How to simplify your financial life and spend money on things you really want
By Dana Dratch | Published: January 2, 2018
A new year means a fresh start. And who doesn’t welcome the chance to simplify their financial life with a few money hacks?
Here’s a menu of tips, tricks and apps to keep up with bills, avoid penalty fees, spot bogus charges, track spending, log card rewards and – best of all – use your money for the things you really want.
1. Track every expense for a month
Think you have money, only to discover your wallet is empty? Here’s a neat trick to see where that cash is going:
Get a checkbook ledger or free phone app (like Notes or OneNote). For a month, log every dollar you spend – even if it’s for a vending-machine bag of Cheetos, says Stacey Black, financial educator for BECU (formerly Boeing Employees Credit Union).
Alternate hack: Use one credit card for all your out-of-pocket spending. (But only if you sub it out for available cash and pay the full balance. Interest rates are on the rise, so make sure to never carry a balance.)
With a card, “every expenditure is shown and can be categorized,” says Jill Gianola, a certified financial planner and owner of Gianola Financial Planning.
What you’ll get after a month is the real, unvarnished truth about where your money is going. Now you can plan for reality.
Another tool to help: Mint.
“There’s no better way to view all your bank and credit accounts and loans all in one place,” says Joe Ridout, consumer service manager for Consumer Action. Mint anticipates bill due dates, and “can email or text you, in some cases,” he says. “It’s also pretty good at keeping track of your bank fees or annual fees.”
And it’s “very good” at tracking and categorizing your spending when you use both credit and debit cards, he says. Plus, it’s free.
2. Review those statements
The big danger of using autopay is that you’ll slack off when it comes to reviewing the actual monthly statements. Which means you could miss errors, overcharges and those sneaky little add-on fees.
Now that many of us get statements via email, some consumers barely glance at them, says Gianola.
Set aside time (weekly or monthly) to go through bills. That’s also a good time to look for items you’re paying for but no longer using or things that you can scale back (such as subscriptions and data plans).
Hate this task? Make it a point to treat yourself (with a hike, a movie, a meal out) when you’re done.
“It does a good job of detecting renewing auto-subscriptions,” says Ridout. With bank fees, it contacts the bank to “try to get the fee reversed.”
Truebill also tracks bills looking for cost or interest increases and add-on charges. The basic service is free. If you elect to let it get you a refund on bank or credit card fees or ask it to negotiate a better deal on services, the app keeps a percentage of the savings, usually 30 percent, according to Truebill co-founder and CTO Idris Mokhtarzada.
3. Check out your financial institution’s money management tools
Your own bank or credit union might offer the very tools you need. One example, BECU’s Money Manager can set reminders and autopayments. It also can fold in non-BECU accounts and give a breakdown of your spending, says Black.
Another e-tool to help: MyMoneyCheckUp.org.
After you’ve paid the money bills, treat yourself to a free financial assessment. Take “5 to 10 minutes and answer the questions about your own financial situation,” says Bruce McClary, spokesman for the National Foundation for Credit Counseling. “And come out of the process with a list of financial recommendations.”
Among the questions to answer are how confident you are about paying off your loans and credit cards and whether you have a savings or retirement account.
If you want more hands-on help, MyMoneyCheckUp also can connect you to a local, nonprofit financial counselor.
4. Pair autopayments with balance alerts
Autopay features are great, especially if you travel or tend to forget bill due dates. However, autopayments pose one big danger – overdrafting your bank account. And that can be just as bad as missing bills.
If you set up automatic payments, pair them with balance text alerts or email reminders. So, if that gas bill is due on the 15th, a balance text alert ahead of time will help you verify there’s enough in the account to cover it.
“Most credit cards I know will send you an email a certain number of days before it’s due,” says Gianola.
McClary advises setting those balance alerts at least two days in advance of any automatic payments. That way, you’ll have enough time to add money to your account or postpone the autopay process, if needed.
An e-tool to help: Dave.
This app helps you to break the cycle of overdrafting by sending timely alerts, says McClary. But if you mess up, it will also connect you to lenders who loan up to $75 at 0 percent interest – and you tip whatever you feel the loan is worth.)
Membership is $1 per month.
5. Establish the same due date for all your card bills
This one is for the folks who pay off card bills in full every month. (That’s you, right?)
Video: Credit card payment due dates explained
Many card issuers allow consumers to select their monthly due date. Just call your issuer or visit a local branch to find out if you can do this.
“It makes sense on a psychological level,” says Ridout. And it can save time and anxiety.
It can take a couple of billing cycles to change dates, he says, “but it’s easily done.”
6. Shop services and speak up
When it comes to bills or plans (for phones, texting, media or data), how much more are you paying than when you were a new customer? Once those introductory offers expire, services can get expensive. But if you contact the provider “and indicate you’re frustrated with how much you’re paying,” you could get a better deal, says Ridout.
Consumers get comfortable and don’t shop around, “even though they may save a substantial amount by doing so,” he says.
The same applies for your credit card terms. This is the time to review how much you’re paying in annual or late fees and what your interest rate and credit limit are. If you want a higher credit limit, lower APR or fee waived, call your card issuer. As a recent CreditCards.com survey found, most people who ask for better card terms get them.
In fact, according to our survey, of those who ask for better card terms:
- 87 percent received a late payment fee waiver.
- 69 percent got a lower interest rate.
- 89 percent received a higher credit limit.
- 82 percent had their annual fee waived or reduced.
7. Open a second account for “periodic” expenses
Tired of going over your budget for bills that pop up regularly at periodic intervals, such as insurance?
If your bank or credit union lets you open a second account for free, use it to hold the money for those periodic payments that come quarterly or annually, says Black.
Black’s hack: Divide the annual cost of those periodic payments by 12 and sock away that money every month. Then when you need to make those annual or quarterly payments, it won’t be a strain.
8. Stay on top of your card rewards
You’re paying and working hard year-round for your credit card miles and points. Keep track of them to make sure you are putting them to good use and don’t let them go unused before they expire.
If your rewards card comes with annual travel credits, the check their expiration date near the end of the year. These annual perks are use-them-or-lose-them in nature, so make sure to redeem them before they go to waste.
A helpful e-tool: Wallet.
Our free Wallet app helps you to maximize your rewards on all of your credit cards when you shop. You can refer to the app in a store, restaurant or other business to learn which card you should pay with to get the most cash back, points or miles.
9. Give yourself spending money
If you want to create a plan that allows you to live life and meet some financial goals (more savings, money to travel, etc.), make sure you allow yourself some spending money, whether it’s for coffee, the vending machine or the bookstore.
“People don’t want to sacrifice everything,” says Kaja Olcott, communications director for RewardExpert. “They don’t want to live like hermits.”
So, if eating out a few times a week makes life easier, spend a little less at the grocery store. Same 21 meals every week, just less wasted food.
See related: Save money in the new year with these 8 card tricks, Credit card bill autopayments: tips for getting it right, It’s never too late to learn about personal finance
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