“Don’t Tell Me You Can’t Save Money!”
Pay Less in Taxes- Are you using a Certified Tax Coach? Are you doing your taxes yourself? Then you are wasting money. Exxon-Mobil pays a lower effective tax rate than the average American. Exxon-Mobil’s effective tax rate of 17.6% which is nearly 16% BELOW the average individual federal tax rate, which is, as of a 2007 study, was about 20.4%. In other words, find someone (a Certified Tax Coach) who knows the laws and codes and can save you the most money possible. The mistake individuals make that Exxon-Mobil doesn’t make is spending the money to hire a pro. Not a Certified Public Accountant, but a Certified Tax Coach. Would you pay $300 in fees to save $1,000 in taxes? Every year! Isn’t it worth it?
Avoid Unnecessary Fees- What is the nastiest 4-lettered F-word when it comes to your finances? FEES. They are everywhere! From your 401K, investments, to personal bank accounts, ATMS, Credit Cards. Do your homework! They will LITERALLY nickel and dime you into poverty. Know what you are being charged and why and if you are getting value from the charges. The cheapest is not always better, but the most expensive is never better. Eliminating fee’s can save you hundreds even thousands of dollars a year. Find banks, credit cards and financial experts that don’t fee you to death. On the investment side start with a Registered Investment Advisor that does not use retail mutual funds. It’s YOUR money!
Confront Your Behavioral Beast- This is the hardest one for people to face and overcome. We are all guilty in this area. It’s a matter of identifying it and tackling it. From daily lattes, to dining out even the “cheap” pizza dinner. Tighten the reigns on your spending. Brewing your own coffee and cooking at home can save you thousands. Even if you buy 1 cup of coffee a day and only during your work week, over the span of a year at $4.50 a cup that’s nearly $2,000. Dining out three times a week for a family of 4 can cost upwards of $5,000 a year on the low end. It is OK to live a little, but too much of a good thing is no longer good.
Be Disciplined- There is a lot of truth behind the theory that you won’t spend what you don’t have. Automate your savings by having a portion of your paycheck or other income go directly to a savings account or retirement account. Ask your HR director how to split up your direct deposit. If you want to vacation or reward yourself with a new TV or fix your car, you can set up a special savings account or money market and do the same with your paychecks. Also, when it comes to investing the lack of discipline costs investors 6% a year in returns according to a 2011 Dalbar study.