Before you can start hunting for extra money, you need to get real about your debt and answer this question: How much debt do you really have? Many people don't know—and even if they do know, often times their spouses don't. So if you haven't done Step 1 of Oprah's Debt Diet, go there now!
Okay, so let's say you're on the program, you've cut out the fast food and lattes, you have a monthly spending plan, and you're looking to save even more. Here's one great way: Every time a little extra money comes your way, earmark all or at least part of it for savings. This is one of the best ways you can give yourself a financial boost. Where is this extra money going to come from?
Here are a few ideas:
Your next raise. You've already been living on the money you're making now. Pretend you didn't even get a raise, and automatically bank the difference in your savings account.
If you haven't received a raise and feel you deserve one, it may be time to negotiate. Improving your earning power-increasing the size of your paycheck-involves fine-tuning skills that have less to do with math (or money) and more to do with negotiating (for money). If you're like many women, one of the things you "hate" most about money is asking for it. That has to change.
If you do not negotiate-if you do not ask for what you want-then the answer will always be no.
The first step is to gather information. When you are negotiating for anything, you have to think of yourself as a lawyer. You're Angie Harmon from Law & Order. You're Kinsey Millhone from Sue Grafton's novels. And that means before you say word one, before you form your hypothesis or make your case, you get the goods. If it's a salary you're negotiating for, then you've been online to see what similar jobs are offering, you're talking to headhunters to see what sort of offer you might expect, and you know how that compensation is structured in terms of wages, commissions, and bonuses if it isn't paid as straight salary.
Savers are, in general, happier people. They feel more secure because they not only have enough money to bail themselves out of a jam, but they are also doing something positive for their future. Financial advisers, unfortunately, often draw a random line in the sand and advocate saving 10 percent of whatever it is you make. Problem is, it's much too difficult for most people to start there, particularly if they're saving for the very first time. If the bar is set too high, set it lower. Try 3 percent. If that's easy enough, try 5 percent.
If you haven't already, track your spending and saving. Write down everything you spend money on for a solid month, using this spending tracker.
Tax refunds. Deposit refund checks straight into savings. It's found money.
Or, better yet, check with your payroll department to see if those refunds are coming because you're withholding more than you need to. If you are, withhold less and put the extra cash from each paycheck into savings so some of that money is earning interest all year.
The idea, of course, is to configure your withholding on your W-4 so that the amount that is withheld from your paycheck each month more or less matches your estimated tax liability. That way, come April 15 of the following year, you don't get a refund, but you also don't owe. A good way to run your numbers is by using the Withholding Calculator on the IRS website.
Even if you've been with the same employer for years, it's not too late to make a change, says Roni Deutch, author of The Tax Lady's Guide to Beating the IRS. "You can adjust your withholding any day of the year. But the longer you fail to adjust it, the longer you're going to be addicted to getting that refund check in April."
She's right, of course. You've come to count on that little windfall once a year, but wouldn't you rather have some extra each month to save for retirement, or pay down debt, or just make ends meet? So let's not put it off anymore. Tomorrow, when you go into work, go straight to your human resources manager (or your boss, if you work for a small company) and ask that he or she help you adjust your withholding. Then, stay on top of it, because many of life's milestones call for another look at your W-4, including marriage, divorce, a second job, birth of a child, the purchase of a home, capital gains and retirement.
Paid-off credit cards or other loans. Your car is paid off? Fantastic! The $359 (or whatever) you were paying to the car lender should go straight into savings. A few transactions like this and your savings balance will soar!
Take money out of your savings or money market account to pay off high-rate credit card debt. This makes sense as you're likely only earning 3 or 4 percent (max) on your savings, while you're paying 16, 18, even 24 percent on your credit card. By eliminating the debt, you gain an instantaneous 12 or 14 or 20 percent. Why? Because you're no longer spending the money on interest.