Three Savings Strategies to Recover from a Tax Bill

Three Savings Strategies to Recover from a Tax Bill

(ARA) - As April 15 creeps closer and closer, many Americans may be facing the unpleasant reality that their paycheck withholdings weren't enough to cover their taxes and they'll need to dip into their savings to cover the bill.

"Having to use your savings to pay an unexpected tax bill can be upsetting, but it doesn't need to spell financial disaster," says Steve Krenzer from LowerMyBills.com. "Many Americans may find that with just a few simple steps they can start saving money and get their bank accounts back on the road to recovery."

From brown-bagging your lunch to foregoing movie night, we have many opportunities to find savings. One good technique is to evaluate your recurring monthly expenses. By trimming these, you can set yourself up to enjoy recurring savings over an extended period of time.

Here are three savings strategies that can help you recover from a tax bill:

Pare Down Insurance Premiums

Auto insurance is a necessary expense, but it can also be one of the easiest to trim. The average expenditure on auto insurance is roughly $817 per year, according to data from the National Association of Insurance Commissioners. If you're paying more than that, look for ways to cut

the cost. Comparison shopping online is one of the quickest, easiest ways to find a better deal on auto insurance.

Also, carrying a higher deductible can help lower your premium, putting more money back into your savings account. Just be sure that you can cover that deductible if you have an accident.

Minimize Your Mortgage

For most Americans, their mortgage is their single biggest monthly expense. Refinancing your loan at a lower interest rate could dramatically reduce your monthly payments.

Be sure to do your homework and don't sign any mortgage agreement until you are sure you understand all the terms and conditions. Remember, your home is not only your biggest expense, it's probably also your biggest investment and you need to protect it.

Eliminate Cell Phone Extras

Cell phones are no longer a luxury. Today they're all but a necessity. Having a means of instant communication is viewed as a safety precaution and a vital tool for our modern business and social lives.

But do you really need to access the Internet, send text messages or play games on your cell phone? Simply cutting these extras and opting for a basic plan -- where your phone functions as just a phone -- could save you hundreds of dollars in a single year.

"The current economic climate can make depleting your savings - for any reason - a scary prospect, but remember that there are steps you can take to start rebuilding those funds," Krenzer says.

You can compare rates for these and other monthly expenses at LowerMyBills.com.

Courtesy of ARAcontent