smart spending

5 big bills you can cut fast

4. Taxes

If you're like most people, you probably don't pay much attention to taxes until April 15 rolls around. But taxes affect us daily, whether we're working, shopping or saving for important milestones like retirement.

Here are a couple of ways to reduce taxes:

  • As it turns out, fall is the perfect time to trim taxes. This year, 16 states sponsored reprieves from sales taxes as part of back-to-school shopping. The dates typically are scheduled anytime from the last week in July to mid-August.
  • Grab breaks for low-income earners. One out of 4 eligible taxpayers fails to claim the earned income tax credit, or EITC, worth as much as $6,143 a year depending on someone's earnings, marriage status and whether they have children or other dependents. If you qualified for but didn't claim the EITC, file an amended tax return.

For more tips on trimming your tax bill, read the Bankrate feature "10 often overlooked tax breaks."

5. Car insurance

Americans typically spent $1,020 to insure one medium-size sedan in 2013, but in many parts of the country, premiums can be much higher, depending on the type of car you insure and your driving record. Yet, there's still much you can do to lower rates.

  • Boost your deductible. That's the amount you pay out of pocket before insurance kicks in. Raise yours from $250 to $500, and you'll shave money off your insurance premium because you're essentially agreeing to take on more financial burden in the event of a mishap.
  • Trim insurance for that old clunker. If your wheels are worth little, consider getting rid of collision coverage, which pays for repairs.
  • Snag low-mileage discounts. Have you cut back on your driving to save gas? Let your insurer know. If you don't drive much, usually no more than 7,500 miles a year, you can get rates lowered.
  • Bundle your policies. Buy more than one policy from the same insurer and you may well get a break of 5 percent to 15 percent, according to the Insurance Information Institute. So try keeping your auto, homeowners and other insurance policies with one company.
  • Make age-appropriate auto decisions. A driver's age may impact insurance rates. So, restrict your teen to driving the family's oldest car. Then, let the insurance company know your son or daughter has no access to more valuable cars you own. Older drivers may also pay higher rates. Seniors ages 55 to 70 may qualify for price breaks if they take a safe-driving course, such as the 55Alive program that's run by the AAA and the National Institute of Highway Safety.

 

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