2 Bonuses to Your Housing Budget

Greatly Reduce Your Homeowner’s Insurance Premium

Talk to homeowners and most will tell you they have never had a claim against their homeowner’s insurance.  So, their deductible remains low and their premium stays high.

We were in this group until one day we started talking about reducing our housing expenses.  We asked ourselves how much we could afford to pay should we have a claim.  The amount was higher than our homeowner’s deductible.  We called our insurance agent for a quote with a new, higher deductible.  WOW!  It was a big savings!  we sharpened the pencil and began shopping for insurance with a sizable deductible.   We ended up reducing our insurance premium by nearly $500 a year ($1,300 down to $820).  And guess what?  We still haven’t had a claim.

Get Your Tax Refund in Every Pay Check

Did you get an income tax refund this year?  Last year?  Why not get your refund in every paycheck?  Here’s how:  Ask your tax preparer what your actual tax liability is and divide that by the number of your pay periods (52, 26, 12 etc.).  Ask your preparer for a new W4 form.  Then stroll into your Human Resources office and announce that you want them to ONLY withhold $X for Fed. Taxes and $Y for State Taxes (the amount of your actual tax liability per pay period).  A few employers will allow you to withhold a percentage for Fed. and another for State.  Most will struggle with how many exemptions you have to claim to achieve the dollar amount.  Fill our your W4 and happily hand it over to HR.  No matter how they end up doing it you will bring home much more of your check every payday!  For example, if you got a $2,600 tax refund and get paid every week you could take home $50 MORE EVERY WEEK or $215 MORE EVERY MONTH!  At the end of the year you break even – you won’t owe any additional taxes and YOU have had your refund left in your pocket every payday during the year.  Pretty cool!  (Be sure to coordinate this with your tax preparer).

Let’s see, what could you do with another, say, $255 CASH each month?

2 thoughts on “2 Bonuses to Your Housing Budget”

  1. Penuts

    Thanks Mike,
    I’m guessing we could also drop our auto insurance premium by doing the same deductible thing, right?

    I also like keeping my earned income in MY pocket. I know how to use my money better than the government does.

    Good post

  2. Penuts

    Hello Penuts,
    See my comments to Annie regarding lowering your auto insurance too.
    For your friends who don’t own a home yet once they have an accepted offer on the purchase of a home they can take those terms to their tax person. Then they can start their tax sheltering with the first house payment. This softens the leap from rent to house payment and makes it feel more affordable. Good comments, thanks.

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