5 Savvy Tips for Spring Cleaning Your Finances During Lockdown

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Posted by The Savvy Retiree on April 11, 2020 in Live Better

Time. These days, we all have a lot more of it than we are accustomed to. The issue is how to use it effectively. 

One excellent way to take advantage of this abundant at-home time is to take a good look over your finances and see how you can improve them. That could mean building a new online income stream, which could provide some additional financial stability in these uncertain times. (You’ll find plenty of ideas for how to do that in the pages of The Savvy Retiree.)

Another strategy is to analyze your outgoings and see if you can save money on expenses. Too often we continue using the same utilities, insurers, and service providers out of habit. That’s understandable. In the midst of our busy lives, it can be hard to find time to review our various options and uncover where we could make some savings. 

But since we’re all trapped indoors for the moment, what better time than right now to do a little financial spring cleaning? Here are five quick and easy tips that could deliver some pretty significant savings and make your life simpler at the same time.

1. Review Your Internet and Cable Providers

Take a look at your internet and cable bills. Are they with the same company? If not, call up each one and ask what the cost of putting the two together would be.

Also, see if there is a new provider in the area. Sometimes they offer great initial discounts for up to two years. You may be able to get the same service as you currently enjoy, or better, for a lot less.

2. Check Your Insurance Coverage

Look at your property and casualty coverage for your home and your car. Are they with the same company? If not, grouping the two together will usually save money. Often a simple call to your insurance broker mentioning that you’re trying to save some money and keep your coverage will produce amazing results. If you have an excellent track record, consider raising your deductible, which always lowers the premium.

3. Change Cellphone Provider

Review your cellphone plan. Changing companies often results in a lower bill. Alternatively, consider whether you are using all the parts of the plan for which you are currently paying. For instance, if you have an unlimited data plan but use less than 10 GB or 20 GB of data a month (you can usually check your monthly data usage on your provider’s app), consider switching to a plan with an appropriate limit. It could save you hundreds of dollars a year.

4. Restructure Debt

If you have some debt, consider moving it to a zero-interest credit card. Right now, multiple credit card companies are running promotions with up to two years of 0% interest. A zero-interest card makes sense under the following conditions: a) you can get all the debt paid off during the promotional period, and b) the card interest rate at the end of the promotional period is equal to or lower than your current rate. Also make sure you check the transfer fees.

However, recognize that when you move money to another card, it will lower your credit score. My wife and I moved some debt to a zero-interest card and our score dropped by about 70 points. But by the time we paid it off, it was back above where we started. Also consider what perks a new card could offer you. We use our card and pay it off monthly as we get double points on anything we charge, and we can use the points with any airline. As expats and frequent travelers (virus lockdowns permitting), this is a big perk for us. 

5. Create a Financial Records System

This is one the best steps you can take to manage your finances. Once you set up a simple at-home tracking system, you’ll be surprised at the insights you gain.

Every week, I spend 15 minutes writing down the current balance of every account my wife and I have in an Excel spreadsheet. There are 11 lines in my spreadsheet: company checking, personal checking, personal bank savings, online savings (grandchildren), online savings (personal), my IRA, my wife’s IRA, brokerage account, American Express credit card, Delta credit card, and Capital One credit card. When I input the new balance, I add up the short-term cash and the savings, then all the investments (IRAs and retail brokerage), and subtract the debt. This tells me my cash value relative to my short-term debt position in an instant, and lets me know if we need to move money from one place to another. 

There you have it. Five ways to save money, consolidate your bills, and make your life easier. All of which can be accomplished without ever leaving your home.

Written by A.W. “Chip” Stites