I visited a family of antiques dealers this morning at their store in a nearby strip mall. I commented that the store was cold, which resulted in the owner telling me how bad the gas furnace was. Noting that all the ductwork was in the ceiling, I suggested that the ducts may be leaking and heating the area above the ceiling tiles.
While I was explaining payroll-tax withholding to the owners’ wife, the owner got a ladder and discovered that the main seam in the metal ductwork was not sealed and that the area above the ceiling tiles was stifling hot. Some heating and air-conditioning experts estimate that repairing leaking ducts will save 10% to 20%. The owner will be able to repair the ducts himself with some putty and tape.
Raise deductible, lower premium
I reviewed some of the antiques shop’s expense invoices and found that the automobile insurance was high. What was the deductible on their van? I asked. The answer was $200. The wife called their insurance agent and found they could save $400 by increasing the deductible to $500. Increasing the deductible to $1,000 would result in a savings of 40% of the premium!
Next, I checked the shop’s bank statement to make sure the balance was correct. While doing so, I saw several ATM charges. The wife explained that she stopped at the ATM Monday, Wednesday and Friday each week to get cash for family needs. Their bank was across the county, so she used the local bank, which charged an ATM fee. I told her to either change banks or stop at the ATM only once a week because fees were running $468 per year. The ATM fee is $3 if you get $20 or $200.
Paying son to work saves taxes
As I was leaving, their son came to the shop and asked for his allowance. The son is old enough to have a part-time job. It made more financial sense for the antiques shop owner to not pay his son an allowance but instead hire him and pay him a reasonable wage. The payment of the salary would not result in losing the son as a dependent, and his salary would reduce the antiques shop’s income taxes.
Many a father arriving from work to find a house with every light blazing has asked, “What? Do I own stock in the electric company?” Unless antiques dealers own stock in the utility company, bank and insurance firm, why should they pay more of their hard-earned money than necessary? Why pay the IRS more than needed?
And are we to argue with Benjamin Franklin’s sage observation that “a penny saved is a penny earned”? It was true in the 18th century and even truer today in this time of economic turmoil.
My advice? Don’t overlook even the smallest ways to save money. They will add up in the long run.
– Jim Sturgill is a director of WorthPoint and founding partner of Sturgill & Associates LLP, a DC and Baltimore area CPA firm.
More Jim Sturgill Dollar & Sense columns
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WorthPoint—Get the Most from Your Antiques & Collectibles