Summer Financial Fitness: Are You Leaving Money on the Table?

It’s summertime and the living ain’t easy! Virtually everyone is short on cash and everyone else is smartly conserving. I don’t know about you, but I find it tougher to be frugal and smart during the summer than during any other season. Everything is so cute and vibrant. The water is blue, the flip flops are pink and all of the shops beckon like sirens.

Where I might normally give in to the siren song and splurge and indulge a bit, I’m now practicing a bit of restraint. While I’m doing fine now, I’m concerned about how I’ll fare as the economy continues to flail. I’d hate to blow my financial cushion on a wonderful-though-brief holiday only to find that I have to scramble and scrape for months to come.

So, as always, I’ve got a plan–a financial fitness plan for the summer. I’ve used this plan during other feast-or-famine periods of my working life and it’s served me well.

SUMMER FINANCIAL FITNESS PLAN

Don’t cancel your vacation: If you’ve planned it and paid for it, go for it. Just cut back on the souvenirs and expensive extras. If you haven’t planned a trip, consider taking a long weekend or a series of day trips to a scenic spot close to home (Your dollar will go a lot farther even if you don’t). The break will allow you to recharge your business or job-searching brain.

Move your money: When was the last time you checked the interest rate you’re receiving on your checking and savings accounts? If they aren’t getting at least 3% interest, move your money. You don’t have to close your existing accounts to take advantage of the higher yielding accounts offered by Internet-based banks such as E-Trade and ING. Your existing bank may also offer higher yielding Internet-only rates. These accounts are linked to your existing accounts so you can transfer money between them as needed. And, your money is accessible anytime and earning interest.

Pay more than the minimum on your credit cards: Trust me. No better bang for your buck. Even paying $5 more than the minimum will benefit you, both in terms of reducing your principal and in keeping your good credit. The new FICO ‘08 scoring system rewards higher-than-minimum payments.

Move your credit card balance: If you have good (or good enough) credit, consider moving your balance to a card with a lower interest rate. Blue from American Express and Capital One (Platinum Prestige) are both offering 7.9% regular APR (Blue offers 4.99% on balance transfers) and no annual fee. Compare credit cards interest rates on Bankrate.com.

Refi your mortgage: If your credit allows, consider refinancing your mortgage to get a lower interest rate and lower your payment. Watch out for origination fees and stay away from ARMs (unless you are sure you can handle what follows). You can also compare mortgage rates on Bankrate.com.