I was reading an article this morning on MSNMoney.com about a great idea that a lot of people could make use of. The idea is this; most people have some issues related to their finances, retirement accounts, banking or some other money related issue that they have been procrastinating dealing with. For some, it may be closing an old bank account, or rolling over an old 401k account. They know they should deal with the issue, but they just keep putting it off for lack of time. The idea that MSNMoney, and blogger J.D. Roth at Get Rich Slowly are promoting is taking a “personal money day”.
I have to say that the idea sounds like a great one to me, one that can potentially help you to greatly improve your financial situation. Writer Liz Weston talks about the idea:
Think about it: Most of us have way too much to do and too little time to do it, so difficult or mundane tasks often fall to the bottom of our task lists. Because financial chores can be both difficult and mundane, it's easy to put them off indefinitely, even though doing so can cost us.
Wouldn't it be nice to stop telling yourself you'll fix your financial problems when you “have the time” and actually get it done?
You could continue trying to work such tasks into a regular day or use the 24/7 availability of many online resources to do it on a weekend. But Roth argued for taking vacation time from work and devoting an entire weekday to the task. Not only are you more likely to have access to all the resources you need, but using up a day of paid leave time helps up the ante — you'll want to make sure the day pays off for you.
Where To Start
At this point you might be thinking, “this sounds like a good idea, but where do I start?”.
The reason I finally took a personal finance day was because I was forced into it because i had a car accident. After the accident my car was in the shop to get fixed, and I was stuck at home for the day. I realized that I may as well take advantage of the time off and see what I could do to save some money since I was going to be paying for a pricey car repair.
Auto And Homeowner's Insurance
I started with my car related expenses. The first thing I looked at was my auto insurance. To my horror I found that I was paying over $1000 a year more to insure our two cars at our current company than what I could pay for the same coverage elsewhere. I promptly switched to a new insurance company.
I also realized that we were overpaying for our homeowner's insurance, switching that coverage netted us another $200.
Next I closed my old bank account, and switched to a new bank that didn't have as many fees attached to their accounts. I estimate I'm saving between $100-$150/year on bank charges alone. Also, while I as at it, I found a high-yield savings account that had an interest rate quite a bit higher than our current low interest money market account, effectively earning us another $500-600 dollars a year in interest.
So for my personal finance day I ended up saving in excess of $1300 a year, while at the same time increasing our earned interest by another $500-600. So an extra $1800-1900 in our pockets for the year. Not too bad for a personal money day!
So what are some things that you can look into on your personal money day? Some of the high points from the articles include:
- Set up a high-rate savings account: Check out the best savings rates through our best bank rates page.
- Start tracking your spending: Use a software like Mint.com or You Need A Budget to track all of your daily/weekly/monthly expenses. You'll easily find areas where you can cut out the fat.
- Get a better interest rate on your credit cards: If you're like me you get a ton of credit card offers in the mail. Find one that better suits your needs, and that even has a cash back or other rewards program. Depending how much you spend, you could save a lot of money.
- Re-balance your 401(k), or rollover old 401k accounts: As time changes so do your needs for your 401k. Contact your financial advisor to see if you need to rebalance your allocations, or rollover old 401k accounts.
- Look at your insurance rates, and deductibles: Think about raising your deductibles, or switching companies if you can find lower rates.
- Get a personal finance book from the library: Find a good finance book, and soak up the good information!
- Call around for a better deal: Research deals for services you use, and call the companies asking for a better rate.
- Cancel services you don't need: If you're not watching much of your satellite TV – cancel it!
These are just a few of the things you can do. It may be a pain, and you might not enjoy taking a personal day to do it, but in the end you'll be glad you did. It can end up saving you thousands of dollars, and helping your bottom line.
Have you taken a personal day to fix your finances? Tell us about it in the comments.