Big Ticket Items to help with Cash Flow….but be careful!

Okay so I have spoken about lots of different small ways to reduce expenses, thus increasing Cash Flow (income minus expenses).  But you are saying to yourself, come on I need to see more than $20 per month here and $15 per month there, I am negative cash flow and I need more like $100-$200 reductions to my expenses or increase of income, which can be hard in this economic environment.  Well anyone with an equity line should be seeing some relief on that bill with the prime rate dropping.  If you haven’t already, make those calls to the Credit Cards to try to get those rates lowered.  But onto the big ticket items that you can use to help increase your bottom line.  Now I will give them to you, but there are always 2 sides of the coin so use them wisely and when you get that extra money each month, also use that wisely.  The first one is to use your tax withholding.  How much of a tax refund did you get for 2007?  Divide that into 12 months, or 26 or 52 paychecks, depending how you get paid.  This is the extra money you can gain from taxes each paycheck instead of giving the Govt an interest free loan for the year.  Now prior to changing your W2, make sure your financial situation is not going to change because you don’t want to get strapped with owing at the end of all this.  If you choose to do this, raise your withholdings and see what happens on your pay check, then when you know how much each raised withholding does you can plan accordingly.  Now if you usually owe taxes and cannot handle the tax bill come April, you should be doing the opposite by decreasing your withholdings to the correct level.   This can be huge, but again use it wisely, make a deal with yourself, use everything you gain on your paycheck to pay down the highest interest rate account that you hold.  Another way you can save a chunk of money is to change your deductible on your car insurance.  You may be carrying a $250 deductible, can you raise that to $1000.  This should change things on your insurance, now you may want to call your agent and check to see what your deductible is currently and what it would change if you increased the deductible.  You need also to think through this decision and make sure you have a game plan if you do decide to up that deductible, where will that money come from if you need to use the deductible.  The next topic is Life Insurance.  You need to have the right amount of life insurance for your surviving family.  Now if you are young, single and don’t own a home, not much use for life insurance.  But if you have a family, plan accordingly, stay at home caregivers, please become aware of the coverage you have if your spouse passes.  This is not a time to stick your head in the sand, know the coverage and be smart to make sure you will be able to take care of all major things in your life.   But you also don’t need to be paying out the nose for a million dollar policy either.  Be smart, know the limits you have and do they cover your outstanding debt.  Also, check with employment benefits, these can be MUCH cheaper than what outside sources are offering.  It is annual enrollment time, compare what you are paying now vs what your company can offer.  Now if your are DINK’s (dual income, no kids) sit down and logically figure out what you would need to provide security, again, no need to go off the deep end in coverage.  Last item being….Statements….sit down with all your statements, look at them, are you being charged late fees, overdraft fees, over the limit fees, ATM fees.  If so, be honest with yourself, add all those up, they can add up to a HUGE amount each month.  Imagine all that money going to principle instead of to the banks/companies in fees.  Using the D2D Money Calendar  can erase all those issues, email and I can shoot you a copy for the remainder of 2008 free.  So with all that being said, those items should provide areas of improvement that may have a huge “bang for your buck” if you take the time to look at them.  And as always, if anyone needs help sorting through all this don’t hesitate to call or email.   Can anyone else think of ways to save?  Add them to the comment section.


~ by debt2dreams on October 30, 2008.

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