23 ways to keep more of what you earn

by Marty Kramer   In one regard, a penny saved is even better than a penny earned. How’s that? Earn money and you pay income tax on it–as much as 35%. But Uncle Sam has no dibs on the money you save.

Here, then, are 23 ways to keep more of what you earn.

Ask for a better deal

Ever notice that when you call to cancel your cell phone or long-distance service, the company is suddenly eager to tell you about another plan that will save you piles of money? With these and some other types of services, there are far too many plans that change too frequently to keep tabs on. And the companies are not likely to seek you out to point out possible savings. So, at least once a year and whenever you change usage patterns, call and ask if your provider offers a cheaper plan for you.

Share the burden

You may be able to team up with another agent, business professional, or company to share expenses on office space, business equipment, assistants’ salaries, office supplies, and other expenses.

Let someone else buy the most expensive part

What’s better than that new-car smell? The smell of an almost-new car that costs thousands of dollars less. According to an article from Bankrate.com, a new 2002 Ford Taurus cost $19,035. The wholesale value for the same model car with 100 miles on it was $15,390. You can also save big when buying used office furniture and, if you’re knowledgeable about what you’re getting, computer equipment and other electronics.

Stick to your plan (or switch)

Make sure you’re staying within your allotted minutes on your cell phone plan. If you go over more often than "almost never," switch to a plan with more included minutes. Also when switching to a new plan with the same carrier, make sure that contract terms like the definition of peak times aren’t being changed on you. When switching plans with the same or a new carrier, ask if the company will grant you a 30-day trial before locking in the new plan for a year or more.

Negotiate everything

You negotiate on behalf of your clients all the time, but do you do the same for yourself? Many items that seem to carry fixed prices may be negotiable–the key is to deal with someone with the authority to negotiate, like a manager or business owner. Ask for quantity discounts, markdowns on floor models, money off when purchasing several items as a package, and frequent-customer discounts. It never hurts to inquire about upcoming discounts or specials that you can take advantage of early.

Also, if something is delivered that doesn’t measure up to standards, request a discount if you can still use the item or a refund or full credit if you can’t.

Consolidate technology

Do you still really need a cell phone and pager? Replace two items with one–especially when recurring charges are involved–and the savings can add up quickly.

Put your credit card to work

There are cash-rebate cards, airline-miles cards, shopping-rewards cards, even cards that rebate a percentage of your purchases to deposit into a college savings account. If you are disciplined enough to pay off your balance each month, use your credit cards for all your purchases and rack up the points, cash, and prizes.

Ditch your credit-card debt

If you have credit-card debt, ask the company to lower your current interest rate. If they won’t, investigate transferring your balance to a card with a lower rate. Then, pay off your credit-card debt as soon as possible and vow to never carry a balance again. If you can’t keep that promise, get out the scissors. Interest rates for most credit cards are higher than many other types of debt.

Raise your insurance deductibles

For these savings, you must also consider your risk tolerance and other factors. But if you can handle a larger deductible, your insurance premiums go down. Many insurers also offer discounts to customers who buy more than one type of insurance with the company.

Subtract activities that add up

Getting cash from ATMs not in your bank’s network only costs a buck or two. No big deal. Until you realize that visiting the money machine a couple times a week over a year costs the same as six months of broadband Internet access, which you’ve been wanting but say is too expensive. You can go to the ATM less frequently, but even better, find a bank that does not charge for ATM withdrawals. Some banks rebate charges from other banks’ machines.

Other small charges that add up: your daily designer coffee, calls to directory assistance, calls to fee-based tech help for simple fixes you can find in online FAQs, premium gasoline in cars that don’t require it, frequent purchases of single copies of magazines or newspapers instead of a subscription.

Shop for a better bank

Speaking of banks that don’t charge for ATM withdrawals, banks vary widely on how much they charge for various services and account maintenance. You may be able to save some money depending on what types of accounts and services you need and the balances you intend to carry in each account.

Look for discounts on services you already use

Do you ever ship overnight letters and packages via UPS? If so and you don’t take advantage of the discount offered to Texas REALTORS® through TAR, you’re throwing away money. In fact, multiply the number of overnight letters you send by $1.50 to figure out how much you would save.

There are scores of discount programs offered by the Texas Association of REALTORS®, National Association of REALTORS®, and local REALTOR® associations. Other groups you belong to may also offer discount programs. Find out what they are and use the ones that make sense for you.

Get broadband

Okay, broadband actually costs more than dial-up service. But if you often find yourself tapping your fingers while waiting for Web pages to appear and downloads to finish, you’re wasting valuable time that could be put toward more productive, profitable activities.

Switch off the autopilot

It pays to look closely at prices. How much do you pay to renew your Web domain names? A few years ago, this service cost $35 per domain per year. Some companies still charge that amount. Others renew domain names for less than $10 per year.

When is the last time you looked at the price of gas at the station you always frequent? If the station across the street charges three cents less per gallon and you purchase 15 gallons a week, that’s $23 a year. Not exactly enough to retire on, but maybe worth crossing the street.

Figure it out

You create property fliers, direct-mail pieces, and other printed materials yourself on your inkjet printer, so you’re definitely saving money, right? Are you sure? Do you know how much you pay for paper and ink cartridges for a specific quantity of printed pieces? Have you ever compared this amount to having these items produced at a printer or copy shop? And if you’re spending a considerable amount of your time producing these items when you could be doing more profitable activities, factor that into your decision as well.

Knowing how much something really costs is the only way to compare it with other options.

Try before you buy

Cars aren’t the only items you should test before you plunk down your hard-earned money. Buying a new office chair? Sit in it for more than two minutes to see if it’s truly comfortable. Thinking of upgrading to a better digital camera? See if you can borrow or rent one first to make sure it won’t just sit in a drawer.

Think like a consumer–you are one

The same tactics that apply to you as a consumer also work in your business life. Coupons, frequent-customer programs, buying in quantity, and wholesale clubs can offer significant savings. If you haven’t checked out wholesale clubs in awhile, they offer more than grocery items. You can purchase office furniture, computer equipment, office supplies, even gas for your auto. Of course, just because an item is at the wholesale club doesn’t automatically make it cheaper than other places. You still have to check.

Don’t buy extended warranties

Consumers Union, the publisher of Consumer Reports, claims that fewer than 20% of warranties are ever used. A Consumer Reports survey showed that readers who purchased extended warranties paid a similar amount for the warranties as the average cost to repair the item. Consumers Union does say, though, that extended warranties may be worthwhile for high-tech products that you use extensively, like home computers.

Consider all costs

When comparing two items, purchase price is only one of several costs you should mull over. In the long run, a $50 printer is no bargain if the ink cartridges cost twice as much as the ones used in the $100 model. A car with a more expensive purchase price might actually cost less over its life if insurance, maintenance, depreciation, and other costs are less than a car with a lower sticker price. You can find a true-cost comparison for new cars at Edmunds.com.

Protect your computer equipment

How much money would you be out if your computer were fried by a lightning strike, power outage, or surge? How much time would you lose if your data were wiped out? How many clients would you lose if your machine contracted a virus and sent it out to everyone in your address book? Investments in surge protectors, an uninterrupted power supply, a data backup system, firewall, and antivirus protection can save you plenty of time, headaches, and money.

Take all legal tax deductions

Not giving the proper attention to your tax situation can cost you big–either in penalties or lost opportunities for deductions. If you are not knowledgeable about current tax laws, hiring a professional can more than make up for the cost of fees you will pay.

Get the best postal rates

Guessing at postage is a fool’s game. Estimate too high and it’s like paying a quarter for a dime; guess too low and your letter or package ends up back where it started.

You can maximize postage savings when creating direct-mail campaigns by checking with the post office before you design and print. The post office and professional mail houses may also be able to help you save money by taking advantage of sorting and other mailing discounts.

Use e-mail

Is there any marketing that you can shift from postal mail to e-mail? Are there documents you can send electronically rather than in an overnight package? E-mail is an inexpensive way to communicate; just make sure not to use it for confidential or urgent communications.

Photo © PhotoDisc.

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