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For most people buying life insurance is a "set and forget" type transaction, but monitoring your policy, making sure you have credit cards that work for you and taking advantage of those "extra" paychecks could help give your family a $3,000 raise.
Refinancing (or replacing) your life insurance
You can always modify your life insurance.
"It's always worth looking at your life insurance every couple of years because a lot of times your agents will have different prices," says Michael Katsanevas, president of Kapital Strategies.
In 2007, the Insurance Information Institute wrote that term insurance rates have dropped about 4 percent every year since 2000. Katsanevas says mortality rates are down, and so, insurance rates are down. But, no two policies will be the same, so don't accept an advertised price as set in stone. [CLICK HERE to compare mortality rates from 1980 and 2001]
"Remember, you always have to do the medical underwriting, and that's going to determine the final price," Katsanevas adds.
He says he was able to able to save a Bountiful couple nearly $480 a year by changing the policy.
Don't fear the plastic
You can make money off the banking system, but it requires you using a tool many people are afraid to use: a credit card.
"I get 5 percent for some items like gasoline. I get 5 percent when I eat out at a restaurant, 3 percent if it's fast food," says Salt Lake Community College Adjunct Professor Mike Perry.
He says as long as you pay off your monthly statement in full, you won't pay them any interest. Plus, you can earn more interest if you keep your money in a money market mutual fund than in a regular checking account.
"Historically, these accounts have been averaging 5 percent annually in interest," says Perry. Although, he says they're not at that interest rate right now, they will be again.
But, one of the most effective tools in your money saving arsenal is recognizing how often you get paid.
The 26 paycheck budget
You know when you have a little extra money in the bank, and you don't know why? Well, it's usually not because you spent less that month. It is because you earned more.
"Let's say that you got paid every other Friday and your first paycheck was the first Friday in January," says University Of Utah Business Adjunct Professor Jerry Basford. "In January and July, you'd get three paychecks."If you take the average salary, and according to the Division of Workforce Services that's $39,300 a year in Utah, people who get paid twice a month get 24 paychecks of just under $1,400 after taxes.
People who are paid every other week are used to 26 smaller checks, worth $1,284. Those people normally get two checks every month to pay their bills, but two months out of the year, they get a third.
Basford says this money can be set aside to pay off your debt. "Then the rest that normally you'd have as extra, you set that aside."
If you don't get paid every other week, you can figure out what your smaller paycheck would be by dividing your salary by 26, and set the difference from your regular paycheck aside.
So, totaling the $2,560 you save from this and adding the $650 I told you about on Thursday, you've set aside $3,210.
E-mail: pnelson@ksl.com
