more at ease having someone else manage your debts, debt management plans might be for you. Instead of dealing with your creditors yourself, you make one set monthly payment to a DMP provider, who in turn divides it between your creditors until your debt is paid in full.
It is a non-binding informal agreement between you and your creditors, meaning that you can stop it whenever you want. It works for non-priority debts, such as credit cards, loans, and store cards.
However, debt management plans may not be the best option for everybody. While it is consistent, efficient, and takes your mind off the organizational hazards of doing it alone, it can negatively impact your credit score. Contact a trustworthy counselor and check a reliable agency before making a decision.
4.) Work: Choose the Right Retirement Plans
One of the most important financial decisions you can make in your lifetime is investing in your employer-sponsored retirement plan. While there are many — 401(k)s, 403(b)s, 457(b)s, defined benefit plans, TSPs — the most famous plan remains the 401(k).
Eligible employees make salary-deferral contributions to it on a post-tax or pre-tax basis, allowing them to build a significant nest egg for retirement.
Invest as Soon as You Can
To make the most of a 401k or other retirement plan, start investing as soon as you can. These plans allow you to choose from many investment products, and there is no one-plan-fits-all formula. Pick the best funds for you by doing your research thoroughly.
Get Help From Experts
When the conversation gets too overwhelming with words like small caps, big caps, or emerging markets, consult the pros.
A favorite reliable 401k tool is blooom.
With only a few clicks, it can help you find the best 401k funds for your situation. After answering a few questions about your investment habits, blooom makes trades for you as circumstances change as you near retirement. It can be a vital tool people use to optimize their retirement.
To get a glimpse of what they can do, get a free blooom analysis on their website. It will show you hidden investment fees in your account, help you understand the diversity of funds in your account, and see their experts’ recommended stock to bond mix.Learn More About blooom
3.) Taxes: Get a Bigger Tax Refund
There is no running away from taxes. We all have to pay them. However, we can help control how much we get back!
Let Professionals Handle Your Taxes
Many companies offer fast and reliable assistance to file taxes.
TaxAct, for example, has filed over 65 million federal returns since 2000. They have four plans to accommodate your needs, including a free option for simple returns filing. The “Maximum Refund Guarantee” and “$100K Accuracy Guarantee” are also a sweet addition to the deal!
You can also get your taxes done with TurboTax. They also have four plans in place, with the most popular being the “Deluxe” plan. Amongst many things, it can search 350+ tax deductions and credits, maximize mortgage and property tax deductions, and turn donations into significant deductions.
Using tax software can make a tremendous difference. It is one of the most convenient life hacks to save money as it helps fill all the details correctly. Many of them check if you qualify for tax deductions and credits for you.
Check the IRS Tax Form W-4 You Filled Out When You Started a Job
This form tells the employer the correct amount of tax to withhold from an employee’s paycheck.
This calculation is based on the number of exemptions you claim. To get more on tax refunds, you can reduce the number of exemptions on that form. You can do so by requesting to change your W-4 form from the HR department.
Know the Difference Between Tax Credits and Deductions
Both are important to lower the amount of taxes you pay, but they work differently.
Knowing what each includes will help you fill your forms correctly.
Deduct All Donations
All charitable donations are eligible as tax deductions, therefore lowering your tax bill and getting a larger tax refund.
Deduct Family Expenses
This is one of the life hacks to save money that many don’t know about. The expenses related to taking care of kids and aging parents, including some medical bills, can be deductible!
Consult a tax professional to know what kind of family expenses you may be able to deduct from your taxes.
Increase IRA Contributions
Increasing your contributions to your Individual Retirement Fund or 401(k) lowers the total taxable income, therefore giving you a bigger refund.
Know Your Tax Bracket
Knowing your tax brackets helps you understand your effective rates. Because calculating it could be tricky, use E-File to get the math right in one click.
For self-employed individuals and small businesses owners, head here to discover how to maximize your tax refund.
2.) Home: Save on Your Rent and Home Expenses
Calling a place home sometimes comes at a price, and it can be an expensive one. Whether you’re renting a one-bedroom apartment or owning a large condo, there are many life hacks to save money you can use.
Get a Roommate During the Winter
The winter months are the least active months for renters, so you might have more leverage when striking a deal at that time.
Trade Work for Rent
One of the unusual life hacks to save money involves paying your rent with work instead of dollars.
If a place needs to be updated and you are gifted with handiwork or other skills, suggest to your landlord to do the necessary repairs and home improvements in exchange for cheaper rent.
Lower Your Phone, Internet, and Cable Bills With Trim
Trim will analyze your accounts to find recurring subscriptions to determine where you can save more money.
It can also cancel subscriptions, negotiate bills, find better car insurance, and more.
Ditch the Cable
Who needs TV when you can get all your favorite content on other platforms (for cheaper)?
Roku allows you to cut on those expenses by connecting your TV to the Internet and streaming their massive library of channels and programs.
Negotiate Better Terms When Reigning the Lease
If you’re a good tenant, your landlord would rather keep you than bring someone else. You can also hit two birds with one stone and sign an extended lease while you’re at it.
Landlords love stability. If you give it to them, they might take a few bucks off your rent.
Consider Putting Part of Your Place on Airbnb
Do you live in a well-furnished house or a large apartment and have a spare room?
You might want to consider listing your house on Airbnb. It will be a fabulous side business to run, especially if you live in a touristic area or near an airport. Read all our tips to become a super host here!
1.) Ask the Experts and Use Technology for Help
In matters of finances and life hacks to save money, no one knows more than the experts. They are our best bet to know the insides of financial operations and understand the nuances of each option.
Let the Pros Protect You From Identity Theft
With the data breaches that happened recently, no one can be completely safe from being hacked or having their data, including social security numbers, stolen.
LifeLock protects its members from the dangers of identity theft by scanning those threats, alerting you of potential threats, resolving the issue if you’re a victim, and reimbursing stolen funds up to the limit of your plan.
Use Robo-Advisory Wealth Management Products
A robo-advisor is an automated or online investment advisor that uses automated algorithms to manage your investments. They are highly accurate and help the user take reasonable and long-term decisions instead of emotional ones.
To learn what they offer and which one is best for you, read our complete guide here.
Get Free Debt Counseling at Consumer Credit Counseling Services
The CCCS’s network gathers non-profit counselors who can work with you in total transparency, confidentiality, and without any judgment. They can help you develop a budget, know your options, and offer you life hacks to save money. The 45-90 minute counseling sessions are free.
Check Your Yearly Free Credit Report
This report will help you stay up to date with your financial situation and monitor your progress better.
Follow these life hacks to save money and you’ll start building your savings and investments in the future in no time.