November 2017

Six Easy Ways to Find Extra Money

Author: Kent Thune

If getting a raise at work is about as likely for you as winning the lottery, now may be an appropriate time to focus on some of the more controllable aspects of putting extra money in your pocket. In fact, the most reliable and quickest means of increasing your bottom line is you, which is to say that the most valuable aspects of personal finance include things that are within your control.

You can’t control your boss; you can’t control the lottery; you can’t control the stock market. But you can control your own behavior! With that backdrop in mind, here are some quick and easy ways to increase your bottom line:

1. Adjust your tax withholdings. Your boss might not be quite ready to hand you a raise, but your human resources department or payroll person will be happy to hand you a Form W-4 to adjust your withholdings, which is the best way to add more money to each paycheck. According to the IRS, the average tax refund for 2016 was $3,050, and this does not include refunds in categories such as business income taxes, estate and trust income tax, gift tax and employment tax. That’s a monthly savings of more than $250! While it’s nice to get a big refund every April, it’s not smart finance. Rather than give the federal government a tax-free loan, it’s best to get your money now and let it work for you throughout the year. When adjusting your withholdings, remember that the more exemptions you claim on the form, the less money is withheld by the federal government, therefore more money in your paycheck now, rather than in a refund check later.

2. Pay down high interest debt. A great way to give yourself a raise is to decrease your debt. While this means more money going out in the short term, it’s a smart investment for keeping more money to yourself in the long run, rather than paying out interest to creditors each month.
According to CNBC.com, the average American household had $8,377 in credit card debt in 2016. Assuming the average credit card interest rate of 15 percent, eliminating that debt could save more than $100 per month in interest payments alone. In the meantime, do your best not to use credit unless it’s an emergency.

3. Sell stuff you don’t need. Depending upon the amount and type of unneeded things you have lying around your house, garage and attic, selling your stuff can quickly add up to hundreds or even thousands of dollars in extra cash. How much money you make also depends upon how much effort you’re willing to put into the process and how much stuff you’re willing to let go. Probably the most common unneeded items you have are in your closet, under your bed or in your dresser. Yes, we’re talking about your clothes! If you haven’t worn it in two years, chances are you won’t wear it again. Get rid of it!

For local places to sell used clothing, try a Google search for “consignment shops near me” and you’ll find some good options for comparison. However, expanding your market by listing items online can possible fetch better prices than local options. Some websites that make it super easy to sell your clothes include Poshmark.com, ThredUp.com, eBay.com, and Tradesy.com.

Another category of big ticket item you can sell relatively easily is gold jewelry. Although the spot price of gold is off its historic high, the price today is still around $1,300 per ounce. If the gold is high quality (18 to 24 Karats), a few small items, such as a ring and a necklace, could get you hundreds of dollars.

Some of the most expensive items in your home include smart phones and other technology. For Apple and Android devices, try Swappa.com. For gaming consoles and video games, your best bet may be the local Gamestop, which has locations in Beaufort and Savannah. Selling directly to a customer on Craigslist or eBay.com could possibly get you competitive prices on electronics.

4. Track your expenses. You won’t find lost money if you’re not looking for it, and the best place to look is in your own bank statements. Most financial experts agree that the first step in creating a saving plan is to track expenses for up to three months. If you’re responsible with a debit card or credit card, try to pay all your bills and make all your purchases on one card. Then look at the monthly statements and highlight the items that are unnecessary purchases. If you’re like most people, you likely spend dozens or even hundreds of dollars per month on lattes, snacks, alcoholic beverages, entertainment and eating out. But don’t start panicking yet! You don’t have to cut out all the fun stuff to save money. Just give yourself an allowance for the non-essential items, stick to it, and save the rest.

5. Create a budget. Once you spot the spending leaks, create a budget that works for you. Consider using the envelope system, which is just as it sounds. Put cash in envelopes, each with the monthly cash you budget for the respective category you label on the envelope. When the cash is gone, you don’t spend any more on the item until the next month, when you refill the envelope.

If you like to use Internet and smartphone tools, Mint.com has a popular app that helps users create a budget, track spending, monitor credit scores, and keep up with potential fraud. After downloading your account information, the app service allows you to combine all your finances in one place, giving you a constant overview of your financial status. You can also set up alerts and automatic bill pay.

6. Rent out your house. If you don’t live in your house year-round, you can make money renting to someone else. And since Hilton Head Island and the surrounding Lowcountry community is a highly sought-after destination, you could have success finding a renter with the popular service, Airbnb, which is an online marketplace that enables property owners to rent or lease short-term lodging, including vacation rentals, apartment rentals, and hotel rooms. If you’re not looking for extra dollars, but want to offset your planned expenses, you could help pay for your own vacation by renting your home to others while you’re out of town.

Now, review all these items. If you take advantage of even half of them, you could potentially save thousands of dollars per year.

Kent Thune is a freelance writer and the owner of a Hilton Head Island investment advisory firm, Atlantic Capital Investments. He is also a personal financial counselor to service members on Parris Island. You can follow his musings on mind, money and mastery of life at TheFinancialPhilosopher.com or on Twitter @ThinkersQuill.

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