Don’t wait till the last minute. Start with these smart tips to stay on top of your finances and save big this summer!
Ah, summer. Time to relax, go on that much-needed vacation and put your feet up. But it’s also a great time to get or keep finances in order. And that translates to ensuring you don’t break the bank, among other things.
Speaking of finances, did you know that the average American household will spend an average of $2,830 on summer expenses like travel, entertainment, and outdoor activities? With summer in full swing, it’s more important than ever to be mindful of your spending and make the most of your budget. It’s also a great time to look for ways to cut costs and even plan for next year’s tax season.
In this newsletter edition, we’ll cover the best-kept secrets on maximizing your summer savings such as:
- 💲Smart Ways to Prepare for Next Year’s Taxes
- 🚚Snagging the Best Deals on Amazon Prime Day
- 🪙Ramping up Savings for Your Summer Road Trip
It’s a packed one, so let’s get our ‘hack’ on!
You Can Never Be Too Early With Tax Prep
Tax season usually comes with two scenarios: you get a tax bill (meaning you didn’t pay enough taxes) or a tax refund (meaning you overpaid). Whichever scenario you had to deal with this past season, it’s a good idea to start preparing this summer. Here are three nifty moves you can make:
Review your filing for 2022
If a tax bill showed up at your doorstep in the last season, you need to find out what led to that and see what needs to be done about it.
For example, it could be a one-off situation, coming from earning an unusually higher income like a huge bonus, which is no big deal. But say it’s something like revenue recurring from running a successful side hustle.Â
In that case, you need to adjust your withholdings or start making estimated tax payments quarterly— to lessen next season’s tax bill.
It all comes back to finding out what’s what, and you can only do that when you review your 2022 filing.
Check your withholdings
If you owed more taxes in 2022 than you expected, then you may need to adjust your paycheck withholdings for 2023. You can do this by either reducing the number of allowances or saving more money from each paycheck. You can make these changes on Form W-4 through your employer. To figure out how much extra tax you paid in 2022, divide that amount by the number of paychecks you will receive in 2023.
Check out the IRS’s dedicated tool for estimating your withholdings*
Paycheck Withholding Estimator
*This tool may not be suitable for some complex situations
Revisit your portfolio
Now is a good time to assess your portfolio, even if you haven’t started thinking about next year’s taxes yet.
If you have brokerage, tax-deferred, and tax-free accounts, you can strategically decide where to hold your assets. It’s worth paying closer attention to investments in your brokerage account because they are taxable.
For instance, certain investments like bonds, specific mutual funds, or real estate investment trusts that generate income may result in a yearly tax bill within a brokerage account.
However, if your earnings are below a certain threshold, you may not owe taxes on your investments. In 2023, you could qualify for a 0% long-term capital gains rate if your taxable income is $44,625 or lower (or $89,250 or lower for married couples filing jointly).
Don’t Miss Out On Prime Day Deals
It’s no news that prices have soared across the board this year, thanks to the rising inflation. And even though things are a little calmer, it’s wise to scout for chances to stock up on everyday essentials and more practical purchases. Enter Amazon Prime Day.
Kicking off at 3 a.m. ET on July 11 and running through July 12, Prime Day is the perfect opportunity to save on your necessities. Here are some quick tips to help you get the best deals:
- Check out the early deals; some of them are already live!
- Scroll through upcoming deals and set up deal alert notifications on Amazon or through your Alexa device.
- Add items to your cart immediately when a deal is live.
- Be aware that some intermittent Lightning Deals sell out quickly. Once a sale item is in your cart, you have 15 minutes to complete the purchase.
- If there’s a specific product you want and it’s not in upcoming sales, create a wish list for it. Amazon will alert you if that product becomes part of a Prime Day deal.
Of course, Amazon isn’t the only place to get shaved-off prices. Other shopping events to look out for include Best Buy’s “Black Friday in July” event from July 10-12, and Target’s “Target Circle Week” from July 9-15.
Road Trip Savings
2023’s gas prices are considerably lower than they were last year.
But even with the drop, there are ways to save on fuel costs as you hit the road this summer.
A Good Gas Rewards Credit Card Will Go A Long Way
Some credit cards, like Chase Freedom Flex and Citi Custom Cash, offer up to 5% cash back on gas purchases from July to September. Sam’s Club also has certain cards that allow consumers to earn cash back on gas.
It’s worth checking the perks of your existing credit cards too, as you may already have a good gas rewards credit card without realizing it. However, it’s generally advisable to avoid gas-branded cards that often have high 30% annual interest rates and limited gas purchase discounts.
Stack Up Those Discounts
You can use apps like Upside or GasBuddy to find better gas prices. It’s also beneficial to combine multiple offers whenever possible. For instance, a credit card might provide 5% cash back on gas, while a gas station app could offer a 10% discount per gallon.
Check Your Rental Coverage
Rental cars are relatively cheaper this year. But before you rent one, double-check if your credit card already provides insurance coverage. Many credit cards have travel perks that people may be unaware of, such as insurance coverage for rental cars, trip delays or cancellations, and lost or delayed luggage.
The Best Summer Ever
There’s a great opportunity to take control of your finances and maximize your savings this summer. By implementing smart tax strategies, taking advantage of discount deals, and optimizing your fuel savings for summer road trips, you can make the most of your budget and secure a brighter financial future.
Here’s to a relaxing and financially rewarding summer!
