Money Management

How much money could you save? 

Whether you are a homeowner or a renter, you likely have lots of monthly housing costs to pay, like your mortgage loan or rent payment. You likely also pay insurance costs, utilities, and more. The housing costs you’re committed to paying each month can make it harder to accomplish other things you want to do with your money — especially if you live in a high cost of living area where it’s expensive to put a roof over your head.

The good news is, there are ways to save. In fact, finance expert Dave Ramsey has offered a simple suggestion almost everyone can implement to easily reduce their monthly bills.

Making this move could save you a fortune on home expenses

Ramsey’s suggestion for quickly and easily reducing your housing costs involves implementing a technique to lower your utility payments.

While utilities aren’t included in a monthly mortgage or rent payment in most cases, they are a required monthly expense you need to pay to be comfortable where you live. But you have quite a bit of control over exactly how much those utility bills add up to — which is why Ramsey made this helpful suggestion.

“Lowering your heating bill is one of the quickest ways to save on home expenses,” Ramsey said. Specifically, he went on to say, “If you adjust your thermostat seven to 10 degrees while you’re at work, you can save as much as 10% a year on heating and cooling!”

If you have a programmable thermostat, this is a really simple process — you can just set the thermostat to reduce the temperature in winter during the hours when you are at work and to increase the temperature a bit in summer during the same hours you’re away.

Many people also find it is helpful to adjust their thermostat at nighttime by a few degrees as well. You don’t need it to be quite as warm (or as cold) in the house while you’re sleeping, as long as the temperature doesn’t rise or fall to an uncomfortable level.

If you have a manual thermostat, this process can be a little trickier. But, as Ramsey explains, it is still entirely possible to save money by making a little adjustment. “If you have a manual thermostat, you can add this step to your morning routine — along with tooth brushing, bagel toasting, and coffee brewing,” Ramsey suggested.

Can you make some adjustments to reduce your heating costs?

Ramsey’s tip is a great one for everyone to try out because there’s really nothing to lose. You don’t need your house to be heated or cooled to the perfect temperature when you aren’t in it, and it makes little sense to pay just to heat or cool an empty space.

Start by adjusting your thermostat for a month or two to see if this technique will work for you. When you notice how much of an impact the change has on your monthly bills, chances are good you’ll commit to following through with it for the long haul.

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Ignoring the problem won’t do you any good. 

There’s a lot of different information that goes into filing taxes. Not only do you need to report the income you earned from your job, but you also need to report income you earned elsewhere, such as interest in your savings account or capital gains in your brokerage account.

Also, if you’re itemizing on your tax return, as opposed to claiming the standard deduction, you’ll need certain information so you know what to write off. If you own a home, for example, you’ll need a summary of the mortgage interest you paid the previous year.

Companies and entities are supposed to issue tax forms like 1099s by Jan. 31. That generally gives filers plenty of time to get their tax returns done by mid-April, which is when they’re due. (This year, tax returns are due by April 18.)

But what if you’re still missing a number of important tax forms at this stage of the game? Ignoring the problem isn’t the answer, so you’ll need to be proactive.

Reach out and ask

If you’re missing a tax form from a financial institution, like a bank or brokerage firm, your best bet is to first log into your account (if you have online access) and see if that form is available. Many entities no longer mail out tax forms, but rather, send them electronically. So it pays to check your spam filter to see if a tax form has gotten caught in it. But if not, logging into your accounts might give you easy access to a copy of any form you need.

If that doesn’t do the trick, reach out to the company or entity you’re missing a form from and follow up. It may tell you there was a delay, or it may tell you it mailed out your form already and it must have gotten lost. Either way, the entity should, ideally, be able to remedy the problem and reissue your tax form quickly.

What if you can’t get through to someone?

Let’s say the tax form you’re missing is one from a small business you did work from last year. Maybe you can’t reach someone in their accounting department about your missing 1099.

If that’s the case, don’t ignore the problem or decide you won’t report that income. That’s a bad idea — one that could get your tax return audited and eventually subject you to penalties for underreporting income.

Instead, comb through your bank account records and do your best to add up your earnings. That’s effectively the same thing as having a 1099 in your hands.

All income must be reported

Missing a tax form is not, in the eyes of the IRS, an excuse to not report income. So whether you’re missing a statement from your bank, brokerage account, or a company you did freelance work for, if you really can’t get your hands on a given tax form, do your best to generate that information yourself.

It’s also a good idea to involve a tax professional if you land in this boat. They may be able to advise you on how to best proceed in a scenario where your missing tax forms are unlikely to become available in time for the tax-filing deadline.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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It’s good advice worth heeding. 

Coming up with a home down payment is no easy feat these days. That’s because home prices are still elevated across the country. But you’ll need to prepare to put some money down when you close on your mortgage. And if you ask Suze Orman, there’s a minimum down payment you should aim for.

Aim for at least a 10% down payment

The well-known financial guru’s advice for home buyers is to put down a minimum of 10% at closing. Doing so could help minimize the monthly mortgage payments you’re on the hook for (whereas if you put down less money at closing, you’ll owe more money every month).

But Orman would prefer that buyers put down 20% when they close on a mortgage. And the reason boils down to avoiding private mortgage insurance, or PMI.

PMI is a costly premium that generally gets tacked onto your monthly mortgage payments when you don’t make a 20% down payment. And don’t be fooled by the word “insurance.” That insurance is there to protect your lender, not you.

You really don’t get any financial benefit out of PMI. All it does is make you pay more, when you’re already trying to cover the many different costs associated with owning a home. So it’s best to avoid PMI if you can.

But steering clear of PMI isn’t the only reason to try to put down 20% on a home purchase. The other reason, says Orman, is that if you’re not in a position to make that sort of down payment, it could indicate that you’re stretching your finances to make that home purchase. And that’s problematic.

Now, this isn’t to say that you can’t afford homeownership period if you don’t have the funds for a 20% down payment. It may just be that you ought to be looking for a less expensive home, Orman explains.

Waiting to buy if you’re short on down payment funds

If you can’t afford to put down 20% on a home, a mortgage lender might work with you anyway. Many lenders will accept 10% down at closing, and some will take even less.

But doing so could mean taking on larger mortgage payments, facing PMI, and struggling to keep up with your costs. And that’s not a situation you want to land in.

So if your finances are such that you don’t have 20% to put down on a home, waiting to buy could be a better solution for you. That way, you can go in with more confidence and potentially avoid financial stress.

Meanwhile, if you’re eager to boost your down payment funds, try following a strict budget for a number of months and cutting back on any expense that isn’t essential. That could mean canceling cable, avoiding restaurants, and skipping costly social events for a short period of time.

Getting a side hustle is another good way to boost your down payment funds. And you may decide to hang onto that side job after buying a home so you can better cope with the expenses involved.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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