All over America, times are tough, and finances are tight. Of course, my family could cut back our expenses and save a little more. But before that, I am looking for easy savings and am finding some hidden money that will add to our bottom line.
File robust insurance claims
I live in a Superstorm Sandy federal disaster area. For those impacted by a disaster, one of the easiest ways to recoup losses is to file an insurance claim. Unfortunately, most flood insurance policies exclude contents. However, there are a couple of ways to get a successful claim from homeowners insurance. Almost everyone who lost power can file a claim with their homeowners or renters insurance for a food spoilage loss. Most insurances will reimburse without requiring receipts, $250-500 of losses, less a small deductible. Although I did not get reimbursement for my evacuation hotel stay, my insurance agent explained that homeowners who had fallen trees (not submerged substations) that caused a localized power outage can get reimbursed. FEMA will pay for hotel stays (albeit at modest accommodations) to families who cannot return to their homes because it is uninhabitable. Generally, catastrophic claims do not negatively impact the insured's rating.
Talk to a financial advisor
Since I do not keep my securities licenses active, I can only note the current, historically low long-term capital gains and dividend income tax rates, which increase significantly in 2013. In fact, taxpayers in the bottom two brackets (under $70,700 for married couples) currently pay 0% on long term capital gains. A qualified tax or financial advisor can help save some money before investors come face to face with the fiscal cliff.
Lower health insurance costs
Health care costs are now 20% of income for the average American and rising at five times the rate of income growth. This year, my health insurance premium increased nearly 20%. However, by opting for a High Deductible Health Plan (HDHP) with HSA, which has the same network and benefits, I expect to realize savings of 15-20% over my former PPO or HMO health insurance plan.
Reduce income tax refund
I hate income tax refunds. I would much rather keep more of my money than give extra to the IRS. I plan to review and reduce the income tax withholding to make sure I withhold just enough to meet my tax bill, and not generate an income tax refund. This would mean extra money for the holiday season and post-Sandy repairs.
Appeal property taxes
Property tax appeal season in our county has started and runs through March. The key to reducing property taxes is arguing that the market value of the home is lower than that implied by the municipal taxation authority. Although the detrimental effects of Hurricane Sandy will not be reflected in 2013 appeals (home sales need to be prior to October 1 in our county), good comparative analysis, or a home appraisal can help to lower property taxes.
Although it is probably difficult to refinance a home that has been ravaged by a natural disaster, people like me can consider refinancing their mortgages. There are many online calculators for comparing the various types of mortgages (ARM vs. 30 year fixed or 15 year fixed ) and figuring out projected savings after factoring in closing costs.
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More from this contributor:First Person: The Disaster Resistant House