We’re all guilty of leaving money on the table. The question is – are you aware of it?

As a Financial Planner, I’m faced with a myriad of money situations on a daily basis. The ones that typically stand out to me are when clients are leaving money on the table and don’t always realize it. Whether you’re married or living the single life, read on for 4 ways that I’ve noticed you could be shelling out extra or losing out on funds:

  • Company Benefits. This one is a biggie. Open enrollment is on the horizon for 2013 and you should know how to maximize your company benefits. To start – does your employer offer a 401(k) match? If they do, take advantage! They are giving you money. This will require you to contribute a certain amount of your base pay up to a pre-set limit and the company will match your contribution with funds of their own (i.e. your employer will match 50% of your personal contribution to your 401(k) up to 6% of your salary). This is an added perk that comes along with your salary and can help to put some extra dollars towards your retirement. What about a Flexible Spending Account? For 2013 you can make pre-tax contributions of $2,500 per employee to a Health FSA that is established to pay for qualified medical expenses during that year. This is a way to shelter some income from taxes and pay for upcoming medical expenses.
  • Not paying off high interest debts first. While there are many ways to pay down your debt, and in some cases the emotional impact of having certain balances off your plate can feel way better than pocketing extra money, it typically makes sense to pay down the debt that is costing you the most first. This tends to be the balances with the highest interest rates. Many people like to throw extra funds towards every liability each month to feel like they are chipping away at the balances at a faster pace. While this is a great strategy, an even better one would be to allocate all of your extra funds towards the highest rate balance in order to minimize the amount of interest you’re paying. Once that balance is paid off, then you can move the extra funds to the next highest rate balance and so on. This will save you money in the long run and get you out of debt sooner.
  • Not bundling insurance coverage. Do you have homeowner’s coverage through one provider and car insurance through another? This could be costing you. By bundling your insurance coverage under one provider you’ll likely qualify for a multi-policy discount, saving you money on premiums. Additionally, by building an emergency fund to cover deductibles for insurance policies, you can increase your deductible and save additional funds on your policy each year. Make sure to review your coverage annually and shop around to ensure you’re receiving the most competitive rates.
  • Not having a plan for purchases. Impulse purchases are the ones that can cost the most. Since they’re not planned for, they get charged to credit cards or funds are pulled out of a savings account that is earmarked for a different goal. Ultimately, interest ends up being paid, or one goal is being put off in lieu of a new item. I may be biased in that my job is literally based on having a plan – but by setting a goal for a big purchase, trip or other large expenditure and then laying a framework to work towards it during each pay period (whilst staying in line with your budget and other priorities), you’ll likely get much more satisfaction out of the purchase, save yourself money that would have gone towards interest payments and keep yourself on track with your overall financial plan. 

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