Money Hacks

I must be out of it.. now there are money hacks? Jeez.. I thought it was just creative budgeting 🙂

Here are the ones I like from Liz Pulliam-Weston’s article.

Penny hacks from heaven
The four-penny hack. Want to reduce the number of pennies you lug around? Then always make sure to have four of them in your wallet. That way you’ll always get silver coins back in change, rather than more pennies.

Let’s say your bill at the drive-through is $4.86. Hand the cashier a five-dollar bill and a penny, and you’ll get a nickel and a dime in change. If your bill is $2.29, offer the fiver and four pennies; you’ll get two bills and three quarters back.

Plastic high finance
The credit card hack. If you pay your credit cards off in full every month (which you do, right?), you can give yourself an interest-free loan of a month or more on major purchases simply by charging big-ticket items right after your card’s closing date.

Let’s say your statement typically closes around the 20th of the month. You charge your big-ticket item the day after, the 21st.

The charge doesn’t show up until the next month’s bill, and you typically have 10 to 15 days from the closing date to pay it, effectively giving you a 30- to 45-day interest-free loan. (You’ll want to confirm the closing date, since they can change month to month, but typically that just takes a visit to your card’s Web site or a call to the 800 number.)

…….

If you don’t pay your credit cards in full, by the way, you should be concentrating on paying off that debt rather than charging anything new. End of sermon.

Not for amateurs
Prepay your big bills. This hack is an oldie but a goodie. Total up your big, non-monthly expenses for the year. Those can include holiday spending, birthday gifts, insurance premiums, vacations, property tax payments… anything that doesn’t come in regular monthly chunks. Add in what you expect to spend on car and home repairs (inflate last year’s bills by 10%). Now divide the total by the number of paycheques you receive each year, and have that amount transferred automatically to an account that pays a decent amount of interest.

As the big bills pop up, you transfer money back into your chequing account to pay them. No more sweating about paying for the holidays or that car repair bills — it’s already covered.

What if you can’t cover these non-monthly expenses and your regular monthly bills? Then your budget is out of whack.

Organize, organize, organize
Receipt fun. As much as I tout going paperless, living in the real world means accumulating at least some dead-tree product. Receipts were my big nemesis. I was always losing them, or accumulating a massive wad in my wallet that had to be tediously sorted lest I need to return something, take advantage of a rebate or prove a purchase to the taxman. Then I read Debbie Stanley’s wonderful “Organize Your Personal Finances in No Time” and cobbled together the following system from her suggestions.

Receipts now go in one of three compartments in my wallet. Receipts that I probably won’t need for long, such as those for routine purchases, get stuffed in with the bills; receipts that require action, such as a rebate, get put in the center section; tax-related receipts and those for big-ticket items go in the third compartment. Every week or so I clean out my wallet, taking action on the middle-compartment receipts and filing the tax-related ones.

The “short-term” receipts get put in a folder marked “This Month.” At the end of the month, I move them into the folder marked “Last Month,” while the receipts from that folder get moved to the “Two Months Ago” folder and the contents of THAT folder get dumped in the trash.

This system ensures I keep receipts long enough to check against my credit card statements, if I need to, and to make any returns. But I no longer have to spend valuable time sifting and sorting. Debbie, thank you.

I’m going to try the 4-penny hack at least!!! And maybe pre-paying my big bills… but I’d rather throw it into debt for now, and I don’t actually HAVE any big bills or expenses… literally. Unless you count retirement/emergency fund/debt as bills 🙂