Income

100 Money Saving Tips

Here are 100 money saving tips you can use to pay off your debt, give or save to invest.  If you like it please share on your favorite social network.

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  1. 100 Money Saving Tips

    By Jess from Canada (HPIM4771) [CC-BY-SA-2.0], via Wikimedia Commons

    Adjust the Thermostat In the summer turn it up and in the winter turn it down. You will use less energy. Get a programmable thermostat if your house is empty during the day; you can save a lot of money and still have the temperature you want in your house before you get home.
  2. Cut the cable  Cable TV is becoming increasingly expensive as well as increasingly redundant since most networks are putting their content online, either on their own websites or on sites like HULU.
  3. Combine it  if you can’t cut the cord then at least find out if you can bundle the services and save money in the process.
  4. Threaten to cancel and see what kind of deal you can get; Cable companies are striving for subscriber numbers right now and just want to hold onto their current clients.  You can get a greatly reduced rate if you just tell them you want to cancel.
  5. Entertain at home A game night or a nice dinner is much cheaper and nicer in many cases, when done at home. Find other like-minded people and find creative activities.
  6. Learn how to sew a button Don’t throw away clothes because of minor issues. Sew the button back on if you stain your jeans or rip them make them your yard work jeans.
  7. Make gifts don’t buy them Making quality gifts takes time, but the person getting the gift may appreciate it much more.
  8. Convert to a gas or an instant water heater They are more efficient and can save a lot of money over time.
  9. Replace incandescent bulbs with CFL although there is some debate on this you can test and see if it helps you save money.
  10. Get rid of your home phone With cell phones being what they are now there is very little reason to have a land line.  If you don’t get the best service at your home many cell phone providers will give you a device that will boost the signal in your home.  It is like having a tower in your house.
  11. Shut vents in unused rooms This may not be a good idea if you have forced air heating, but shutting vents in unused rooms can save on your heating and cooling bill.
  12. Change the filters in your home every 6 months  This makes your HVAC work more efficiently
  13. Use a power strip to turn off your entertainment system There is a term being used call vampire power where a lot of new electronics draw small amounts of power even when they are turned off. Using a power strip can eliminate that power draw and save you money.
  14. Buy used when possible Pay extra for a used quality product instead of a disposable quality product.  Especially when it comes to kids items that they will outgrow in 6 months.
  15. Get live in help If you have a spare room you can rent it out to someone you trust.
  16. Pay your mortgage on a bi-weekly schedule Doing this can shave years and thousands of dollars from your mortgage.
  17. Clean your own carpets You can rent the machine or borrow it from someone.
  18. Attend College online It is much cheaper to get your education online just do your research and find a good school.  I just finished my degree in 2.5 years.
  19. Delay purchases  When you have a desire to purchase something wait a few days maybe even 30 to make sure you still want to spend the money on it.
  20. Buy a Clothes line Running a dryer costs a lot of money. This can be your first wind and solar power appliance.
  21. Create your own 100-calorie snacks Buy in bulk and divide it yourself. That packaging costs a lot and we pay for it in the end.
  22. Make drinks at home If you are going to have alcohol it is much cheaper do have drinks at home with friends than to do it at a bar.
  23. Clean dryer filters It helps you dryer work more efficiently and prevents fires.
  24. Clean refrigerator coils again it improve the efficiency of your fridge.
  25. Turn down the temperature on your water heater It can save a lot of money on energy.  Unless you are like me and LOVE your HOT showers.
  26. Start a garden If you have any space it is a great rewarding experience. It takes some practice but you can grow your own food and it will be much better for you if you are doing it yourself.
  27. Start a compost pile Take your yard waste and kitchen scraps and start a compost pile or a worm bin and make your own Black Gold
  28. Reuse milk jugs You can use milk jugs with small holes in the bottom as a drip irrigation system.
  29.  Don’t waste your water When you cook veggies with water, steam or boil. Use it to water your potted plants. The nutrients lost in the water will feed your plants.  Just remember to let the water cool before you use it or it will kill your plants.
  30. Make your own cleaners Vinegar has tons of uses around the house and you can mix some up to clean and deodorize your home.
  31. Try a staycation If you stay home but disconnect from your normal routine you can get things done around the house or in your local area and save a lot of money.
  32. When possible go for energy saving appliances Save money in the long run with better energy ratings.
  33. Wear clothes more than once before washing when possible Unless if you are getting really dirty or are working really hard you can get away with more than one wear.
  34. Buy your own water filter Bottle your own water.
  35. Eat early or late when going out You can get early bird discounts or happy hours to save money.
  36.  Keep your freezer full It takes more energy to keep an empty freezer cold.

Kids

  1. Create a Babysitting Co-Op No not like those books from such a long time ago but if you and another couple can exchange babysitting services it will give both of you a free night out.  This is great for your marriage as well as your wallet.
  2. Hand me arounds  There is no reason to buy all new clothes for your child, especially when they can only where the same thing for a few months before they grow out of it. When you are done pass them along and find someone else to do the same with. My wife has a Mothers group at church that constantly passes clothes around and saves everyone a ton.
  3. Play at the Public Park Why not just go to the park and play with other kids, you already paid for it.
  4. Watch the local parks for educational programs Take your kids to these and they may have so much fun they won’t even realize they are learning.
  5. Public Libraries There is so much that can be had at public libraries from internet access to the books and learning programs.
  6. Use city services There are plenty of free (already paid for through taxes) activities for children around our city, between Metro parks and libraries there is plenty to keep them entertained.
  7. Watch local churches Especially in the summer there are tons of Vacations Bible Schools for kids’ activities.
  8. Stop spending so much on your kids  Really they want your time and love more than anything. Make up games you can play at home all the time or just play tag.

Car

  1. Slow Down  Aggressive driving and decrease your fuel efficiency by up to 33% according to the EPA.
  2. Driving the speed limit  This also helps to save gas as gas mileage drops over 60 MPH.
  3. Empty your Trunk  Getting excess weight out of your vehicle will give you better gas mileage.
  4. Change your oil Keep up with routine maintenance these jobs are not just to keep auto shops in business but they help your car drive better longer.
  5. Never buy new  New cars are almost always a bad deal because of depreciation. Used cars will get you a much better bang for your buck
  6. Wash and vacuum your car at home There is no reason to pay for a vacuum and the automatic car washes don’t do the best job of your car.
  7. Wash it often  Dirt can damage paint.
  8. Keep your tires inflated It will help you get better gas mileage; you also need to check them every few weeks.
  9. Use 2WD55 Air conditioning That is two windows down 55 MPH.
  10. Keep wheels aligned  Your car is working hard if your alignment is off.
  11. Rotate your tires Prevent wear and make your tires last longer
  12. Find a way to carpool if possible I was able to carpool for over a year with a friend over a 40-minute commute, so it saved a lot of money.
  13.  Leave the car behind  Walk whenever possible, ride your bike if it is too far to walk.
  14. Move to just one car Can you do with only one car in your family, save on insurance, gas and maintenance?
  15. Look for discounts Ask your insurance company if you can get a discount for paying annually or with an automatic draft from your checking account.

Electronics

  1. Shop around. There are so many places to get a good deal online that you have to do your research.
  2. Buy Video games with replay value I have never been more disappointed than with THE video game that was supposed to be the be all end all of games and it took me 12 hours to finish. Some games you can play for hours some for days. Do the math 5/hr or .10/hr?
  3. Get books and DVDs from the Library Most libraries are stocked with DVD and unless it is a reference book you will need constantly you can get it for free at the library.  If the library doesn’t have it, try sites like www.paperbackswap.com and www.dvdswap.com   OR Find a friend who has it and borrow it. If you still can’t find it shop the used book stored then used on Amazon.com Then the retail store if you must.
  4. Think about an old fashioned solution? If people like Nelson Rockefeller can run multi-national corporations without a smart phone maybe we can too.
  5.  Look into open source software Why pay for software when there are free and sometimes better solutions out there.  http://www.osalt.com/ is a site dedicated to finding you the open source solutions you need.
  6. Check out Ting Ting runs on the sprint network, if you don’t mind having an older phone for a while you can save a ton of money by switchting over to ting.

Banking

  1. Find the best interest rates around don’t just use the bank you always have. This isn’t 1950; banks don’t think of you as anything but a number (unless you have a very special bank) so don’t fall for their loyalty stuff. If they aren’t making the most of your money someone else will.
  2. Call your credit cards and ask for a better rate Although I had one bank drastically reduce my limit when I did this once when all the banks were tightening up. I paid off the card and haven’t done business with them since.
  3. Always use a reward Card. There are not as many as their used to be but they are still out there. Get paid if you can as long as you pay off the balance.
  4. Get an online savings account They tend to have higher interest rates than brick and mortar banks.  I use and love Capital one 360
  5. Don’t overdraft your account  it costs you too much money.
  6. Pay bills automatically Use bill pay from your bank to avoid late fees and save on postage.
  7.  Keep your money in hard to reach places  like an account you don’t have Internet access to. That way you are less inclined to spend it on a whim
  8. Freeze your credit cards  Literally we have kept our cards in a tin can full of water in our freezer. If we need them we have them but we can’t just get them to spend carelessly.  Especially when you can’t microwave it.

Shopping

  1. Sign up for rewards Programs I even set up a special email for them but you can get some good coupons and deals from a lot of these.
  2. Stick to the list A shopping list is not just there to remind you of what you need to buy but, it is also there to prevent you from buying things you don’t need.
  3. Drink more water Soft drinks at a restaurant can cost up to $3. If you drink water you will save a lot in the long run. Even at home it is cheaper.
  4. Buy more ingredients Prepares, processed, microwave meals are more expensive and less nutritious than buying the ingredients and making it yourself.  We have seriously considered a “you can anything you want as long as you make it yourself rule)
  5. Buy and cook in bulk Wholesale clubs allow you to buy large amounts at a discount (although not always so keep an eye out). Store the food for later or prepare it all at once and then freeze it for use later.
  6. Constantly shop around on service like insurance Insurance policy rules are constantly changing you may be able to get a better rate from someone else check at least once a year.
  7. Check your deductibles you can save a great deal by increasing your deductibles, although make sure you have the money to cover your deductible in the event of an accident.
  8. Always ask for a discount The worst thing they can say is say “No” and it is easier every time you ask.
  9. Don’t be trendy Classic clothes last longer than trends. Besides you will most likely look back and realize how silly you looked
  10.  Don’t buy dry clean only clothes You don’t want to spend the extra money
  11. Shop at outlets and stores like TJ Maxx “ You can often find better prices at these stores.
  12.  Share a Meal  If you are going to go out to eat try splitting a meal. Most casual dining restaurant meals are big enough to share and still be full.
  13. Buy a whole Chicken You can eat all of the meat and then boil the bones to make a stock.
  14. Get a larger prescription If you take a prescription medication on a regular basis, ask your doctor to write a three-month prescription. Instead of paying three co-pays, you only pay one.
  15. Use Baking soda for toothpaste  It works just the same
  16. Plan meals that can be repurposed We make a pot roast and make open-faced sandwiches the next day out the leftover meat.
  17. If you eat out only do so when you have a coupon We decide where to eat based on the coupons we have in our collection.
  18. Don’t shop for groceries hungry You often end up buying so much more than you really wanted to.
  19. But generic when possible Store brands foods are much less expensive in most cases and the reduction on quality is not that noticeable except for Ketchup I have never found a generic ketchup that is as good Heinz.
  20. Watch for thrift store discount days Some stores have a 50% off day and you can get things on the cheap.
  21. Buy an Entertainment book It will cost you $20-30 but will save you a ton.
  22. Find out if an item has a price guarantee Some store will pay you back the difference if an item goes on sale shortly after you buy it.
  23. Always keep your receipts  You will need them if you want to get your money back or need a repair
  24. Remember to send in your rebates  Another reason to keep your receipts.

Other

  1. Adjust your tax allowances There is no reason to give Uncle Sam an interest free loan for the year while you are paying interest on your debt or while you could at least squeak a few dollars out of your savings account.
  2. Get the most out of your employer  Make sure you are aware of all the benefits offered by your employer you can take advantage of. FSA, Tuition reimbursement, 401(K) match, adoptions assistance.
  3. Go to the second run or Dollar Theater  Sure you won’t see it the day it comes out but Hollywood hasn’t been doing much worth the extra expense IMAO.
  4.  Start or join a book club  It is cheap and it great entertainment as well as being social with a real live person.
  5. Quit Smoking it isn’t getting any cheaper and it will save you money in the long run on medical expenses.
  6. Try grounding yourself for a period to reset your life style “ For a month stop watching TV or playing video games or whatever mindless thing sucks up your time. When the month is over you will find you didn’t need it much after all.
  7. Offer services instead of gifts  A night of babysitting can be more valuable than gold.

 

What are your best money savers?  Tell us below in the comments.

This article contains affiliate links that will pay for this site if you purchase anything through those links.  

 

 

Everything can be a pre-tax deduction

Pre-tax deductionsA Pre-tax deduction refers to things done the governments preferred way that reduce the amount of income you pay taxes on.  For example if you make $50,000 a year and you put $10,000 into a 401(k) (one of the governments preferred savings methods) then you will only pay taxes on $40,000 a year.  This is a nice way to reduce the amount of taxes you pay at the end of the year and with things like a 401(k) the money is taken out of your paycheck before you see it, so you never even have the contributed money.  Not only does this prevent you from missing a deposit to your retirement it makes your taxes simpler because you employer tells the IRS that you only earned 40,000.

Post tax deductions are things like mortgage interest, IRA deductions etc that are tax deductible, which means (Normally) when you pay $5,000 of mortgage interest you will get the tax you paid on that $5000 back at the end of the year.  This is what we call a tax refund, it is money you over paid to the government throughout the year.  It is like getting change at the grocery store, only you have to wait months and fill out a lot of paperwork to get it.

Both post-tax and pre-tax deductions are tax deductible, which means you do not have to pay taxes on them.  The difference is that you don’t get all of your money from post-tax deductions up front.  The government still taxes the money and then gives it back to you when you file your taxes.  Maybe you don’t mind giving Uncle Sam an interest free loan or think he can spend your money better than you can but I don’t think so.

When I moved to my new job recently I was disappointed to learn that they did not do a matching 401(k) contribution.  In order to make up for my disappointment they offered me a signing bonus (read onetime bonus) I asked for that money as part of my salary(so I could have it every year), which they were happy to do. (Always negotiate your salary and benefits)  I had intended to roll over my old 401(k) to the new one for my company, but instead decided to roll it into a traditional IRA with my old friends over at Fisherwealth. (To the best of my knowledge no relation, but we have done business together for years).  I can now take the money I negotiated and deposit it to my new IRA.   But, what am I to do about the money being a post-tax deduction?  I am being taxed on that money even though it is tax deductible.

This is when I realized that if you know how things work you can make almost anything a pre-tax deduction.  When I started my new job they asked me to fill out a form to determine how much money the federal and state governments should take out of my income every paycheck.  To pay my taxes.  Now this isn’t a nice simple form like take out $100 per check, no it is a complicated formula so you most people don’t realize what is going on.  But, as I have written about here, you can get your tax refund all year long by filling out this form properly.

This way all your tax deductible expenses including your child credits etc, can be pre-tax.  The IRS has a handy little calculator to determine how to eliminate your federal refund and get the most out of your paycheck.  It is here if you want to check it  out.

Do you prefer to get a big refund or a bigger paycheck?

Image by irsein

How to compare job offers

Compare Job offers

Weighing Tough Decisions

When you are faced with a new job offer (other than being extremely blessed) you may be in for a rough ride.  How do you make such an important decision?  How are you to compare job offers?  If you are like me you may try to analyze and quantify every detail of each position in order to make a decision.  It can be difficult and there are a lot of things to think about. This article will hopefully assist you with such a decision.

I have just gone through this process myself so it is clear in my mind.

The Intangibles.

Obviously there will be things you can’t quantify.  If you have a really great relationship with your coworkers. (or a really bad one) If you are working for a non-profit that is really important to you.  These are things that you can’t convert into a formula to make a decision so for the sake of this article I am going to ignore them.  You will have to determine how important these things are for yourself.

Base Pay

This is the easiest to compare and the largest portion of your compensation.  This is easily examined simply by looking at what they are going to pay you if you are salary or by doing some simple math if you are hourly.  Hourly rate multiplied by 2080 gives you a yearly rate assuming no overtime.

Insurance costs

Having just lived through this I learned that my old employer had really great insurance rates and where ever I went I was looking at doubling my insurance costs.  Always ask for this information before accepting a new job you may learn that you have actually taken a pay cut because an increased cost of insurance has eaten up your raise.

Vacation

Starting over in a new job often means that you are losing paid time off or vacation.  I compared this by multiplying it by my daily salary rate to determine how much the vacation was worth in dollars.

Commute

The book “Your Money or Your Life” is great for helping you see all the costs associated with your job, including commute and clothes.  The IRS millage rate for 2014 is $.56 so take your commute and multiply by this number to make sure you won’t be losing money in the cost of driving.

Additionally, I tried to quantify the hours I was going to spend in my commute.  One of the offers I was looking at put me far away from home and into heavy traffic so my actual commute would have been longer than the millage lead me to believe.

401(k)

The match, if any for your 401(k) can be a large difference between two jobs.  If your current jobs matches 50% of the first 4% of your salary and your new job doesn’t offer a match then you are giving up all that tax free money.

Other Extras

There may be other offerings from your employers, some of them get very creative to attract top talent.  What else do you think you should examine?

 

Image by winnifredxoxo

My extra income adventure: A New Series

Extra incomeI am going to be kicking off a new series on this blog.  I have been interested in producing some extra income in my life in order to help to pay for the down payment for my house.  I have often looked into passive income ideas and it seems like most of them are anything but passive.  Passive income is income that you don’t directly trade time and labor for money.  Examples would be  royalties, or licensing etc.  Although my book would fall under this category I don’t have any delusions about making millions of dollars from it. (although it would be nice)

I had considered getting a second job, but didn’t want to give up time with my children who I only see 3 hours a night as it is.  So, one of my qualifications for these ideas is that I am not simply trading my time for money directly.  (I will do this job for x dollars)  I hope to find other ways to work once and make money over and over with that work.  I plan on doing some of this by outsourcing some of the work that I can’t do, or don’t have time to do.  If I do my calculations correctly the Virtual Assistant (VA) should pay for themselves.

I have some money that I am able to invest in business ideas to capitalize a few of them, which makes me fortunate.  If you want to see this done with almost no money check out UpwardsofTwenty.  He is starting with $20 dollars and investing in interesting ways to grow from that $20 to where ever he ends up.

My plan is to start with some small ideas that I can put into place once and make more than an hourly wage in the process.  I am not going to throw my money at any get rich quick schemes, that would be bad steward ship although even those crack pot ideas have real extra income ideas as their kernel of truth.

After I have completed my first venture I will update you with the plan I followed and the money I made.  I plan to be as open and honest as I can with this part in the interest of transparency.

In order to keep myself sane I am going to look at any money invested that loses money as the cost of education.  I find that I am very hesitant to take risks but hopefully I can break myself of that mindset with some small victories.

First Ebay Sale

My First Ebay saleAs part of my New Year resolution I have posted my very first Ebay sale.  It is a hard drive that has been sitting on a shelf in the box for a while now.  The reason for the sale is two fold; we are looking to save up for a down payment for a house and so I am going to try to sell some things we have had around the house that we no longer need and secondly our house feels too crowded with stuff and we are looking to simplify and get rid of things we no longer need or use.

A lot of things have changed since I last looked at selling things on ebay which made my first ebay sale much easier.

  1. Setting up the listing was incredibly simple – I was able to model my listing after others already in the system and it took care of most of the information for me.  I took a few pictures with my phone and up loaded them.
  2. Shipping was a breeze – I was very conserned with how to deal with shipping.  I don’t ship a lot of things and I did a little research with UPS and USPS but turns out ebay has you covered there as well.  They knew my product and suggest a flat rate USPS option that I had already concluded I needed.  It made me feel much safer.
  3. Anyone can do a “Buy it Now” – Last time I has looked into it (admittedly a long time ago) only experienced sellers could do a buy it now sale.  Meaning you don’t have to play the auction game but could simply buy it outright.

The item sold after a week for $35, which is more than I paid for it.  All in all Ebay has improved a great deal since the last time I had looked into selling.  It could be a great way to earn some money and simplify your life by getting rid of some things you no longer need.

 

Automate Your Finances

One of the best steps in getting your budget under control is to automate finances.  As much as possible,  make your financial matters a hands off activity.  This way you are eliminating human error like forgetting to send the payments or spending more than your budget Automate your financesallows, and your savings happens without your effort.

Limit access to money

One of the most effective ways to automate your finances and control your spending is to limit access to your money.  Your money is going to be spent the question is if it will be spent where you would like.  The best example of this is 401(k).  This money is normally taken out of your paycheck before you see it, like taxes.  So, you do not have a choice in how you spend that money.  Most people never even pay attention to how much money is taken from them in taxes.

This can be done in very simple ways.  If your company has a direct deposit option you can limit yourself by only depositing the amount you need for your budget into your main checking account while remaining funds should be deposited into a savings or investment account.  This helps control lifestyle creep (the propensity to spend more as you make more) because you don’t actually see an increase in your main bank account where it can be easily spent.

Example:

If your monthly budget for your bills is $1000 and you get paid once per month you would only deposit $1000 into your main checking account.  If your paycheck was $1200 then you would deposit $200 in a savings account.

If you got paid every two weeks you deposit $500 per check if you can balance your bills on two different pay periods, that may take some time to set up and get right.

This prevents you from having easy access to “extra money”.  I use quotes there because all of your money should have a purpose even if it isn’t immediate, and there should be a plan for all of your money.  Don’t let your money sit around and be lazy, send it off to work for you in an interest bearing account, or in an investment of some kind.

Automate your bills

Most utilities offer a budget program which allows you to pay the same amount all year round instead of being hit with high electric bills for your air conditioning in the summer and for your heating in the winter.  They will average the last year of your bills and  give you one median payment.  This allows you to set up a recurring payments of a single amount; no forgetting and no sticker shock on your bills.

For years we split our bills in half and paid half every two weeks with our paychecks, to make sure we didn’t spend it while we were waiting for the bill.  It forced us to do some manual work thanks to those three paycheck months but it wasn’t bad.  Now we use a different account for monthly bills that doesn’t get touched so we always have enough money and the bills are set to pay the full amount automatically.

How have you automated your finances and made your life simpler?

Automate your finances

 

Negotiation Power – The $21,000 Question

Negotiation can save you money

Image by Henkster

The key is Negotiation

Many people are afraid of negotiation; they are afraid of being rejected, or of losing out on an opportunity, but not negotiating is costing you money.

Just today I was in a men’s store looking at suits.  The guy helping me pulled out one suit but told me that it wasn’t part of the stores buy one get one deal.  I tossed him a sceptical look and he immediately changed his mind.  “I could do the deal on that suit” he said.  Of course you could.  I didn’t even have to ask, I just gave him a look.  If I wanted those suits that look would have saved me $200 dollars.

Of course, there are many places where negotiation will get you nowhere.  Don’t bother talking to the teenager behind the counter at McDonald’s about free fries with that burger; they don’t have the power or the interest to cut you a deal.  But you should try it everywhere else, you never know where it may get you.  After all, when faced with the choice between a smaller profit no profit most will choose a small profit.

The $21,000 question

This brings me to my $21,000 question.  When I was looking to move from my last job to my current one I had just read an MBA document on how to negotiate with your new job and I was determined to try it.  I was not an MBA and didn’t feel that I was in a position to negotiate but what did I have to lose?

When I was given the offer it was A LOT more than I was making at the time.  I had every reason to scream “yes” immediately, but was still determined to take the chance.  I informed them that I was looking at a $3000 bonus from my current job (which was true) and if I left the company now, I would be walking away from that opportunity.  “Could you compensate for that with a signing bonus?” was the $21,000 question, I had read it in the MBA document.  No one does signing bonuses at my level, it was crazy.  The response? “We can add that to your salary offer, so you would get it every year, if that would work for you.”  I have been at my current job for 7 years which means that one question has earned me an extra $21,000 over the course of my career. Remember the only time you really have control over your salary is when you take the job, after that you have very little direct control.

Maybe you don’t have that opportunity but there are a lot of places where you can try to negotiate:

  • Car Purchases
          Not just the price, ask for oil changes, car washes, extended warrantee. 
  • Furniture Purchases
    Price, delivery fee, throw in that lamp in the corner(we got a kids lunch box my daughter had been walking around with at the store)
  • Smaller shops – I try not to because I want to support small businesses, but they do have the most power to offer you a deal.

Where have you negotiated successfully?  Tell me about it in the comments.

Give Yourself a Raise

One of the things I like to tell people in my stewardship presentations is that it is possible to give yourself a raise of roughly $2900 a year, depending on your personal situation.  Not only is this possible, I highly recommend it to anyone who wants to act responsibly with their money.

Give yourself a raise and this could be yours.

Photo by TALUDA

If you are looking to pay off debt, make ends meet, or just invest YOUR money so YOU gain the interest you owe it to yourself and your family to give yourself a raise.

Now for a little background…Every paycheck the government takes a ton of your money before it even hits your pocket and every spring people get really excited that the government makes them fill out paperwork to get back the extra that the government took out in the first place.  We call it tax season.

If you get a tax return back every year it means you are giving the government too much money every paycheck and they hold it all year and then give it back to you interest free when you file your taxes.

I don’t want to get political, but I believe it is irresponsible to allow the government to take your money all year only to give it back to you interest free in the spring.

The average tax return in 2011 was $2900.  By filling out a new W-4 form you tell the government to take less of your money each paycheck.  It reduces your refund but you will have more money in your pocket every paycheck.  How do you decide what is right?  The IRS actually supplies a handy little calculator for just such an occasion.  It will give you the correct number to enter on your W-4 to get you the smallest refund and the largest paycheck.  I, personally, like to have just enough money to pay for turbotax but you should do what you are comfortable with.  For years before I knew the calculator existed I just moved my W-4 number up a each year so I was paying less every year.

The point is, that is your money they are taking and holding.  Imagine going to the grocery store and paying too much for your groceries every week but not getting any change until the end of the year.  You wouldn’t be excited about that money at the end of the year!  It should have been in your pocket all along.  That is exactly what happens with your taxes.  People over pay their tax bill and get excited when they get their “change” in one lump sum because they don’t understand the process.

For this to work you must have a regular paycheck which has taxes withheld   If you are responsible to pay your own taxes then this won’t work.  You must also get a tax refund at the end of the year, if you don’t then you can’t get that money back throughout the year.

If you are looking to get more control over you money, to pay off debt, save for the future or just keep it out of government hands.  This is a great first step.

As always you should do you own due diligence when it comes to these issues.  This article is for informational purposes only and is not to be considered tax preparation or legal advice.

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