Snag deals and reroute extra funds to reduce your overall expenses during the COVID-19 outbreak.
Cooking at home and walking frequently can improve your well-being – and give your finances a boost. (GETTY IMAGES)
The COVID-19 PANDEMIC has brought a lifestyle change that’s quickly impacting budgets and plans. If you’re retired, the market dips and economic uncertainties might cause anxiety as you look over your finances. But there are also ways to improve your retirement finances if you implement some cost cutting strategies.
Here are some simple ways to save money during the coronavirus outbreak:
- Skip required minimum distributions.
- Stash unused entertainment funds.
- Sell items you don’t need.
- Seize discounted travel fares.
- Check automatic payments.
- Contact your car insurance provider.
- Transfer credit card balances.
- Focus on your health.
- Search for rewards cards.
- Take advantage of senior discounts.
Skip Required Minimum Distributions
You generally need to take required minimum distributions from qualified retirement plans such as a traditional individual retirement account after age 72. The CARES Act suspends the minimum distribution requirement in 2020. “For those who do not need the RMD funds to live on, this is a great opportunity to leave it in the account and provide more time to recover,” says Thomas O’Connor, a senior wealth advisor at Keel Point in Huntsville, Alabama. Skipping all or part of your retirement account distributions in 2020 could also reduce your tax bill, because traditional retirement account withdrawals are usually taxed as ordinary income.
Stash Unused Entertainment Funds
Fewer outings to theaters or concert halls could mean you have some extra cash in your normal monthly budget. Rather than making extra online purchases or a few impulse buys, consider putting the funds aside until later. “If you don’t need the money to cover your essential expenses, sock that money away in a money market account that has no fees,” says Pam Krueger, founder of Wealthramp, which connects consumers to fiduciary, fee-only financial advisors, in Belvedere Tiburon, California.
Sell Items You Don’t Need
If you are using the additional hours at home to sort through clutter, you may find items you haven’t used in years. If you have furniture or exercise equipment that is in good condition, try putting the goods up for sale online. Sites like Facebook Marketplace, OfferUp and Craigslist make it easy to list the items. With many consumers using their downtime to shop online, you may be able to sell items quickly. Buyers can pick up items from a safe distance, such as your driveway or front porch.
Seize Discounted Travel Fares
If you have a budget that includes some travel every year, you might find extra funds if trips were canceled or postponed. “If you are still planning to travel later in the year, this could be a great time to capitalize on some deals,” O’Connor says. Many lodging places are offering steep discounts with favorable cancellation policies. You might also find bargain prices if you want airline tickets for later this year.
Check Automatic Payments
Pull out your credit card or debit card statements from the last few months and go over each item. If you have some bills set to be paid automatically each month, evaluate the item or service and the price attached to it. “In working with dozens of older adults, many of whom set up auto-pay, we usually find hundreds of dollars for them by just reviewing the past few credit card statements,” says Kay Bransford, a daily money manager at MemoryBanc, an agency that helps older adults manage their bills, in Arlington, Virginia. “Often we find subscription services they don’t recognize or remember signing up for.” For instance, if you have Wi-Fi in your home, but are still paying for dial up access, you can cancel the redundant service.
Contact Your Car Insurance Provider
If you are driving a vehicle less frequently or don’t use it anymore, look at what you’re paying for auto insurance. You might be able to ask for lower auto insurance premiums. Even if you still plan to use the vehicle, you may be eligible for a discount. “Many companies are offering discounts on current or previous policies,” says Jared Weitz, founder of United Capital Source in Great Neck, New York.
Transfer Credit Card Balances
If you’re carrying debt with a high interest rate, look for a credit card that offers a 0% interest rate for the next several months or year. Calculate if you will be able to pay down the debt during that timeframe, and if you can, consider transferring the debt to the new card to save on interest charges. For instance, say you have a balance of $2,400 on a credit card with an interest rate of 18% and move the amount to a credit card that offers 0% interest for the first 12 months. If you pay $200 each month for the next year, you’ll pay off the balance without any interest charges. However, check for balance transfer fees and other charges before making the switch.
Focus on Your Health
From cooking at home to taking frequent walks, there are numerous ways to improve your overall well-being. “This can have financial ramifications, as you can possibly avoid some of the common ailments associated with being inactive,” says Jeff Rose, CEO of Good Financial Cents in Nashville, Tennessee. Another way to stay healthy and save: start a garden. The planting and care required will increase your activity level, and the homegrown vegetables will lower your grocery bill.
Search for Rewards Cards
Many stores have memberships that allow for extra savings and rewards for loyalty. A store credit card, for instance, might offer 5% savings or cash back on every purchase. If you regularly purchase from a store online, the savings could add up over time. “Whatever your favorite store, it is worth asking them if they have any deals for frequent customers, especially during this time,” O’Connor says.
Take Advantage of Senior Discounts
Many local retailers and organizations are offering help for seniors during the coronavirus pandemic. You might be able to get your groceries delivered for free, which could reduce gas costs. There may also be discounts available or special shopping times at nearby stores for older adults. You could order meals from a restaurant and have them delivered for free. Check with the stores and eateries in your area to learn about discounts that could help you save even more.
Rachel Hartman, Contributor | US News