SIX EASY WAYS TO MAXIMIZE YOUR FINANCES
February 9, 2024
When the world around us feels increasingly out of control, our advice is to tune out the noise and focus on things you can control.
Drum up some extra cash, save for the future, and ensure your family’s financial security – below are six easy and actionable ways to maximize your finances.
1. Search for Unclaimed Property
Did you know you may have found money just waiting for you to claim it? Unclaimed property is an account or property with monetary value that has been abandoned or forgotten by its owner. Examples are old bank accounts, uncashed checks, security deposit refunds, insurance policies, and tax refunds (and many others too numerous to list here). According to the NAUPA¹, billions of dollars are unclaimed in the United States, with approximately one in seven people having unclaimed property or cash waiting for them.²
You can search for unclaimed property in your name by visiting the website of your state’s unclaimed property office. Make sure you search for every state you’ve lived in and every name you’ve used (for example, your maiden name or your last name from a previous marriage). You can also use a free service like Missing Money, which will search many states for you at once. If you find any property that’s rightly yours, follow the website’s instructions for making a claim. You may be pleasantly surprised by how much money you can recover!
2. Budget for Big Sales
If you love shopping during Black Friday and Cyber Monday sales each year or have a favorite store offering fantastic deals at certain times, save for those upcoming sale events now. Each month or pay period, set aside a pre-determined amount into your high-yield savings account.³ Before you know it, you’ll have built up a nice stash of cash for splurging on the items you want to buy later without breaking the bank.
Some popular annual sales events include Nordstrom’s “Half-Yearly” and “Anniversary” sales, Macy’s “One-Day” and “Friends and Family” sales, and Amazon’s “Prime Day” and “Prime Big Deal Days” sales. These retailers advertise their annual sale dates several months in advance; if you start setting money aside now, you’ll have saved enough for the big event within a few months.
Not much of a shopper? Consider using the same strategy to upgrade your next vacation. Flying business class or upgrading your hotel package will elevate your travel experience, and it’ll be easier on your wallet when you’ve set aside the extra cash beforehand.
3. Cancel Unnecessary Subscriptions
Leaky cash flow is money wasted on unused, unwanted, duplicate, or forgotten subscriptions you’re unknowingly paying for. Streaming services, magazine subscriptions, gym memberships, online courses, and beauty box subscriptions often fall into this category of spending.
Plug your leaks by canceling recurring subscriptions you’re not using or can get for free or at a lower cost elsewhere. Start by reviewing the last 12 months’ bank and credit card statements and making a list of providers to contact. Or, if that sounds tedious, you can instead use an app that does the work for you by scanning your bill-pay accounts, finding your recurring payments, and helping you to cancel or negotiate the underlying subscriptions.⁴
4. Increase Your Retirement Contributions
If you’re still working and want to increase your retirement savings while taking advantage of potential tax benefits, make sure you’ve adjusted your retirement contributions for 2024’s higher limits. This year’s maximum contribution amount for 401(k), 403(b), and most 457 plans is $23,000 for employees under age 50 and $30,500 for employees aged 50 and older. IRA and Roth IRA maximum contribution limits for 2024 have also increased to $7,000 for workers under age 50 and $8,000 for workers aged 50 and older.⁵
Even if you can’t afford to contribute the maximum this year, making a slight increase now to your automated savings will help grow your balances over time (your future self will thank you for the small sacrifice today!). Ensure your payroll deductions are adjusted to reflect the higher contribution amounts to employer-sponsored retirement plans. Also, update the dollar amounts of scheduled ACH transfers from your bank account into your IRA or Roth IRA.
5. Check Your Credit Report and Freeze Your Credit
One of the best ways to protect your finances and identity is to check your credit report for fraudulent activity. Your credit report is a record of your credit history. It includes your personal information, loan and credit card accounts, payments, inquiries, and employer history. Your credit report and resulting score can affect your ability to obtain loans, credit cards, insurance, and even a new job. Ensuring that you do not have fraudulent activity tied to your credit report is vital for maintaining your creditworthiness.
Federal law allows you to check your credit report free of charge once every 12 months with each of the three major credit reporting bureaus: Experian, Equifax, and TransUnion. Even better, these three credit bureaus now allow consumers access to weekly credit reports free of charge.⁶ You should access your free credit report exclusively at Annual Credit Report, which is the only website authorized by the Federal government to provide free credit reports (other sites will charge you, or worse – they could be set up fraudulently by scammers out to steal your personal information).
Something to note: Gaining access to your free credit reports will not automatically give you your credit score – it will only allow you to check your credit report to find any errors or signs of fraud, and if found, report and dispute them with the credit bureaus. If you want to know your credit score, you can often access it for free via your bank, credit card issuer, or an online service such as Credit Karma.
In addition to periodically checking your credit reports, you should consider implementing a credit “freeze” with each of the three credit bureaus. Freezing your credit means that no one can access your credit report or open new accounts in your name without your permission. You may freeze your credit at no charge by contacting each of the three credit bureaus and providing information to confirm your identity.⁷ After your credit is frozen, you will also be able to unfreeze your credit (either temporarily or permanently) if you need to apply for credit or verify your identity.
6. Update Your Beneficiaries
One of the most important things you can do for your family’s financial security and peace of mind is to make sure your bank accounts, retirement accounts, and brokerage accounts have up-to-date beneficiaries named on them. A beneficiary is a person or entity who will inherit your money or property if you pass away. Naming beneficiaries of your assets now will help your heirs to avoid probate later, streamlining the passing of assets from your estate to your intended heirs upon your death.⁸
You can name new beneficiaries on accounts (or update existing ones) by contacting your bank, brokerage firm, insurance company, or retirement plan provider and filling out a beneficiary designation form (which you can often complete online). You can also name beneficiaries for your tangible assets, such as your car, home, collectibles, and personal belongings, by creating a will or a trust.⁹
¹ National Association of Unclaimed Property Administrators
² https://unclaimed.org/what-is-unclaimed-property/
³ Go to Bankrate.com to find the latest high-yield savings rates. Not sure what a high-yield savings account is or what to look for when opening one? Ask us!
⁴ Some apps that can help you with this task include Rocket Money, Trim, and Simplifi.
⁵ https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000
⁶ This program, which allows free weekly access to credit reports, began in 2020 due to the COVID-19 pandemic and was made permanent in 2023.
⁷ To freeze or unfreeze your credit with the three major credit bureaus, visit their sites:
Experian
Equifax
TransUnion
⁸ Probate is a legal process that is both costly and time-consuming for heirs to your estate. It can also be emotionally draining, especially if family members have a dispute or are infighting. Probate becomes involved when the court steps in to determine who to give your assets to after your death, rather than you getting to determine that yourself while you’re still alive. More on this topic is coming soon in an upcoming Lucidity blog post. Until then, the short lesson is to avoid probate whenever possible.
⁹ More on the topic of Wills and Trusts is coming soon. Follow us for updates!
This commentary is only general information and should not be construed as investment, tax, or legal advice. You should consult your own investment, tax, and legal advisors before engaging in any transaction. Past performance of any market results is no assurance of future performance. The information presented within has been obtained from sources believed to be reliable but is not guaranteed.
Do you have questions about applying these ideas to your unique situation or about anything else related to money, investments, or financial education? We are happy to help get you on track! Contact us for a complimentary, no-obligation conversation.