Raise your hand if you’ve noticed that some items you regularly buy are costing you a little bit more in 2021 than they did in 2020. Most hands are probably going up. Gas prices, food prices, and different goods have all seen their prices rise some in 2021 for various reasons, but what do you do if your income didn’t go up as well? Often, you must find ways to offset those costs. Some costs are tougher to offset like gas or food, but there are other expenses that can be examined for saving opportunities.
Insurance | One expense that we all pay every year, and often hope to never use, is the various forms of insurance. Whether it’s health care, homeowner’s, automobile, travel, or long-term care insurance, we all pay for some sort of insurance, and they almost never seem to get cheaper. So how can we minimize costs? Don’t be afraid to shop. Have you ever been to the store to buy food and saw that one brand of an item was cheaper than the identical item of a different brand? How many of us have bought the cheaper, identical item? Insurance should be the same. You may not be able to shop your healthcare insurance if it’s provided to you through work, but your home or automobile insurance should be checked annually for savings opportunities. If the coverage is the same and the company has a good rating, take the cheaper premium.
Banks | Another interesting way to save some cash are reviewing the charges your bank is charging you. Banks generate much of their revenue from fees they charge on ATMs, check-writing services, overdraft protection, and more. If you pay your bills with checks and find that you spend too much on checks, consider the online bill pay services at many banks. Often times, this is a free way to avoid fees, pay your debts on time, and can be automated to save you time! Additionally, review your statements regularly for any fees that are being charged. Sometimes these fees can be easily waived by managing minimum deposits or having something like an automatic deposit set up on an account. It may not seem like a lot, but these fees will add up over time. This can be applied to anything that gives you monthly statements like cable, utilities, cell phones and other subscriptions.
Paper Vs. Electronic Delivery | Finally, another way to save some cash around the margins is to make sure you’re set up for E-Delivery with your brokerage service. I recently opened new, highly commendable Uniform Transfer to Minor Act (UTMA) accounts for my kids. I thought I registered the accounts for document e-delivery that the custodian offers its customers, but I recently received a paper statement in the mail, and for some reason one account was not signed up for E-Delivery. It is not a bad thing to get paper statements, but in this case, there is actually a benefit to getting my statements by email. The custodian (the financial institution that holds securities and makes transactions happen) offers free transaction costs on the buying/selling securities if enrollees choose electronic delivery. So, I verified my settings were correct with the custodian to confirm electronic delivery, which then allowed my accounts to trade with no transaction costs, saving me and my children some money.
These are just some of the simple ways I’ve cut costs for myself recently, and the best part is that I didn’t make any sacrifices. In turn, I’ve used these same techniques to help do the same for my clients.
It’s always a good time to review your plan. Don’t be afraid to reshape your goals based on where you are today.
Anthony M Corrao | CFP®