Save Extra Cash for the Holidays with Insider Tips from Finance Expert Herb Kay
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Los Angeles, CA (October 20, 2009) – Looking to ho-ho-hold onto some extra cash this holiday season? Herb Kay, self-made millionaire, best-selling author, nationally recognized finance and business expert, and creator of Herb Kay’s S.O.S. System (www.HerbKaySOS.com), offers five tips for putting extra money into your financial stocking this season:
1. Stop Holding Out on Yourself. The biggest opportunity many consumers have to save this holiday season is to adjust their federal withholding status. According to the IRS, the average refund last year was $2,800, which means too many people are over-withholding to their own detriment. If you change your exemption status for the holiday months of November and December, you will have extra money in each paycheck for the next two months.
Instead of waiting for a big April refund, review your W-4 and amend your exemptions from 1 or 2 to a maximum of 9. You will not be taxed more by changing your exemptions back in January; your tax return will simply reflect a lower return percentage in April. This way, for the months leading up to Christmas, Hanukkah, etc., you can put cash in your pocket now and still have money when you receive your tax return.
2. Delay the Repay. Deferring student loans payments can create some extra holiday cash. There are numerous student loan deferment programs which allow you to delay or defer loan payments for a specified term for returning to school, unemployment or disability, a period of economic hardship and/or pregnancy. If you happen to work in a public service, armed forces, accounting or teaching field, many employers will opt to pay half, or even all of your loans, based on length of service and experience. You just need to ask.
If your situation is not suited to a loan deferment, contact your lender as soon as possible. With your account manager, evaluate available loan repayment options that may be a better fit such as loan forbearance or loan consolidation. No matter what, you can certainly reassess your payment situation right now and get the money you need to help you with your holiday wish list.
3. Send Yourself Money. If you are thinking about a large purchase in October or November, you should consider one with a cash-back incentive, such as a manufacturer rebate. A manufacturer rebate is like writing yourself a post-dated check, as opposed to the instant savings you “receive” from purchasing a cheaper product.
For example, if you’re looking to purchase a new dryer and your options are a dryer on sale for $500 (originally $700) or a comparable dryer at $600 with a $200 mail-in rebate, you should pay the extra $100 upfront and take the mail-in rebate. Both dryers save you $200, but the check you receive in the mail can be used as part of your holiday savings plan. The trick is to fill out the necessary paperwork in a timely manner to get the rebate. This means if you want to see a return by late December, pay attention to rules, deadlines and any other stipulations before you buy.
4. Cash in Your Rewards. If you have been using your credit card(s) a lot recently, then you should have accrued hundreds of dollars worth of store and credit card points throughout the year. While many of us might want to save these points for a rainy day, there’s no reason to if you’re struggling to buy presents for your family. Collect your rewards now, and not only can you reap heavy discounts for online purchases, because you’re beating the holiday rush, but gift cards and travel vouchers are often discounted as well. There are great deals to be had, all of which you can use for planning your holidays instead of your own cash. It’s your “money,” so use it!
5. Take a Vacation from Your Mortgage. Consider a little-known secret: Defer your mortgage, in some cases, penalty-free, for 30 days. This will depend on your lender and what their definition of “defer” is. Mortgage payments can be deferred for up to a month, and this “vacation” is often referred to as forbearance in the mortgage industry. Forbearance is an agreement between you and your lender to delay an impending default in order to help you through an economic hardship.
Forbearance is usually for temporary financial problems, so this is not meant to skip a payment and spend the money instead on holiday gifts. There are some loans with a broader scope of payment negotiation for strapped homeowners. Some lenders provide an option to “take a break” from paying interest for a limited period, either for free or a small fee. The term of your loan then increases by the length of your mortgage “vacation,” but the total interest you repay will increase as well. Keep in mind that this mortgage vacation is like taking on a “new loan” for an increased principal that adds the original loan and the interest that accumulates during the holidays.
Herb Kay’s S.O.S. System offers consumers a comprehensive and easy-to-follow approach to the most important areas affecting personal finance today: cash, career, credit and debt. The system contains four guides, an online membership program and a host of helpful extras. The kit’s elements are based on Kay’s 3-step process of Simplify, Organize, Save, through which Kay shares his knowledge, expertise, and compelling opinions, along with valuable tools, worksheets, templates, resources and examples that can benefit everyone. For additional information visit www.HerbKaySOS.com.
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