Your May Financial To-Do List
1. Stop Paying PMI
If you bought your home for less than 20 percent down, you've probably been paying private mortgage insurance (PMI) on your loan, typically an extra 1 percent of the purchase price. If your equity position is now at least 20 percent of the original purchase price, you may not have to pay mortgage insurance anymore. Contact your mortgage servicing company to see whether they can remove the PMI. You may have to pay a few hundred dollars for a new appraisal, but you could save thousands per year.
2. Take Advantage of '529 Day'
The college savings industry has embraced May 29 as "529 Day," an opportunity to remind parents of future college students of the benefits to saving in a tax-advantaged 529 college savings account. Money put into a 529 plan grows tax-free, and you won't pay any taxes on withdrawals used to pay for college.
3. Dispose of Unneeded Financial Documents
This is a good time to weed out financial documents you no longer need. How long you should wait before disposing of a document varies. Generally, you can throw tax documents after seven years. Also, look into removing documents that are stored on your computer, external drives, and mobile devices.
4. Review Recurring Charges
Small charges can slip through unnoticed, especially if they're recurring fees for a service you keep meaning to cancel. But these small fees add up quickly. Take a look at your most recent credit card statement and highlight any charges you could eliminate. Contact the companies to cancel your subscription—and try your luck at requesting a refund for previous charges as well.
5. Budget for Home Improvement Projects
May is a great time to find deep discounts on materials for the home improvement projects you plan to tackle this summer. Whether you want to install a new deck or replace the front door on your home, you'll save money if you make these purchases now, rather than in the middle of the summer. Even if you aren't quite ready to get to work, you can still determine what materials are needed so you can take advantage of the great sales this month, especially around Memorial Day.
*Brought to you by Catholic Charities Financial & Housing Counseling program:
(320) 650-1664
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