Saving Extra Cash: 5 Tips from Herb Kay

It is not surprising that, with the holiday shopping season looming immediately on the horizon, many people are wondering how they might be able to save a little money before the end of the year. I liked some tips sent via email by Herb Kay, who is known for the SOS System. Here are some of my paraphrasings of the tips, along with some of my thoughts and quotes from the email:

1. Change your withholding at work: This is a short-term way to get a little extra cash in your paycheck. Here is what Kay points out: “According to the IRS, the average refund last year was $2,800, which means too many people are over-withholding to their own detriment. If you change your exemption status for the holiday months of November and December, you will have extra money in each paycheck for the next two months.” You won’t have as large a refund come April, but you’ll have more now — that you can put to work for you.
2. Defer student loan payments: You can actually defer your loan payments if you are experiencing some sort of hardship. Here is what Kay says about what you can do if deferring payments is not an option: “If your situation is not suited to a loan deferment, contact your lender as soon as possible. With your account manager, evaluate available loan repayment options that may be a better fit such as loan forbearance or loan consolidation. No matter what, you can certainly reassess your payment situation right now and get the money you need to help you with your holiday wish list.” Just remember that interest will still be accruing.
3. Consider cash back incentives: If you are making a large purchase this month or next month, and you have room on a cash back rewards credit card, use that. They pay it off before interest starts being charged. You will get your reward bonus by December, and it can be a nice boost.
4. Cash in rewards: If you have rewards on your card, now might be a good time to cash them in, for actual cash, or even for merchandise or gift cards that you can give as gifts.
5. Defer the mortgage payment: You can also defer your mortgage payment. Some lenders let you take a “vacation” from one mortgage payment during the holidays. However, you may have to pay a fee, and the interest is always there and always accruing.

I don’t agree with deferring loans, but I do think that it is a good idea to check your tax withholding, and if you pay off your credit cards each month those strategies could work.

How are you getting extra cash for the holidays?

Image source: Steve Wampler via Flickr