Some of us have been hit harder by the recession than others. But we’re all in this together. As our economy shifts and changes, we all need to focus on spending wisely. Here are twelve bonus money-saving tips to cope during a recession. Let’s focus on what we can control.
1. Itemize when you file your taxes this year. Taking the time to fill out the “long form” will allow you to take legitimate tax deductions. That could save you money if you will owe taxes this year. Just make sure not to take deductions you can’t prove with receipts — paying IRS fees are not fun.
2. Avoid a tax refund. Yes, it might feel like gift. You might enjoy getting receiving it! But if you get a tax refund, that means you could have had that money working for you all year long. Uncle Sam doesn’t pay interest! Adjust your withholdings so you don’t get such a large refund next year (or, ideally, no refund at all).
3. Avoid getting your refund early from anyone except the government. Those “rapid refunds” are loans. And the interest rates are outrageous! If you need your refund early, file early. Don’t be tempted to let a third-party “spot” you on your eligible refund.
4. Do your banking online. It will save you time and postage and is perfectly safe. Find the best online bank by browsing community reviews posted on a variety of Web sites.
5. Emergency fund. Let’s say it again: emergency fund. Ideally you want to have three to six months of expenses stockpiled if you lose your job, have an accident, or need a major car or house repair. Building an emergency fund can be a challenge, but it can be done. Commit to contributing a certain amount of money each week. Diverting it to a new account helps you refrain from spending it.
6. Face and fix your debt. Now more than ever it is important to pay off your credit cards. Do not close your account. You want to protect your credit score. Cut them up and start paying them down. The sooner they are paid the sooner you’ll have your freedom. A recession is stressful enough. Do yourself a favor and do whatever is necessary to pay off your credit cards.
