Improving Your Retirement: 97 Ways to Cut Expenses
by Sue Stevens | 01-13-05 10:30 AM
We often discuss ways to invest money for various goals like college funding, big-ticket purchases, perhaps even re
enough time thinking about where to find the money to invest. So today, you'll find lots of good ideas to help you s
Some of these may be familiar and some may be new to you, but if you follow through on them, you'll make signifi
1. Pay off your credit cards monthly. If you can't pay the balance, you shouldn't be charging it.
2. If you must charge, switch to a no-fee or low-fee credit card. Visit www.bankrate.com to compare
3. Shift your higher-rate credit-card debt to a lower-rate line of credit. Then you can deduct the interest on
4. Use a home-equity loan to pay off auto loans. The interest is tax-deductible.
5. Make your mortgage payment biweekly instead of monthly. You'll save interest payments and be able to
6. Pay extra principal payments when paying your mortgage. As above, you'll save interest payments and b
7. If your house down payment was for less than 20% of the value of the home, cancel your private mortga
balance is 80% or less of the value of your home.
8. Lock in a fixed mortgage rate so that you don't find yourself in a position where your interest rate increas
make your house payments.
9. Only use ATMs that don't charge service fees.
10. Pay cash when possible. Psychologically it’s harder to spend than using cards. Plus, you'll save on interes
11. Check your credit history. Make sure everything is accurate. If mistakes have been made, your credi
you might be paying more in interest charges than necessary.
12. If you have a tendency to bounce checks, deduct a cushion from your balance to avoid paying penalty fee
subtract $100 that you pretend isn't there. If you accidentally go below $0, you'll hit that cushion rather t
When you subtract the cushion, you may want to use a different color ink so that you remember how mu
13. Participate in company retirement plans to save on taxes. Your taxable income will go down and you'll ga
while deferring taxes to the future.
14. Take advantage of a 401(k) (or other retirement plan) match.
15. Don't take a loan from your 401(k). You'll save on double taxation of that repaid interest.
16. Take advantage of company-sponsored reimbursement plans--medical, education, child care.
17. If your company offers free advice for your retirement plan, take advantage of it.
18. Periodically, you can talk to financial planners at no cost (pro bono). Look for newspaper money shows or
19. Take advantage of any free health screenings at work.
20. Switch to an HMO from a PPO for health insurance.
21. If you are self-employed, consider switching health-insurance plans to a high-deductible plan to take adv
22. Take advantage of medical prescription drug cards.
23. Get multiple quotes on insurance. It pays to shop around.
24. Raise the deductible on your homeowner's- and auto-insurance policies.
25. Increase the waiting period on your long-term care insurance to six months or longer.
26. Review life-insurance premiums. Can the dividends pay the premium instead of purchasing more coverag
27. Buy term life insurance rather than whole-life or universal-life insurance.
28. Use a two-checkbook system. Use one for regular recurring expenses and the other for bigger-ticket item
big item, keep saving.
29. Check with the state and federal governments to see if you have money owed to you. If your bank (or ot
company or governmental agency) hasn't heard from you in five years, your property may be considered
required to hand over the property to the state. This applies to safe-deposit boxes, savings accounts, che
life-insurance policies, CDs, and more. Even unused gift certificates can be considered unclaimed property
claims in your state, go to the National Association of Unclaimed Property Administrators' Web site.
30. If you are considering moving or retiring, look into places where the cost of living and/or state tax rates a
on the topic.
31. Keep track of yourcost basis on investments to save money on taxes when you sell an investme
32. If you have a loss on your Roth IRA (the current balance is less than what you contributed), consi
deduction for the loss on Schedule A of your tax return.
33. Avoid paying penalties on retirement distributions by waiting until you're over age 59 years and six mont
required minimum distributions (RMDs) from traditional IRAs when you're age 70 years and six months.
34. Make IRA contributions early in the year to take advantage of additional months of tax deferral.
35. Do a 1035 annuity exchange to a company with lower expenses.
36. Put in tax-deferred accounts investments that generate ordinary income.
37. Place in taxable accounts tax-exempt bonds.
38. Put investments that generate capital gains or dividends (both taxed at lower rates than ordinary income
39. If you've inherited an IRA, understand how to stretch out the tax deferral by taking the correct mini
Exchange Traded Fun
40. Pay attention to the expense ratios on mutual funds you buy. Consider using
41. Pay attention to the brokerage fees you pay when buying stocks.
42. Use prior-year capital-loss carryforwards to net out realized capital gains. You'll pay less tax.
43. If you have stock options, consider holding the shares after exercise for at least one year. You'll pay capit
44. Don't get divorced.
45. Quit smoking!
46. Save all your change and use it to buy gifts next year.
47. Go to matinee movies instead of movies at night.
48. Give up expensive health-club memberships. Learn to do exercises outdoors or at home.
49. Cook in bulk and freeze.
50. Turn down your home thermostat a couple of degrees.
51. Only wash full loads of laundry and dishes.
52. Plan parties where everyone brings something.
53. Bring your lunch to work or scout out the inexpensive places to buy lunch. Look for inexpensive items, lik
54. Have cocktails at home and then go out. Eat dessert at home.
55. Order vegetarian when you're out.
56. Look up phone numbers in the phone book instead of paying for directory assistance.
57. Sell on eBay stuff you don't need or use any more.
58. Get a roommate and share expenses.
59. When traveling, eat outside of the hotel.
60. Try a vacation at home. See and do the things you've always meant to do and save on hotel costs.
61. Compare rates for cable and satellite. Go with the less expensive option. Only sign up for the channels yo
62. Consider dropping your land-line phone at home. Your cell phone may be all you need, and some come w
63. Investigate phone service via the Internet.
64. Use regular gas instead of premium.
65. Cut back on eating out.
66. Be a smart grocery shopper: cut coupons, shop at discount stores, and stock up on sale items. Check out
67. Stop buying clothes that are "dry clean only." Learn to iron.
68. Cut back on trips to Starbucks.
69. Consider buying a certified preowned car instead of a new one.
70. Buy energy-efficient appliances. They're cheaper in the long run.
71. Get rid of "add-on" services for your phone/TV, etc.
72. Shop resale stores and estate sales.
73. Shop the clearance racks.
74. Use the public library to borrow movies or books for free.
75. Make your own greeting cards on the computer.
76. Send free e-cards and save on postage.
77. Don't renew magazine/paper subscriptions you don't have time to read.
78. If your doctor approves, fill prescriptions with the generic form of the drug.
79. Plan your purchases to avoid impulse buying.
80. Give time/services instead of "things" for gifts.
81. Take public transportation.
82. Keep up maintenance on cars. It may prevent costly future problems.
83. Get annual physicals at your doctor’s office. They may also prevent costly future problems.
84. Track your spending. If you write it all down, you'll probably spend less. And you'll know exactly where yo
85. Wait a little longer between manicures (try doing one yourself!), massages, or highlights (try a local train
86. Use your senior discount (if eligible). Go to http://www.aarp.org/benefits/.
87. Skip taking a cab now and then. Walk or take the bus!
88. Watch out for shipping costs when buying via the Internet.
89. Wash your car at home and skip the car wash.
90. Pay bills online. Save postage.
91. Don't buy mutual funds just before capital gains distributions. You'll save on taxes.
92. Use a budget, especially for items like gifts.
93. Buy a hybrid car and save on gas. You may even be eligible for a tax credit.
94. Trade in your car with high insurance premiums for a car with lower insurance premiums. See
95. If you see something you want in a catalog, wait a week to see if you still really want it.
96. Join your local YMCA instead of an expensive health club.
97. Buy an I-PASS and save on highway tolls (if you live in Illinois or nearby, that is).