Lots of people have more time than money nowadays. If you’re one — maybe you’re taking a staycation or you've freed up commuting hours by working from home — optimize that extra time by making smart financial moves that won’t cost a dime.
“If you have time but no money, it’s time to become the best version of yourself,” says Ryan J. Marshall, a financial adviser in Wyckoff, New Jersey. “What separates successful people from people who struggle financially is often how they spend the time they are given each day.”
Here are some ideas for freeing up cash.
Drawing up a household budget is step one, perhaps using the 50/30/20 method to divvy up needs, wants, and savings or debt repayment. But creating a budget should be about liberation, not deprivation — about finding money to spend on things you care about and cutting ruthlessly on things you don’t.
Recurring expenses are the black hole of regretful spending. Examine your credit and debit card statements to identify subscriptions and re-justify them. When a recurring expense makes the cut, try to get a better price — we’re looking at you, cable, internet and cellphone bills.
One big potential payoff? Comparing auto insurance premiums, either by yourself or with help.
“It can be a pretty painless process, by just forwarding your current insurance to a broker and having them shop it with multiple carriers,” says Autumn K. Campbell, a certified financial planner in Tulsa, Oklahoma. Some brokers work on commission only and don’t charge a fee.
Another way to free up money: Consider a “spending fast,” in which you spend nothing for number of days.
Plan debt payment
Develop a plan for paying down debt. Two popular strategies: Pay extra toward debt with the highest interest rate (debt avalanche) or pay extra toward the smallest debts to wipe them out quickly and get a sense of accomplishment (debt snowball).
Also consider refinancing your debt now, while interest rates are low, low, low. Look at your mortgage and student loan; transfer debt to a lower rate.
Money knowledge is the gift that keeps on giving.
Money advice online is abundant, but don’t forget about all those finance books at your public library. Beginners might like “Personal Finance for Dummies.”
And while not everyone enjoys the topic, you should have a basic understanding of investing.
“There are countless wonderful free resources, such as Morningstar’s free investment classroom and Vanguard’s free articles hosted on their website,” says Avani Ramnani, a financial adviser in New York City.
Monitor your credit
Your creditworthiness matters to your financial life far beyond qualifying for a new loan. People with better credit can live better on less money.
At minimum, learn about the main factors that affect your credit: payment history, credit utilization, credit history length and credit mix. Check your credit reports at AnnualCreditReport.com.
Check your credit scores (the numbers that summarize your credit reports, available many places online) and strategize on ways to improve them, if needed.
Reconsider the car you drive
What you drive plays a big role in your financial health. Think critically about the expense of your purchase and of the insurance and repairs.
New cars lose value like they drove off a cliff, while used ones can be bargains. That’s why you can buy a 2014 Mercedes-Benz E-Class sedan for the same price as a new Kia Forte. Shop smart and shop used.
Start a next-car account and plan to fund it. Make automatic payments into the account. In fact, put all your good money decisions on autopilot. That way, you won’t forget to pay bills or stash money away. And ultimately, you’ll have more time and money.