Feb 19, 2009

GOOD WAYS TO FIND FREE MONEY

If you are tired of making lifestyle changes to accommodate your savings plans then read on. These ideas lead you to prime places to look for money that’s already rightfully yours.

Some people see little point in changing their ways to save a quick $5 or $10. These same people find it difficult to believe such small amounts can actually make a significant difference to their bottom line. They’d much rather indulge in a little daily luxury, like enjoying a cup of espresso each day, then tighten their belts for what they see as measly savings.

For all the spendthrifts at heart, here are some concrete ways to save on things you are already paying for. No need to change your lifestyle or habits in the least. Think of it as money that you are already overpaying to others.

Step up to the plate and claim your free money!

Talking on your cell-phone
You thought you were going to need 2,000 minutes a month, only to find 300 or even 200 would do just as well.

If you’re coming to the end of your contract, or if your service provider is willing to waive the early-termination fee, ask to have your deal changed as soon as possible.

Think about this: Verizon’s America’s Choice 3,200-minute plan runs about $200 per month; you’ll spend just $40 for its 400-minute America’s Choice plan. This is provided you don’t start going over on your minutes and incurring pricey overage charges, that’s $160 in savings each month, or $1,920 a year. Even changing from the America’s Choice 1,100-minute plan at $80, would still cut your telephone bill in half for an added $480 in your pocket.

Local and long-distance calling: If you’re not using all of your cell-phone minutes each month on a plan that doesn’t allow you to just roll them over, you can at least offset your landline costs with those otherwise-wasted minutes. Are you already doing this? Try bundling your local and long-distance plans if you’re regularly spending more than $50 per month. Many bundled plans start at just $50 before taxes and fees and allow you to talk for as long as you want without the huge bills.

Calculate all of the above carefully, though. If your usage is not steady, you’ll pay the same rate every month, meaning no breaks for vacations when your usage normally decreases.

Your checking account: When was the last time you looked at the monthly fees your bank assesses on your checking account? By switching to a non-interest-bearing account, you can pay far less money and avoid higher fees.

Bankrate.com’s annual survey of checking accounts found that average monthly fees are up to $10.86 on interest-bearing accounts, vs. $3.72 for regular checking accounts. You’ll have to keep $2,258 socked away in that interest-bearing account to avoid fees versus the $245 minimum for the non-interest account. So, what are you giving up?

Average yields sat at a paltry 0.27% in the fall of 2003, the time of the Bankrate report. Meantime, if you can, try to plan your ATM withdrawals. The average fee you’ll pay for using another bank’s ATM machine is $2.69 -- $1.40 to the ATM’s bank and $1.29 to your own. Eliminating only one of these withdrawals each week can save you a nice $140 per year.

Your insurance: You can save on your insurance policies in a variety of ways. Ask your insurance provider outright for discounts: Besides the usual good student and safety discounts on auto policies, ask for a multi-policy discounts if you’re insuring more than one vehicle. Raise your deductibles on older cars or drop collision coverage altogether if your car is worth less than $1,000. Raising your deductible from $200 to $500 can reduce your premium by as much as 30%, according to Insure.com.

NEVER overpay to borrow your credit cards. Do you think that 2% or 3% isn’t worth fighting for on your credit card’s APR? Consider this: If you’re an average American, you owe $8,940 in household credit card debt, according to CardWeb.com’s CardData Service. At the average APR of 16.44%, you’ll pay $1,470 per year just in interest alone.

For every 1% decrease in APR, you will save $89. However, the difference is far more dramatic over the entire life of your debt. Figuring you can make monthly payments of 5% of your debt per month, you’ll pay $3,334 in total interest at the higher rate. However, at an APR of 13.44%, you’ll have paid $2,551 – that is 23% less.

Also, lots of cards come with added benefits, such as airline miles or, better yet, even cash back. American Express’ Blue Cash card rewards you with up to 5% cash back; the GM card awards 5% back toward a GM new car purchase or lease. On the average credit card debt of $8,940, that works out to $447. Use MSN Money’s Credit Card Analyzer to find other low-rate and cash-back cards. In addition, you can check CardWeb for a list of the monthly rewards that credit cards are offering.

Your mortgage. Your biggest savings potential here is to get rid of PMI, or private mortgage insurance. PMI protects the lender should you default on your loan. You’re obligated to pay this so long as your equity remains below 20%, but once you cross that magic threshold, you should ask your lender to drop the fee.

The law actually says your lender must drop the fee once your equity crosses 22%, provided you have a conventional loan originated or refinanced after July 29, 1999 and you have a good payment history. However, if you have an older loan, you could be paying this unnecessarily without realizing it.

Depending on the size of your mortgage, this could be adding hundreds of dollars to your mortgage cost annually. Look into this, today.

Make the most of your current resources
Begin by using what you have. Paying for Internet access already? E-mail can be a great way to cut your long-distance telephone costs. It may not be a substitute for your weekly heart-to-hearts with Dad, but it probably should substitute for the “when can we get together again?” calls. Why spend precious money leaving voice mail?

Take the time to get rid of what you don’t use. If you’re not using it, you won’t miss it when it’s gone. Donate all unwanted items for a tax deduction, have a garage sale or sell them on eBay. If you have to come up with money for a storage unit for all that stuff, it’s time to eliminate that debt.

Pay attention to potential income
Perhaps you have had a hobby for years but have never considered it as a money earner. Take a good look at it now. If you love to scrapbook, consider putting an ad in the paper to teach others how to do the same. At the same time, establish a Web page where others can sign up to learn your craft online.

Could you have old money just waiting to be claimed? Perhaps, you made a move and forgot about an old bank account. There are plenty of free sites that list people who are owed money by insurance companies, banks and utilities. Try MissingMoney and CashUnclaimed.

Ask for a deal
It’s that time again when you need to go out and buy a big-ticket item. You know by now to shop around for the best price but are you prepared to ask for a deal. Next time you have your heart set on that ruby ring and you are prepared to drop 3K to make the purchase, stop and think about haggling that price a bit. Don’t just assume because you are at a finer jewelry store that the price will be carved in stone. Ask. It never hurts to ask.

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