Now that I have found a safe haven for my extra cash, I feel much better. However, I am asking myself: “What am I keeping the ‘leftover’ money for exactly?” My emergency fund was depleted a year ago. I have to start replenishing right away. The rule of thumb is to save 3 to 6 months of your minimum bill payments. I will also like to add my deductibles for my auto and renter’s insurance to this amount. So that brings my total to a whopping $5,500. Also, I am planning for two major vacations and one mini-vacation. That another $2500! Where I am going to get the money for all of this?!?!
Recently, I posted an article on Facebook called Save—or Earn--$1,000 by the Holidays. With Christmas is less than 90 days away, I would not be able to make this happen. I am on track to have 2 credit cards paid off by the end of this year. However, I can possibly make this happen by January, when my first trip is planned for. And I need to build up some fun money. So maybe some of the tips in the article will help? I will apply some of them to see if I can scare up some extra cash.
Let’s start with the savings tips:
1). Adjust my tax withholding? - At the beginning of the year, I estimated to have income tax liabilities of $5,160 (federal) and $3,408 (state). So I have a fixed amount of $357 in taxes from the wages from my first job each pay period no matter how much I earn in gross pay. I only felt comfortable doing this because my earnings usually do not fluctuate throughout the year. So is there extra money to be found? According to the withholder calculator at IRS.gov, I have would have an over payment of $637 when I file in 2012. So if I change my withholding and put the funds in my new Orange Savings I could save a total of $656 ($637 plus 1.1% interest for 3 months). But I will more than likely wait until December to see if I am fully paid up before capitalizing on the extra funds.
2). Ditch cable? - I would love to stream through Hulu.com or Netflix. But I made the dumb decision of signing a two-year contract. I called my cable company to see if I could downgrade at least. I swore I heard the service agent snicker when she said no. It would have cost me nearly three months’ worth of digital cable service to end the contract ($350). Seriously. Lesson learned: never make a long-term commitment to service provider: cell, cable, internet, etc. I also loved when the conversation was wrapping up, the agent tried to sell me more services! I had the last laugh in that situation.
3). Increase my deductible on my auto insurance? - The savings are not even worth it in my case. I recently just switched both my auto and renter’s insurance from Progressive to Geico. Geico offered me lower monthly rates and my deductibles were cut in half. I currently pay less than $100 for my auto and renter’s insurance combined. If I doubled my deductibles today, I would save $52.60 over a 6-month period, which is $8.77 each month. This does not even offset the additional $750 that would have to be added to my emergency fund goal… Next!
4). Eliminate Bank Fees? - I actually do not believe in paying for my own money. Therefore, I do not use ATMs that charge fees or engage in debit card transactions that cost money. Furthermore, I do not hold accounts with any financial institution that charges monthly fees. Why should have to help them make extra money? They certainly do not help me earn any of my wages. I do business with local banks and credit unions, as their interest rates are better and service fees are typically less expensive. Also, most of my banking is done online…no paper + no person-to-person contact= low or no banking fees. No extra funds to be found here.
Now, can I earn any addition income based on the article?
1). Sell precious metal possessions? - I do not have pieces of silver flatware or dinnerware. Nor do I have gold jewelry. But I do have sterling silver jewelry I don’t wear. According to a scrap gold calculator, I could make an extra $23 for 5 ounces of silver. But I would want an appraisal in person. I don’t trust mail-in offers.
2). Get paid for my opinion? - The article claims you can earn up to $200 per focus group with Delve. Before you sign up, there is a disclosure page for consumer members. Everything appeared to be standard. However, there are some points that stood out. Delve states “Members of our database have agreed to let us contact them from time to time at their primary e-mail address or call them at home, to ask their opinions about various products and services. Some email communications are sent to request responses via email to pre-screening questions to determine qualification for market research studies. Other emails contain links to web-based pre-screening surveys for qualification for market research studies. We also ask permission to call you at WORK or on your CELL phone. By entering your WORK and/or CELL PHONE number you are giving us that permission…. The research studies at our office might involve a group discussion and/or an interview regarding your opinions on such things as advertising, packaging, or perhaps new product ideas. At other times you might be asked to test a product or take a product home and use it for a specified period of time. Those who participate by visiting our offices usually receive a monetary incentive after completion of the research study.” Basically, there is no guarantee for receiving money for your opinion. I will pass.
3). Sell my stuff? - I attempted to have a rummage sale in July. I had decent items for sale, and I generally take care of my belongings. I sent text messages to about 30 people, only 3 people showed up. I made $55 dollars. I had at least $400 worth of items to sell. I put some of the stuff on craigslist. No takers. I can research consignment shops. I found 7 shops in the Milwaukee Area. I would go to only 2, but the cost of driving to investigate and my time will probably offset any proceeds I will receive. Consignment shops generally have commission rates between 20% and 45%.
In conclusion I have the opportunity to save $637 and earn maybe $23, a total of $660. I can start my emergency savings with this or pay for one of my mini vacations. I have decided to start my emergency savings in December 2011. I already allocated funds each payday for vacation expenses.
But one thing I noticed that the article did not mention was creating multiple sources of income. I have seen this piece of advice repeatedly in various personal finance articles. I believe that it is crucial to use your natural talents and skills to your own advantage. If you don’t, somebody else will, while undervaluing your attributes. For instance, I have a knack for checking facts and figures. So, I found a part-time job in 2010 involving data entry 15 hours a week. That’s an extra $400 each month that goes toward commuting costs to the second job, savings, and some minor expenses. Also, I love writing business plans, and helping small businesses grow and start. I’ve been doing it since 2004 and I haven’t charged high service fees over the years to do it. This is why Éclat Enterprises was started. But I have to wait for a return on my investment before it becomes a stable source of income. Time for a PSA: Support small businesses!!!
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"Putting My Money Where My Mouth Is" is a journal about real life experiences and concerns of Jéneen R. Perkins. The purpose of the blog is to exhibit the real life challenges and answer the tough questions posed by the concepts of business, entrepreneurship and money.