Simple tips to stretch your money…

You know what they say about a penny saved, right? Well, pennies don’t go very far these days, but we have some tips that can help save you real dollars. Take a read and see if you can do any of these to stretch your dollars!

Being Over-Insured
Having insurance is a good idea to protect you from catastrophic losses, however, many people try to avoid ANY potential loss they may confront, and they attempt to do so by over-insuring themselves. This may bring them comfort, but more than likely, it increases the cost more than the benefit to you, especially with all of the exclusions and exceptions to paying claims that some insurance companies take advantage of (and which are typically found in the small print section of the policies.)
Periodically review your policies to make sure that you are reasonably protected but are not paying more for this “comfort” than what it is really worth. Then, increase your insurance deductibles and/or cancel any unnecessary policies and take the money that you save from doing this and put it into a savings account at F&M Bank. In this manner, you are essentially “self-insuring” yourself, and at the same time, you can create a nice safety net or emergency fund that you will have on hand for other things that you may want or need.

Buying a brand-new car
Almost everybody likes the look and smell of a new car, but if you can control your emotions a bit, your wallet will really appreciate it. The facts are most new cars depreciate (i.e. lose value) as soon as you drive them off the dealer’s lot, many times amounting to 20% or more of the value, and they can continue this decline to the tune of 10% every year or so for the first five years according to Carfax. In addition to this, cars built these days are safer and more reliable than they used to be, so save yourself some real cash and buy a “slightly used” 2-3-year-old car to avoid a huge chunk of the depreciation hit.

Not maxing out your 401(k) or 403(b) plans
Many companies offer company-sponsored 401(k) or 403(b) plans as an extra benefit for their employees, and to encourage them to participate in the plan, they typically provide a company match to any funds that their employees invest up to a certain percentage. For example, company matches sometimes range from 3%-to-7% of the employees’ total contributions, so take advantage of this and maximize your 401(k) and 403(b) deposits to their full extent as determined by the IRS. (For example, for 2020, the IRS allows pre-tax employee contributions of $19,500, or $26,000 if you’re age 50 or older.)

Buying an extended warranty
Remember what we said above about being over-insured? This is another example of that, but even more unwise. Purchasing extended warranties that many companies push when you make a new purchase generate enormous returns for the companies that offer them, but are typically a total waste of money for consumers so avoid them at all costs.
Why? Most products these days come with mandated warranties and are made well enough to outlive any “extended term” that these extended warranties may offer, plus many credit cards provide this extended protection free of charge if you use their card for the purchase. To make matter worse, the fine print and exclusions for most extended warranties make it almost impossible to receive any kind of benefit from them, so stay away and save your money!

Simply put…
Letting any one of these money wasters drain your wallet means you’ll have that much less for the things you really want or need, so pay attention to the little details and treat yourself to a more secure future!

As always, F&M Bank is here to assist you with your banking needs, so call us if you have any questions!

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published on 11/3/2020