31 Essential, Frugal and Wise Actions

January is the longest month of the year. Granted, six other months also have 31 days. But none last as long as January. To help pass the time, I present you with 31 Frugal and Wise action items. Make that long, slow slog through January (and February) profitable. Enhance your finances.

I’ll be breaking down the recommendations into six installments between now and the end of the month. (Unfortunately, 31 is a prime number and can’t be evenly divided.) Here are Actions 1 – 6:

1. Review Auto and Home Insurance Policies: Call your current insurer and ask about reducing premiums; get quotes from competitors. Some of you might have experienced what I have: premiums go up year after year but then you phone your insurer and somehow, they find a way to reduce your premiums. Definitely worth a 10-minute call. If your present insurer can’t do much for you, it’s time to shop around. Possible ways to save: (1) increase deductibles (2) cancel comprehensive and collision coverage on older cars (3) ask if you are you eligible for discounts because of your employer, alma mater, memberships or affiliations (4) get a discount purchasing home and auto policies together from the same insurer (5) ask about discounts for teen drivers with Driver’s Ed and good grades. But avoid skimping on liability coverage limits. Here are the J.D. Power rankings for auto insurance: and homeowners insurance:

2. Consider Umbrella Liability Insurance: As you faithfully practice Frugal and Wise ways, your savings and net worth are bound to increase. You should consider adding an umbrella liability policy to augment the liability coverage provided by your auto and home policies. Typically, an umbrella policy brings your total coverage up to one or two million dollars. Yet, the cost is reasonable, perhaps several hundred dollars to around $1000 per year. Just remember: a million bucks ain’t what it used to be…

3. Start Gathering Tax Records: For most folks, preparing a tax return is less painful than a root canal, but not by much. Be on the lookout for 1099 and W-2 forms arriving in the mail or made available online. Tally up last year’s charitable contributions and other deductions. If you are getting a refund, you’ll want to file as soon as possible. If you owe taxes, you don’t want surprises – better to know sooner than later and be prepared. Make an appointment now with your accountant or tax preparer. If a Do-It-Yourselfer, start your return online or with tax preparation software. Here are tax prep software reviews from two sources: http://www.pcmag.com/article2/0,2817,1904319,00.asp , http://www.thesimpledollar.com/best-tax-software/

4. Check Your Payroll Withholdings: If you anticipate getting a BIG tax refund this year, congratulations! You just gave Uncle Sam an interest-free loan for the year with your hard-earned money. I realize that many, if not most, taxpayers prefer large refunds. But as the Frugal and Wise, you should be taking a different tack: increase your take-home pay by reducing tax withholding. Then immediately save or invest the difference. Just don’t overdo it; withhold too little and you could end up paying a penalty. Come every April, you ideally should owe Uncle Sam a modest sum, say, a hundred dollars or so. Ask your payroll or HR department for a W-4 form to increase the number of exemptions you claim (the more exemptions, the less taxes are withheld from your paycheck.)

5. Resolve to NEVER Pay ATM Fees Again: Believe it or not, the average ATM fee is now $4.57 per transaction! This is SO unnecessary. You might as well be tearing up Five Dollar bills and scattering them in the gutter! Tips for locating surcharge-free ATMS: (1) Convenience stores – 7-11, Wawa and Sheetz among others (2) Drugstore chains: CVS, Walgreens, Rite Aid (3) Your bank or credit union’s website may have a directory of free ATMs. Note: some “free” ATMs might ask if you want your account balance. Just say No! Otherwise you could get dinged 50 cents or a dollar. If it’s your bank that’s charging the fee, it’s time to switch banks or, better yet, join a credit union.

6. Pull Your Credit Report: You are entitled to a free credit report every year from each of the 3 major credit agencies: (Equifax, Experian, TransUnion). It’s important to verify the accuracy of your credit record as well as to detect any signs of fraud or identity theft. Visit the online portal annualcreditreport.com – you can either access your credit reports online or download a form to mail a given agency. I suggest staggering the three agency reports so that you are reviewing your credit record every four months.

That’s all for now. As always, your input and suggestions are welcome. The next installment will include Actions 7 – 11. Cheers, Paul

© 2017 Paul J Reimold