For the unfamiliar, MacGyver was a show that aired in the eighties that featured a secret agent named Angus MacGyver. MacGyver quickly became known for using any trick of the trade to get himself out of hot water. With the following tips, you can become the MacGyver of your own personal finance situation and you won’t even need the help of a Swiss Army knife or duct tape to do so. Even if you’re not the star of your own TV show, it’s easy to use the following tricks and tools to master your finances.
1. Track Current Spending
To know how efficient you are with your spending habits, you must first take stock of the amounts that you spend on goods and services every month. Before doing anything else, keep an Excel spreadsheet handy to track your spending habits. Only when you know where your money is going can you work toward changing your habits.
2. Create a Budget and Stick to It
Using Excel and the information from your spending habits, you can create a budget of expenses and income. This will set clear guidelines for you to start making better money decisions in the future. In your budget, allow a specific amount for food, utility bills, clothes, rent/mortgage, insurance and any other basic needs. When you know how much your needs cost every month, you can adequately save the rest or budget for larger purchases in the future.
3. Prioritize Needs Over Wants
We all love to spend money on shoes, video games, and other items that aren’t qualified as necessities. List out your spending habits and prioritize the things you absolutely need, over the things that you want. If you budget accordingly, you can save money for the things you want without forgoing the necessities.
4. Learn How to Say No
When you’re looking to buy something, it’s easy to say yes to purchases that you or your family member wants. Say no to dining out, movies and other expenditures that aren’t in your budget. Doing so allows you the chance to save money for more important items.
5. Stop Auto-Saving Your Information on Shopping Portals
If you want to save cash and avoid impulse buys, delete any of your stored credit card information on portals where you shop often. eBay and Amazon don’t need your saved information! Keeping your banking information saved only makes it easier to buy things you don’t need. Erase the information and you erase the ease of use for these sites, allowing you the ability to save that cash for things you might need in the future. Erase the information and you erase the ease of use for these sites, allowing you the ability to save that cash for things you might need in the future.
6. Live Below Your Means
If you make $2,000 per month, then learn to budget like you’re only earning $1,500 – when possible. This helps you save that other $500 per month for unexpected expenses like car and home repairs.
7. Check Your Credit Score and Report
Using CreditKarma.com and AnnualCreditReport.com, you are able to find out both your credit score and credit reports online – for free! It’s important to know where you stand when the time comes to get a loan for a home or vehicle.
8. Use Zero Interest Credit Cards to Payoff Higher Interest Rate Cards
If your credit is great, but your interest rates are high, open a zero interest credit card to pay off the higher interest debts. This not only clears the other revolving lines of credit from your credit history, but it’s also ZERO INTEREST DEBT! No one wants high-interest rates, so eliminating them can lower your bills and your level of stress.
9. Freeze Your Credit Cards – Literally
If you have a problem with whipping out your credit cards at the drop of a hat, then there is nothing better than leaving your cards at home. If you freeze them – literally, you won’t be tempted to use them everywhere you shop. Credit cards should only be used for emergencies, but saving money is the key solution to all financial matters. Budget for emergencies and use cash to pay for items that you want to buy. Seeing the realism of spending cash may help curb your appetite for spending.
10. Obtain a Rewards Based Checking Account
There are banks out there that will give you certain rewards for opening their checking accounts and keeping a specific balance in the account. Search Google for local banks that want to give you free cash – because who doesn’t like free cash?!?
11. Setup an Account for Fun Money
Assign one account that is for the necessities in life like paying bills and the rent. Designate another account that is just for fun money. You can check the balance online using the bank’s app to see if you are able to make impulse purchases. Going a step further, you can automate small deposits into this account every time you get paid so that the kitty grows as you work. When you don’t see the small amounts of money getting trimmed from your account for necessities, you won’t miss it. However, it will be a nice surprise when you check out the “fun money” account three months down the line.
12. Use Negotiation Tactics to Save Money
We all have bills to pay and sometimes we get charged fees for being late. This is normal, but knowing how to negotiate for waivers of fees can go a long way to helping you save money. A penny saved is a penny earned, right? If you have a bill that has gone to collections, then knowing certain negotiation tactics can save you from paying fees that you can get waived. Negotiate like a pro and always ask if there is something that can be done about a late fee. A good trick of the trade is to remember that a closed mouth doesn’t get fed. What this means is that if you don’t ask, then the answer will always be no. Banks don’t waive fees because they like you – they waive fees because you’ve gone out of your way to ask them to do so.
13. Know Your Rights In the FCRA and FDCPA
Speaking of bill collectors – you should know that when you’re contacted by debt collectors, you have sets of rights that can’t be trampled upon. The FCRA (Fair Credit Reporting Act) is strict legislation that governs creditors when reporting your credit history to Equifax, Experian, and TransUnion. Basically, it tells creditors that they cannot report anything to the three major credit reporting agencies that isn’t true. The FDCPA (Fair Debt Collection Practices Act) governs the treatment of consumers by debt collectors. This law states that debt collectors aren’t allowed to lie to you, mistreat you or misrepresent any action that they can’t legally take – in the attempt to collect the debt. Both the FCRA and the FDCPA are governed by the Federal Trade Commission and violations by creditors (FCRA) and debt collectors (FDCPA) carry hefty fines.
14. Fix Credit Report Errors
If you’ve pulled your credit history with any of three major reporting agencies, then you should study it for any possible errors. Creditors don’t knowingly report false information (see the FCRA above), but sometimes errors slip by them when they transmit your history to the agencies. Read through your tradelines and highlight any errors. Write a dispute letter to the credit reporting agency (or do it online) and tell them in detail why you feel the information is inaccurate. They will seek to verify the debt with the original creditor, but will remedy the situation if they find in your favor.
15. Join Membership Clubs
Membership clubs like AAA and Sam’s Club, BJ’s and Costco can all save you money in the long run. For older consumers, AARP also offers nice discounts for goods and services. AAA works to provide you with a tow and gas if you’re ever stranded on the road. This is most helpful if you have a long commute to and from your place of employment. Membership isn’t expensive and it will pay for itself if you ever only need just one tow per year. Not only does AAA offer roadside assistance, but also a plethora of other discounts that include movie tickets, travel accommodations, and tax software (to name a few). BJ’s, Sam’s Club and Costco all provide discounts for shoppers who buy products in bulk. If you buy large quantities of household products or food items, consider spending the $40-50 per month to utilize these services. AARP also provides discounts to those people who are 50 years old and above. If you’re not of the age to receive the discount, maybe you know someone who is. Ask if you are able to take advantage of any coupons by tagging along on grocery shopping trips.
16. Pay Debts on-time and Avoid Late Fees
You have probably been late with your payments at some point in your life. As a result, you’ve seen that hefty $25-35 fee on your billing statement as the creditor’s way of saying, “Hey, don’t do that again!” It goes without saying, but paying your debts on time every month can go a long way toward reducing your overall debt. If you have already worked out a budget, then this should be easy for you. Avoid late fees and avoid giving your creditors free money because of your lack of responsibility in bill payment.
17. Get a Cash Back Credit Card
Obtaining a credit card that offers cash back rewards is like putting free money back into your pocket just for spending. It really is that easy! Some cards, like PayPal, offer you a certain percentage back based on the amount spent monthly. If you’re going to spend the money anyway, you may as well get something back for it.
18. Learn How to Spot Fake Money
It’s not every day that you may come across a counterfeit bill, but it does happen. ATMs may dispense them or you may get passed a fake fifty by your local convenience store. If you know what to look for as far as security features are concerned, you can stop getting passed fake cash right when it happens. When you spend bills higher than a twenty at any store, you often see the cashier marking it up with their counterfeit detector marker. Why not do the same thing when you receive any amount of cash regardless of the source? Unfortunately, once you’re in possession of counterfeit bills, there really isn’t much you can do to retrieve the face value of the bill. Your only recourse is to send the fake bill to the IRS and hope for the best, but it doesn’t usually work out in your favor.
19. Do Your Research
If you wish to make a larger purchase, do as much research as necessary into every cost associated with the purchase. You wouldn’t buy a car without knowing what you’re getting yourself into, so get the necessary knowledge to make an informed decision. On the flipside, if you’re buying something smaller like a microwave, you don’t need to spend hours on finding out which product is the best for your home. Larger purchases naturally require higher amounts of research, but low-cost items can be bought without putting much thought into it. Your time is valuable and shouldn’t be wasted on comparison shopping for a ten dollar toaster.
20. Learn How ATMs Work and the Fees They Charge
ATMs are easy to decipher; you slide your card in, enter your pin number and voila – money comes out. If you have a debit card, then your bank probably doesn’t charge you a fee. Make sure you know if you’re out and about and get charged a fee for using a different ATM and how much it is. If you don’t know, simply go through the process and the ATM will tell you how much the institution wants to charge you before you commit to using the machine.
21. Pay Insurance Costs by the Year
Save money in the long-term by paying car insurance premiums on a yearly basis. When you pay yearly, you receive a larger discount as opposed to paying by the month. Inquire with your insurance company to find out the savings for lump sum payments. You don’t have to be a genius with a paper clip and bubble gum like MacGyver to be the master of your financial domain. Possessing the tools listed above, you can thwart your financial obstacles and save money like a financial whiz – and you don’t even have to play one on TV.