Your income is incredibly valuable. It is the source of everything you have. It puts a roof over your head and food on the table. However, it can sometimes seem like there just isn’t enough money coming in.
The truth is, most of us make enough money, it’s just disappearing before we realize what happened. Use these 5 tricks to find extra money in your month with little effort.
Use the 10% Rule
10% is a small amount that can make a big difference. That’s why I created the 10% rule to help relieve cash for your financial goals.
Look at your budget for areas that you can cut by 10%. What about restaurants or entertainment? Maybe that clothing category?
Let’s say you budgeted $150 for restaurants. Cutting it by 10% means you take out $15 and set it aside and your new restaurant budget is $135. You can aim that $15 toward your debt snowball or retirement. This change is so small that you probably won’t even feel it. However, by doing this over multiple categories, you can painlessly move hundreds each month toward your financial goal.
Pack Your Lunch
One thing I hate doing is packing a lunch. Can you relate?
In the evenings, I’m not in the mood to make a sandwich for tomorrow’s lunch. In the mornings, I’m too pressed for time. So what do I do? I run to the nearest restaurant or fast food place to get something quick.
I’d like to think it’s because I’m busy, but the truth is it’s because I’m lazy. Packing your lunch is so much cheaper than eating out each day.
If you spend $5 a day on lunch, that means your monthly lunch budget costs around $100. However, a loaf of bread and some lunch meat can last for a week at a fraction of the cost. When I started packing my lunch, we had so much extra money left over at the end of the month.
Need another incentive? Packing your lunch can be a lot healthier too. I ended up losing some pounds as a result. All it took was a slight change in my lunch diet.
Get on a Budget
Have you ever come home from the store with a case of soda only to find out one of the cans was leaking? After you peel the soggy box off of your car interior, do you simply just put it in the fridge without removing a single can? Of course not. You open it up, find the busted can, and clean up the mess.
A lot of times our income has leaks and we don’t even realize it. This can create a huge mess in our finances. When money isn’t given an assignment, it tends to slip away. It’s important to make a plan for each dollar of your income. We need to pinpoint where the leak is and clean up the mess.
Once you analyze your spending habits, you’ll realize just how big of a leak you had. I recently helped a client create a budget and we found $700 a month that had been leaking out! Where was it going? He had no clue. A lot of small purchases had put a hole in his income.
Review your Insurance Plans
Insurance plans can be riddled with hidden costs and upgrades. By consistently analyzing your auto, health, life, and homeowner’s insurance, you can save a lot of money every month.
When it comes to auto insurance, consider getting rid of roadside assistance and rental coverage. The added cost of these features may seem small, but they add up over time. Look back at the last 5 years. Have you needed to use roadside assistance? How much have you spent total on that feature? Often times it is more than the cost of a tow truck.
If someone depends on your income, then you need life insurance. Term Life’s premiums are a fraction of the cost of a Whole Life policy. If you currently have a Whole Life policy, get a quote on a Term Life policy. The monthly payments can be hundreds less. Not to mention you can withdrawal the cash value plan that’s tied to the Whole Life policy. Just make sure you have your new policy in place before canceling the old one.
Change your Tax Withholdings
When tax season rolls around, stores start pumping out ads and commercials to bring in more customers. Car sales skyrocket as consumers flock to car dealerships with their checks from the IRS. It’s like free money!
Unfortunately, it’s not free money. It’s actually your money. Every time you receive a paycheck, a little bit is taken out for income taxes. Whenever you get a big tax return, that means you gave the IRS too much money and they’re returning it to you. That’s why it’s called a tax return.
So what’s the ideal tax return? $0. I know it’s not as much fun, but that means you gave the exact amount in taxes and nothing more. This also means your monthly take home pay is higher.
If you received a big tax refund last year, check your withholdings through your employer. You can change them so that less is withheld each month. Since each case is fact dependent, I recommend you speak with a tax professional before making any changes.
Did I miss anything? What ways can you find extra money in your month?
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