Money-saving stories are a dime-a-dozen. Everyone has read the
articles full of obvious, clichéd ways to save money: "Bring lunch
from home!" or "Make your own coffee instead of buying that
Many see the common anecdotes of advice and shrug them off
because, well, sometimes it's nice to go out for lunch and
sometimes a Cinnamon Dolce Latte trumps Maxwell House brewed at
That said, here are some easy ways to save money - significant
money in some cases - that even though anyone can do them, many are
frequently ignored. Here are four ways to save money right now or
in the future:
1. Mortgages Should be Refinanced
Mortgage rates are at an all-time-low. Although credit standards
are higher than they were a few years ago, there is a lot of money
out there waiting to be lent. It is surprising how flexible some
banks can be. At the same time, credit unions can be a prime source
of loans for those with decent, but, not perfect credit.
Those with lousy credit probably won't get a new mortgage, but
for those with decent-to-good credit scores, it's worth taking a
The other major barrier to refinancing mortgages has been low
appraisals. A low appraisal means a low loan-to-value ration. In
many cases that can stop a loan dead.
President Barack Obama actually came to the rescue here as many
homeowners are eligible to refinance their loan through the
Homeowner Affordable Refinance Program (HARP). These loans do not
require an appraisal and they are relatively easy to qualify for if
the applicant is current and has a good payment record on the
The downside to a HARP loan, or to any refinance, is that it
adds time to the length of loan. If, however, interest rates can be
reduced from 6% (normal just a few years ago) to 3.75%, homeowners
can save hundreds of dollars a month. Put some of that savings into
making an extra payment a year, and the duration of the loan can be
2. Cable Companies No Longer Have a Monopoly on Premium
Nearly every person in America has some alternative to simply
calling their local cable provider and signing up at whatever price
they offer. Services like HULU and Netflix (NASDAQ:
) - which a mildly tech-savvy person can easily watch on their
regular TV using a ROKU player or a similar device - have created
compelling alternatives to standard cable packages.
If giving up cable isn't practical, cable companies know about
alternatives. By simply calling up the company and threatening to
cancel, many subscribers can get their bills reduced. Not all
companies will make a deal, but many will offer you the same deal
new subscribers get (which can be a big savings) and some are
willing to throw in premiums like premium channels or DVR
To have the best chance of success, don't simply talk with the
normal customer service associate. Instead, ask for the person who
handles people who may cancel their subscriptions.
3. Consider Dumping PMI
Private Mortgage Insurance is forced upon homebuyers who lack
20% equity when they purchase a home. The insurance pays off the
mortgage if something happens to buyer and they can't repay. That
sounds great, but, PMI solely protects the bank holding the
mortgage. There is no benefit to the homeowner.
The trick with getting rid of PMI is that the homeowner has to
prove that she now holds at least 20% equity in the home and, then,
once she does, she must ask her bank to remove it. Technically, the
bank can say no, but most won't unless the payment history is
If the bank to is not asked to remove the PMI, it won't, no
matter how much equity is held. Countless people pay PMI through
the life of their loan adding what can be hundreds of dollars a
month in expenses.
The challenge, of course, comes in the appraisal. After the
recent mortgage scandals and housing market crash appraisers are
getting more cautious. Chances are, the appraisal, which is largely
based on comparable sales in your area, will come in lower than it
would have a few years ago. So, if it's close, it might be a waste
of money to get an appraisal. But, if with the equity is there,
getting rid of PMI is a no-brainer way to lower monthly
4 Self-Manage 401Ks
Too many people take no active role in managing their 401Ks.
If that's the case, there is money to be made in taking an
active role in how 401K funds are managed. First, employees should
contribute enough to fully receive any matching funds the company
kicks in. After that, make sure to contribute the maximum amount
allowed if it can be afforded.
Once that is done, work with a financial planner (companies
frequently provide access to them) and make sure money is being
allocated properly. A 25-year old with no kids will have different
needs and goals than someone who is 45-years old with a kid in
college. Make sure the money is working for you as hard as it
possibly can be and the rewards will be reaped when it is time to
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
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