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Everyone likes to save money. Doesn’t it make sense to “cut out the middleman?” Shouldn’t you shop around for the cheapest price? When inflation picks up, budgets get squeezed in many households. It can be tempting to “take the cheapest option.” This makes sense in many areas where products are commoditized. Groceries are a good example. There are other aspects of your life where choosing the cheapest option is not a good strategy.
1. Hire a good accountant and stick with them. Taxes are complex. Filing on your own might make sense if your client’s income is from a salary, renting an apartment and have no investments. That’s not your client. Why? Because they are your client! They have some invests and probably other complications (and opportunities) in their lives. Having a long term relationship with an accountant who knows you can save you money in ways you might not realize.
2. Buy quality health insurance, even if it costs more. Your health is not an area where compromise is a good option. You want to know, if you need it, doctor visits, operations and hospital stays will be covered. If you pay for your own health insurance, find a good professional in the business and become their client.
3. Do not neglect health insurance for travelers when you go overseas. It is highly likely your workplace or personal medical coverage stops at the US border. Ever see those ads: “Our health insurance follows you wherever you go in the US?” The unspoken part is your health insurance plan is probably not following you overseas. It likely doesn’t work on cruise ships sailing international waters. Your travel agent or credit card company likely has a policy for this situation.
4. Don’t opt out of the company’s plan for retirement saving. It can be easy to assume “I can save for retirement later.” It does not make sense to opt out of a program when the company is matching your contributions. In most cases, you can borrow vs. your contributions in case of an emergency. It stays as your money. You save on taxes when making contributions.
5. Find a good insurance agent for your home and auto insurance. Insurance is a complicated product area. No one wants to make payments on a policy for years, then discover there are huge gaps in coverage when they eventually make a claim. A good insurance agent can tell you the coverage best suited for your unique situation.
6. Don’t neglect dry cleaning or personal grooming. When money is tight, it can be easy to stretch out the time between haircuts or visit the dry cleaner less frequently. Unfortunately, your manager, co-workers, friends and shopkeepers will see you look unkempt and wrinkled. They will assume you are having financial problems. They might tell others.
7. Don’t stretch out bill payment, hoping no one will notice. The IRS will notice if you don’t make our scheduled tax payments by the due date. Your credit card, power and telecoms companies will charge late fees if you miss their deadlines. This increases the cost of the bill with little or no benefit to you.
8. Deferring home maintenance is usually a bad idea. Have you noticed shingles are missing from your roof? Are you getting leaks during rainstorms? Are you suddenly getting water in your basement? Although you consider this an annoyance, not a problem, these situations don’t go away. They tend to get worse. Projects like roof replacements don’t go on sale or get cheaper. The longer you delay, the more fixing the problem will cost.
9. If your teeth or a body part starts bothering you, pay attention. Do not assume the pain will go away. You likely have a dental plan and medical plan in place. Make an appointment. Have it checked out. Like home repairs, problems often get worse, not better.
Saving money is a good idea. Fining the best priced providers makes sense. Buying a product you don’t understand and skipping getting qualified advice is not a good decision, even if you think you are saving money.
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