Free Money Finance

How to Create Cash

Thought you all might be interested in a post on how to find some extra cash. I wrote it for The Consumerist.

How to Create More Cash (And Make Money Too)

Here's a comment recently left on my post titled More Creative Ways to Create Cash:

I don't like your idea about cashing in on insurance - however I never even thought about changing withholding and restructuring debt to come up with that little extra every month that I can now put away in savings. If I do as your calculator provides, I'll have saved over $2,200 this year alone. Great recommendations, I had no idea how large your site is.

Wow! $2,200 is not bad at all for a couple simple steps, huh?

For those of you who would like to make a bit more money (I'm working on making an extra $10k this year), check out these links:

• $10k Challenge: Turn Your Hobby into an Extra Income

• $10k Challenge: Make Money with Credit Cards

• $10k Challenge: Sell Stuff You Own

How to Create Some Extra Cash

Here's a piece from Yahoo titled 15 ways to live more cheaply. But in the piece, they also list some great ways you can make some extra cash. Their thoughts:

• Turn clothes to cash.
• Take in a tenant.
• Let your credit card pay you.

I've already weighed in on these three -- see details on selling your stuff, taking in a tenant and earning extra cash with a cash-back credit card. But that's not all I have talked about -- there are lots of other ways to put some extra money in your pocket. And even if not all (or even many) of these work for you, it's more than likely that some will. Check out these ideas for ways you can put more cash in your pocket:

• Free Money Finance Guide to Making More Money

• Turn Your Hobby into a Career and Love What You Do While You Earn

• How to Get Your Share of Billions of Dollars

Comments: Principle 1: Maximize Income from All Sources

Here are a couple comments I received to my post titled Principle 1: Maximize Income from All Sources that I thought you all would be interested in. They are from two people who are earning extra money in a unique way -- by renting out portions of their homes. Here's the first commenter:

I have had one or more persons paying rent at my own house since I bought my first property. First a friend that I know since college and now my wife. From time to time other friends.

By using low rents, and bigger house that could be afforded independently, we have all enjoyed the spare cash made available that doesn't have to go to a landlord or a bank.

Ok, I'm not sure about charging your wife rent, but the concept is still valid. Here's the second comment:

I also have someone renting my basement. The rent money goes directly towards other investments. I have been renting space in my house for nearly 4 years now. Originally, this strategy helped me get out of debt. Then the strategy helped me build a pretty high net worth. Ironically, I shared my experience and recommended to the others the same strategy. Everyone used to laugh at me. In fact, I recommended this strategy to a realtor more then 3 years ago and he called me crazy. I was crazy until he bought his first house and paid the entire mortgage by renting the rooms in his house.

If you're willing to think out of the box, there are all sorts of ways to creatively create cash -- even more than can be contained in one post. You can even turn your hobby into a career and love what you do while you earn.

For more on making money, also see the Free Money Finance Guide to Making More Money.

Cash in Your Spare Change to Boost Your 2006 Financial Fitness and Lose a Few Pounds in the Process

Here's a piece on how you can cash in on your spare change (with a few financial tips thrown in) courtesy of ARA Content:

The pledge to stick to a budget is one of the most commonly made, hardest to keep and often broken New Year's resolutions. Yet becoming financially fit in 2006 is not an impossible goal for the average American family.

The new year is the perfect time to make a fresh financial start, when post-holiday bills and pre-tax season planning inspire many people to become more financially fit. Financial planners agree that following some basic steps - like setting priorities and taking stock of expenses and income - can give you the best chance of keeping this important New Year's resolution.

Recently, the extended financial community has also been directing consumers' attention towards an often overlooked source of "extra cash" - their spare change. The average coin jar can weigh anywhere from 1 to 40 pounds, depending on the mixture of coins. Cashing in their coin jars is a "weight-loss pledge" that individuals could find easy to keep.

"Approximately $10.5 billion in change is hidden in U.S. homes," says Alex Camara, senior vice president and general manager, worldwide coin for Coinstar, Inc., whose big, green machines can be found in the front of supermarkets across the country. "That breaks down to about $99 per household. With gas prices uncertain and huge home-heating bills looming this winter, many individuals feel they can't afford to overlook any source of cash."

"The majority of the population accumulates spare change," Camara says. "The new year is the perfect time to make financial resolutions and do something proactive with that change."

Here are some basic tips for getting financially fit in 2006:

Set Priorities

• Define your financial priorities for the coming year. Is your goal to reduce or eliminate your credit card debt? Increase your retirement savings? Establish a college fund for your children?
• Recognize the difference between needs and wants. Most of us have far more wants than we could possibly finance. Plan to pay for the needs first. Assess just how much it costs every month to fund your family's basic needs, including housing, food, utilities, health care, etc.

Take Stock

• Gather up all your monthly bills and make a list of what you pay towards each.
• Collect receipts for a few months. Every time you spend money - whether it's for groceries, going to a movie, dining out or buying a pack of gum - keep the receipt. Use them to create a list at the end of the month to show you where your pocket cash is going.
• Similarly, take stock of all your available sources of income, including your salary, spouse's salary, bonuses, etc. Turn your spare change into cash that can be used for holiday bill-paying or to boost your savings account by visiting your local Coinstar Center. Visit www.coinstar.com to find a location near you.

Create a Budget

Once you know how much money you have coming in and going out every month, create a budget based on your priorities and past experience. Be realistic about what you can and cannot do without. For example, if dining out is a big expense every month, you may be able to trim it down, but probably shouldn't eliminate it from your budget all together.

FMF recommends: You Need A Budget because it's a simple, effective, powerful budgeting system.

Work Some Magic - Turn Your Coins and Cash into an Online Gift Certificate

Here's a piece on how to turn your coins into an online gift certificate courtesy of ARA Content:

Once considered a novelty, online ordering has become a popular way to shop. A 2005 study by Shop.org and Forrester Research predicts that online sales, excluding travel, are expected to reach $109.6 billion by year end. Consumers love online shopping for its convenience - they can shop anytime, anywhere that they have access to a computer. As more and more retailers put their wares on the Web, shoppers can find just about anything they're looking for.

Until now, you needed a credit card to shop on the Internet. A new offer from Coinstar, the leader in self-service coin counting, and Amazon.com changes all that. It lets customers instantly convert their jar of change into a gift certificate redeemable at Amazon.com and pay no coin counting fee.

And idle change at home can buy more than you think. "The average household has $99 worth of change lying around," says Gretchen Marks, vice president of marketing for Coinstar, Inc. "Now, thanks to this new program, people can turn this change into clothing, music, books, movies and more from Amazon.com. Best of all, there is no coin counting fee."

Coinstar estimates that approximately $10.5 billion in spare change is sitting unused in American households. Prior to the joint venture with Amazon.com, there was no easy way for consumers to spend that money online. "One quarter of the U.S. population doesn't do anything with their change, primarily because they don't want to pay a fee and it is inconvenient to cash in. Visiting a Coinstar kiosk when you grocery shop solves both problems," says Marks.

To take advantage of this new program, all customers have to do is visit a Coinstar Center at their local supermarket, which they can locate by visiting www.coinstar.com. Users simply insert their coins and bills into the machine, select the Amazon.com option and then a receipt is printed with a redemption code that can be immediately used to make purchases at Amazon.com.

The gift certificate redeemable at Amazon.com provides millions of adults and kids who prefer to use cash or don't have credit cards the ability to shop online. "This is a really convenient way to use your 'found money' to shop online," says Marks.

Coinstar also allows consumers to convert loose change into a variety of gift cards redeemable at leading national retailers such as Starbucks, Linens 'n Things, Pier 1 and Hollywood Video. And there's no service charge or coin counting fee when you redeem your coins for gift cards or gift certificates at thousands of supermarket locations nationwide.

To find out which supermarkets offer the program on their Coinstar machines, visit www.coinstar.com.

Wow! Did you read those stats? Again:

• The average household has $99 worth of change lying around
• Coinstar estimates that approximately $10.5 billion in spare change is sitting unused in American households

That's not bad at all. You may want to hunt around a bit. That new iPod Shuffle you want might be sitting around your house in the form of spare change. ;-)

Uncle Sam May Owe You a Tax Refund

Here's some great news on tax refunds from Bankrate:

The IRS owes 84,000 taxpayers $73 million in refunds -- for an average $871. That's the average amount of the tax-refund checks returned to the Internal Revenue Service because they were undeliverable. Of course, that's an average. Your unclaimed check might be less, but then again, it could be more.

Here are the two main points:

The IRS has added a refund locator to its Web site for filers who think that one of the undeliverable checks is theirs. To use it, you must enter your Social Security number, filing status and the amount of the refund shown on your tax return. If the money has come back to the IRS, the filer will get instructions on how to resolve the problem and get the correct refund.

Executors should explore whether a refund check might be involved in an estate's settlement.

Wow! Someone's going to be happy when they get this money. But how did it get lost in the first place -- are people that bad at managing their money? Don't you think that if you submitted a return and were owed a $1,000 refund that you'd keep track of where it was and make sure you got it no matter what? I know I would!

Still, it's way better news than much of the tax-related discussion out there today (like Keeping a Bigger Piece).

For more on lowering/managing your taxes, check out these posts:

• Property Tax Tip
• 5 Audit Red Flags
• Work Hard, Earn Less?

Give to Others and to Yourself

Here's a quick tip you can use this fall that allows you to give to others while also helping yourself out financially:

Simplify and get rid of unused items.  You’ll be helping others in need, and if you itemize, charitable contributions are fully deductible.  Estimate the value of non-cash items like clothes, furniture, and books. Always request a receipt for your records.  Just by cleaning out your closets each spring and fall you can easily save $200 to $300 -- and at the same time bless others who would treasure your "junk".

We do a massive cleaning twice a year. Basically, we go through the house and anything that hasn't been used in a year (and has no foreseeable future use), gets given away. I know what you're thinking: "As soon as I give it away, that's when I'll need it." Well, I used to think that, but we've been going through this process for five years now and have never had it happen -- though I have had my wife sneak in a few things I wanted to keep but she saw an opportunity to dispose of them. ;-)

Best of FMF: Eight Unusual Ways to Create Cash

Here's a great post I wrote waaaaaaaay back in May (ok, it seems like a long time ago) when only mom and I were reading this blog. It's called "Eight Unusual Ways to Create Cash" and it gives some great suggestions for getting some extra money.

For those of you who like summaries, the suggestions are:

1. Discover Antiques
2. Use Only Cash
3. Practice Self-Control
4. Eliminate Debt
5. Maintain Your Stuff
6. Get Money That’s Owed to You
7. Get Freebies and Coupons from Companies
8. Asking for Discounts on Purchases

Stop by if you could use some extra $$$$$$.

More Creative Ways to Create Cash

My post a few days ago on how to create cash seemed to hit home with people.  So, I thought I'd give you some more ideas for turning up extra dollars:

• Sell stuff – Consider turning some of your belongings into cash.  Have a garage sale or place ads for items of value you own but can do without such as antiques, cars, appliances, etc. Just by cleaning out your closets each spring and fall you can easily earn $200 to $300.
• Get a part-time job – Most Americans are already working pretty hard, but you may be able to pick up an extra part-time job for a year or so.  That extra $200 per month could come in handy as a debt-fighter.
• Change your withholding – Americans get tax refunds averaging nearly $2,000 because they claim low exemptions.  Although people like refunds, they are really giving Uncle Sam an interest free loan!  Set your W-4 exemptions correctly and you could generate over $100 per month.
• Cash out insurance – For those people who have cash value insurance, you may be able to get access to that cash.  But there are drawbacks, and this can be a complicated venture.  See your insurance agent for specifics.
• Restructure your debt – Consider taking out a consolidation loan to borrow at an attractive rate, and then use this money to pay off higher interest rate loans, effectively “moving” a chunk of your debt to a lower-cost loan.  Again, you have to be disciplined and not spend the windfall, but this can often allow you to be debt-free sooner. The down side to consolidation loans is that you’ll have to pledge something of value (that you might lose if you default) as collateral.

That's it for this time.  Come back frequently -- we'll have more!!!

Eight Unusual Ways to Create Cash

If you've been reading this blog for any amount of time, you know that Principle 1 is to maximize income from all sources and Principle 2 is to minimize expenses.  But these are easier said than done.  After all, everyone would have more money if it was that easy to make more or spend less, right?

O.k., I'll give you that making more might be a bit tough, but it's also not impossible.  And spending less is relatively easy if you approach it with the right attitude and commitment.  In fact, here are eight ways you can create extra cash that you may not have considered -- some simple steps to help you uncover hundreds of dollars you probably already have!

Discover Antiques

PBS’ popular Antiques Roadshow has demonstrated that many people unknowingly have valuable antiques in their homes.  For instance, one woman discovered the “worthless” vase given by a friend was actually a rare piece worth $12,000.  Scour your closets, attic, and basement and take items you suspect are valuable to an expert for appraisal.

Or if you enjoy searching for treasure, hunt for antiques at garage sales, flea markets, and consignment stores.  An avid cookie jar collector, Tiana Brown of Jasper, Georgia recommends the following for new collectors: “Start off slow and small, and pick an area of antiques/collectibles that captures your fancy. Browse as many antique stores as possible to get an idea of where you would like to start, and what resale price range you can expect on your specialty.  Keeping in mind a small percentage for resale profit, set a limit of what you will bid for an item.”  For tips on how to find and buy antiques, check out the Antiques Roadshow section of www.pbs.org or read Buying and Selling Antiques: A Dealer Shows How to Get into the Business.  You may find something priceless!

Use Only Cash

It seems impossible to exclusively use cash in today’s credit-oriented world, but those who do “create” significant cash.  How? By spending dramatically less. Ron Blue, author of Master Your Money, notes that the mere use of credit cards causes a family to spend 34 percent more even if the statement is paid off monthly.  Author Nancy Dunnan agrees in Never Call Your Broker on Monday by noting, “People like your parents or grandparents actually went through life using checks or cash.  It worked then and it works now.  Do the same and you’ll wind up spending 20% to 45% less.”

So use cash and reap a windfall. Imagine how spending one-third less could impact your family finances!

Practice Self-Control

One of the greatest ways to save money is to avoid impulse buying.  Establish a rule that if you see something you want, you’ll wait at least two days before purchasing it.  If you still feel you need it, then buy it.  In most cases, the desire to have that item will be gone, and you'll have avoided an unnecessary purchase. 

Financial counselor Larry Burkett recommends a similar plan in Your Finances in Changing Times.  Larry comments he experienced dramatic results when he initiated a delayed purchase plan for tools (his weakness): “I continued that plan for over six months without purchasing a single item on my chart.  The reason was obvious: once I left the store, the impulse passed.”

Eliminate Debt

(yes, even Principle 3 is in this post)

Paying off a credit card charging 17% annual interest is equivalent to investing money with a before tax, guaranteed return of almost 20% -- a rate any investor would love. According to debtguru.com, the average amount of credit card debt in households with more than one card is now more than $8,000. That’s 167% more than the $3,000 average for households in 1990.  Eliminating this debt would save almost $1,400 per year!  If you need help getting out of debt, call the nonprofit National Foundation for Consumer Credit at 800-388-2227.

One way to lower debt easily is to refinance your mortgage.  By lowering your rate only 1 ½%, you’ll save over $64 a month over 15 years on a $75,000 mortgage (a total savings of almost $11,600!).  Many banks are so hungry for customers that they’ll forego the closing costs you’d normally pay.  (Your current bank may be willing to decrease your rate just to keep your business.)  But even if you pay these costs, it makes sense to refinance if you will own your house long enough to re-coup the expenses. 

Maintain Your Stuff

One way to create cash is to avoid major expenses.  Regularly maintaining the high-cost items you own can significantly increase their lives. This means servicing your car regularly, having the furnace and lawn mower cleaned seasonally, and vacuuming refrigerator coils monthly. Check owner’s manuals for maintenance specifics.  Maintaining your possessions can keep them running more efficiently and lasting longer saving thousands over the years on utilities, repair bills, and, of course, replacement costs.

Jodi Doyle (formerly) of St. Petersburg, Florida has reaped the benefits from this practice.  "My last refrigerator and washing machine each survived 20 years and a move to Europe because I took care of them regularly,” she comments with pride.  “It took some extra time and effort, but I even performed preventative maintenance.  And the appliances repaid me by lasting much longer than I expected.”

Get Money That’s Owed to You

Believe it or not, there are billions of unclaimed dollars in America.  They are held by federal and state governments as well as private companies in the form of pensions, bonds, taxes, real estate, and savings accounts.  These items have been forgotten, abandoned, or belong to unsuspecting heirs of someone deceased.  In Assets Unknown: How to Find Money You Didn’t Know You Had, David Folsom outlines the process people should follow to find assets owed to them.   Folsom notes that discovering these assets is easier than you’d think.  In addition to his book, he says a seeker simply has to use “her telephone, some stationery, and a little common sense.”

Folsom claims several success stories such as the retired school nurse who found $5,000 in retirement funds due her nineteen years after she left the job. Uncover any hidden assets you’re due by following Folsom’s advice or checking out www.unclaimedassets.com. 

Get Freebies and Coupons from Companies

Many companies will give you products just for asking because they want you to try their brand.  To find a list of freebies, call for Freebies magazine at 805-566-1225 or search under “freebies” at www.google.com.

Or if you’re more of a “show me the money” kind of person, simply ask companies for coupons. Getting coupons on products you always buy is money in the bank.  Check out the internet (www.valupage.com) or contact a company directly for coupons.  Sandi Johnson of Bloomfield, Iowa regularly writes companies and compliments their products.  She has received free products, coupons, and other offers for a small time investment.

Asking for Discounts on Purchases

Many retailers are willing to sell an item for less than the listed price, but most consumers don’t think of asking.  With mark-ups of 20-100%, stores have plenty of room to lower prices and still make money.  So ask.  Also, be knowledgeable.  Come armed with competitive prices from other stores or the internet.  And if you’re not satisfied, use the greatest power you have -- walk away.

One effective technique is to offer cash when negotiating.  Nancy Dunnan points out that “retailers, restaurants, and hotels pay 2% to 5% to the credit card company when you use your card.  If you pay cash, bargain for a discount.” But 2% to 5% is just a start. There’s something magical about cash that just makes people want it.  The powerful sight of five $100 bills for that $750 couch will be hard for many managers to refuse.

Dave Ramsey, best-selling author of Financial Peace, wholeheartedly recommends bargaining with cash.  And so he should.  Ramsey bought his three-year-old van for $4,000 below wholesale book value simply by “laying out sixty $100 bills in front of the seller.”  As Ramsey placed the last bill down, the seller scooped them up and said they had a deal.  Kelly Talcott from Nashville, Tennessee offered $350 cash for a $500 mattress.  The combination of a slow sales season for bedding (the holidays) and the offer of cash was enough for the salesman to accept immediately.  Talcott then got him to throw in bed rails and delivery for free.

These are just a few unique ways you can create cash.  Use them to give your family that extra cash you need.

Update: Check out Outside the Beltway.  I'm part of the Traffic Jam!!!