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May 29

How to Max Out Your Roth IRA With Found Money

Although states are reopening and economies are up and running again, many Americans may still be suffering financially from the shutdown. We think there are a few things you can do to free-up some extra cash in the budget (or max out your Roth IRA), whether or not you lost your job or have been financially impacted from coronavirus. Some of this “found money” requires almost no work, and some of it requires a few hours a week. Here’s a few ways you can put extra money in your wallet or retirement account to help solidify your financial future.

Switch to high-yield savings

If your savings account is with a traditional brick-and-mortar bank, you might be missing out on hundreds of dollars of interest every year. The national average savings account interest rate is just 0.09%. Meanwhile, high-interest savings accounts are around 1.25% or higher. For a couple with an emergency fund of $30,000, they could earn an extra $348 every year by switching from an average savings account to a high-interest savings account. If you’re hesitant to switch from your local bank to an online-only bank, you can always keep an account open with your local bank and simply transfer money into your online savings account.

Get your employer match

If you watch our show, you hopefully already know how important getting your employer match is. Unfortunately not everyone watches the Money Guy Show, and every year workers with an employer match typically miss out on about $750 of free money. Our couple from above is missing out on about $1,500 in free money every year. Make sure you are getting your employer match and not leaving money on the table like most Americans.

Cut the cord

We don’t want you to sit in the dark every day, staring at the wall with nothing to do. There are cheaper options available for watching TV than paying for cable, though. The average American spends $90.57 per month on cable and $23.09 on TV or movie streaming services. If you cut the cord and switched to a live TV streaming service, you could expect to save about $40 per month compared to cable, or $480 per year. We realize that cutting the cord completely may not be realistic for everyone, but there are still ways to save money on TV and keep watching the programs you enjoy. If you’re paying too much for cable TV, there are many different live TV streaming services that could save you money.

Shop around for insurance

Have you shopped around for car insurance or homeowners insurance in the last several years? If you haven’t, you could be paying too much for your home and auto insurance. Nerdwallet found that the average driver could save $859 a year just by shopping around for car insurance. We think by shopping around for homeowners insurance as well, increasing your deductibles, and grouping your insurance, you could save $1,000 per year. Even if you think you have good rates, it doesn’t hurt to shop around and see what’s out there. Chances are you’ll save some money in the process.

Sell your unwanted stuff

One person’s trash truly is another person’s treasure. The next time you’re cleaning out the closet, you might want to sell some of your old stuff online instead of getting rid of it. Designer shoes and clothes, handbags, electronics, books, watches, and more can be sold online for cash. There are some websites that buy items directly from you and then resell it; this method won’t be as profitable as selling your own stuff, but it is less work. There are dozens, if not hundreds, of different websites you can use to sell your stuff. Some help facilitate local sales and others will require items to be shipped to your buyer.

By cleaning out your home and selling unwanted things or items that aren’t being used, we think you could easily make $1,000 or more. Old cell phones, computers, unused gift cards, and designer fashion items are among the most valuable items you can sell online. 

Join the gig economy

Nowadays, anyone with an internet connection or a car can work whenever they want to make extra money on the side. Picking up a side hustle could become lucrative, but even if you only work a few hours a week you could earn around $200 per month (the average income from side hustles is $1,122 a month, but the median income is around $200).

There’s a place in the gig economy for you no matter what you enjoy doing. If you enjoy driving and don’t want to interact with people very much, you can deliver groceries or food. (If you love driving and people, you can drive for a ride sharing company). Creatives can earn extra money by posting their work online and getting paid by the view. Freelancers can do just about anything for employers that need tasks done but don’t want to hire a new employee. If you’re an educator at heart, you can teach or tutor kids online. There are sites that allow you to do just about anything, like fixing toilets, mowing lawns, or moving furniture.

In total, we think you could earn an extra $6,728 in found money per year. That’s enough money to max out a Roth IRA and have some left over! Even if you don’t do everything we listed, doing one or two could still result in thousands of dollars in found money each year and that could turn into hundreds of thousands of dollars by retirement. Our latest show is all about how to find this easy money; watch it now on YouTube below.