How to protect your credit cards
How to protect your credit cards
“Ever wonder how your credit card could have been used to buy cellphones in Cleveland when you just swiped it at your grocery store an hour ago?” asked Christine DiGangi in Credit.com. It actually isn’t difficult for thieves to “manufacture fake cards” with stolen data and go on spending binges. And though it’s possible that your data might be stolen by an “ATM that has been tampered with” or a dishonest restaurant server, it’s far more likely your card will be compromised “in one of those massive data breaches you’ve been reading about recently.” You can’t prevent all theft, but you’ll be more protected by using only secure payment websites, never storing payment information in your Web browser, and checking your account activity daily.
Avoid common investment errors
There are some mistakes that I see investors make again and again, said John Schmoll in DailyFinance.com. “Not taking an active interest in investing” is a major one. “I have seen investors lose tens of thousands of dollars” because they didn’t check on their accounts every few months. Make sure you schedule regular times throughout the year to rebalance your investments and keep an eye on fees, which can “add up to a significant drain on your portfolio.” As always, keep your portfolio balanced to avoid risk. And in your attempts to diversify, try to avoid becoming “highly concentrated” in the relatively small number of popular stocks that form the core of many mutual funds. Finally, be rational about your money. Investors who lead with their emotions can lose big money by following the herd or reacting hastily to each upswing and downturn.
Catching counterfeit goods online
If an online deal seems too good to be true, said Kristin Wong in Lifehacker.com, it probably is. “To avoid being scammed” by counterfeit goods, be especially cautious about buying handbags, wallets, watches, jewelry, electronics parts, and pharmaceuticals—they are some of the most commonly faked goods in the U.S. And be sure to vet sellers before you hand over any cash. Look for physical mailing addresses, phone numbers, and return policies before you click Buy, and check out a seller’s reviews before purchasing anything. And “when it comes to pharmaceuticals, it helps to confirm a seller’s affiliation with a manufacturer” so you don’t end up with fakes.
Signs you should keep renting
Trying to decide whether to rent or buy? asked AJ Smith in Credit.com. While the homeownership decision is “ultimately personal,” there are a few things to consider before taking the plunge. “If you don’t have an emergency fund yet, or if purch asing a home would drain all of your savings, you probably aren’t ready.” Besides a down payment and a mortgage, “homeownership comes with expenses” like repairs and improvements, so basic safeguards, like job security, are key. “If you are unsure whether you will have your job for the next few years, you may want to wait.” And before you rush into buying, do your research and “learn what you can about the local housing market, including the price trends, the school district, and the property taxes.”
Be smart with rebates
Don’t blow your tax refund, said Gene Kosowan in DigitalJournal.com. If you’re getting money back from Uncle Sam this year, be sure to “get the biggest bang out of those bucks.” The best thing to do is sock the money away in a retirement account. But if you are going to spend it, why not pay down your debt? Some experts suggest attacking high-interest debts first, but others advise taking “the path of least resistance” by prioritizing lower-rate obligations. You should also consider using part of your return to set up an emergency fund. For homeowners investing in your property is a smart move. You’ll improve your current space and get “a higher resale price on the home once you decide to relocate.”
Vetting alternative funds
If your financial adviser is suggesting “alternative” mutual funds, start asking questions, said Linda Stern in Reuters.com. As “a catch-all category,” alternative funds can be slippery, and can refer to everything from “real estate partnerships to mutual funds that mimic hedge funds.” If your planner recommends one, it’s important to get a few things straight before buying in. First, ask why. Is investing in alternatives meant to “calm your portfolio during bad times or to add extra income?” Then ask how, as in “How will the fund accomplish its stated goal?” Next, “find out who the manager is and what she or he did before.” Were they a hedge fund manager? How did they do in 2008 and 2009? And lastly, check the cost. Alternative funds can be pricey, and since some advisers earn commissions for selling certain products, it’s “worth asking how much more you’ll get for your money.”
How much life insurance is enough?
Plenty of people struggle with deciding how much life insurance to buy, said Leslie Scism in WSJ.com. Unfortunately, that means many are “underinsured or have no insurance at all.” As a rule of thumb, you should aim to buy “eight to 10 times the breadwinner’s annual income.” And don’t rely solely on a life insurance policy provided through an employer. “Most private-sector workers’ employer-sponsored policies pay just a year’s worth of paychecks,” according to a 2013 Labor Department survey. If that’s not enough coverage—and it probably isn’t—you can shop around for a basic term-life insurance plan at sites like Term4Sale. A healthy, nonsmoking 40-year-old man can get a $1 million policy for as little as $600 a year.
Be careful combining finances
It’s important to be aware of the potential money pitfalls of walking down the aisle, said Christine DiGangi in Credit.com. Combining finances after getting married might mean combining debt, which “may limit your financial future together,” especially when it comes to buying big-ticket items like a house or a car. Taxes can be tricky, too, and new couples should check out marriage penalty calculators online to determine whether they’ll be better off filing jointly or separately. Lastly, there’s property. Know your local law, given that nine so-called community property states say any property acquired during the marriage is owned jointly by the spouses. For couples trying to keep things separate, it’s critical to know the rules before tying the knot.
How to qualify for in-state tuition
Figuring out how to pay in-state college tuition for an out-of-state student “is the ultimate money hack,” said Ron Lieber in The New York Times. At desirable state universities in Michigan and Colorado, the difference between in-state and out-of-state tuition now approaches $100,000 per undergraduate degree. And with more stringent residency requirements being established to prevent people from gaming the system, it can be difficult for students to claim a new state as their home. Generally, “it takes a year and requires a child to become financially independent to varying degrees.” A new startup called In-State Angels is aiming to help students navigate the process, which varies widely by state. The company’s assistance is legal but costly: “Once the company succeeds, it asks for roughly 10 to 15 percent of the ultimate savings as a fee.”
Tax refunds could be delayed
If you’re expecting a tax refund next year, you may have to wait, said Laura Saunders in The Wall Street Journal. Internal Revenue Service Commissioner John Koskinen suggested last week that next year’s tax season could be the most complicated ever for the IRS, thanks to dozens of expired tax provisions that Congress has yet to act upon. In years past, “late action by Congress on such provisions created problems” and sometimes delays. Among the expired provisions are “a deduction for state and local sales taxes; a tax exemption for the forgiveness of mortgage debt; a tuition deduction; [and] an enhanced break for transit commuters.” New laws that took effect this year, including the Affordable Care Act, are also expected to make the IRS’s job harder. Congress is not expected to address the expired provisions until after the midterms.
Mortgage rates keep falling
Now may be the time to refinance your mortgage, said Marcy Gordon in the Associated Press. Mortgage rates have fallen for five straight weeks, with the nationwide average for a 30-year mortgage falling to 3.92 percent, the lowest level since June 2013. The average rate for a 15-year mortgage fell to just 3.08 percent. Many lenders and borrowers had assumed that mortgage rates “would soon start rising closer to a two-decade average of 6 percent,” but volatility in the markets has compelled investors to move into bonds for safety. That has pushed up prices of U.S. Treasuries and suppressed their yields, which likewise keeps mortgage rates low. Consumers who refinance won’t save much on the extra fees, known as points, that they have to pay to lock in the lower rate. Average fees for 30- and 15-year mortgages have stayed flat at 0.5 point.
Therapy goes high tech
A new startup its taking talk therapy to the Web, said Ann Carrns in The New York Times. Instead of “buying a self-help book and paying $100 or more for an hour of inperson therapy,” a slew of new sites and mobile apps is offering “online therapy” to help clients get help. One new service, Lantern, charges users $49 a month or $300 a year to connect clients with licensed therapists, “initially by telephone and then via secure electronic messaging.” For now, Lantern is aimed at helping subscribers with anxiety, but “programs for other concerns like sleeping and relationship problems are expected to be added later.”
A strategy for shorter hours
There's no need to pull all-nighters, said Sue Shellenbarger in The \¥Iall Street journal. If you're good at your job, don't think you have to burn the midnight oil until your boss leaves the office. Instead, learn "to go home withour looking like a slacker." Good bosses want to be sure "their subordinates are meeting deadlines, that they can be reached when needed, and that they aren't creating extra work for colleagues." That doesn't have to mean working late. You may want to sit down with your boss to clarify that, bur come with specific examples of your great performance. It may not work: Some corporate cultures insist on long hours. Either way, "such conversations can open a dialogu~r expose a brick wall." If it's the laner, you might want to start sending out resumes.
How to avoid a tax audit
"Do you ever wonder how the IRS chooses which taxpayers it wants to audit?" asked Daryl Paranada in Fool.com. While individual tax audits are rare, mistakes on your tax return-such as putting down the wrong Social Security Number or fudging >- your math-are one way to "give the IRS ~ pause." Another is incomplete or missing information. If you're itemizing your deductions, don't "overstate your deductions or lie abour them. The IRS is well aware of what is outside the norm for people at your income level." And "if you do pull a fast one on the IRS, think twice before you bragabom it." The agency offers whisdeblowers a reward of up to 30 percent of the money it collects from tax evaders.
Tracking your FICO score
Learning your credit score just got easier, said Ann Carrns in The New York Times. Several credit-card issuers are now "providing cerrain types of free FICO credit scores to cardholders, both as an enticement to get you to open an account and as a way to educate you about what goes into your credit scorc." Discover, First Bankcard, and Barclaycard are among the first card issuers to provide free, regular credit scores to customers, bur "details of the card programs and the scores they offer vary." While these lenders all use FICO's commercial formula, they "may use slightly different data" to arrive at their scores. Nonetheless, "the free scorcs from the credit-card companies are likely to reflect the general trend of your credit profile," giving you a good idea of where you stand.
Saving on back-to-school purchases
Back-to-school shopping isn’t the “frenzied one-day spending spree” it used to be, said Kaitlyn Krasselt in USA Today. Families are expected to spend an average of $670 on school supplies, clothes, and electronics this year, but more parents “are shopping strategically online and picking up additional in-store items when necessary,” spreading out their purchases over time. For the essentials, experts say the best way to save is to avoid brick-and-mortar stores altogether and wait for Labor Day sales. In the meantime, late July and early August can be a great time to cash in on deals for classroom supplies, while big-ticket items like laptops are likely to go on sale in August, “when 62 percent of all 2013 laptop deals occurred.”
The risks of medical credit cards
Don’t let plastic you can use at the doctor’s office put your finances in critical condition, said Crissinda Ponder in Bankrate.com. For uninsured Americans with steep medical bills, medical credit cards may appear to be an attractive financing option for their health expenses. The cards, which can be used only for medical costs, are similar to ordinary credit cards, with minimum monthly payments, reporting to credit bureaus, and attractive signup offers. But experts say the cards should only be used as a “last resort,” because “the interest rate can be shockingly high.” Consumers should instead try to negotiate with their health-care provider to reduce their medical bills or seek financial assistance at a nonprofit hospital. If those avenues fail, it’s probably best to rely on regular plastic.
Don’t go broke on a gluten-free diet
A gluten-free diet doesn’t have to break the bank, said Gerri Detweiler in Credit.com. Though eliminating cheap wheat-based staples like bread and pasta can drive up your grocery bill, there are simple strategies to make a gluten-free lifestyle more affordable. First, “stop wasting food.” The average household already wastes about $2,300 in food each year. To reduce waste, buy salad greens on the stem, not pre-chopped, and store them in plastic bags with as little air as possible. Next, avoid gluten-free branded snacks, which are not necessarily healthy and are often overpriced. Finally, “make the freezer your friend.” Frozen vegetables can cost half the price of fresh ones, and buying meats when they’re on sale, and freezing them for later, can save you big bucks.
Saying no to LinkedIn requests
Don’t say yes to every LinkedIn request, said Quentin Fottrell in MarketWatch.com. While “Facebook may have stretched the definition of ‘friend’ to include even your second cousin’s chiropractor,” be more selective when it comes to professional networking sites like LinkedIn. The site itself suggests “that connections should be limited to people one has actual connections to,” and experts say “other users of the site may judge you by the number and quality of your connections” because they “are seen as an endorsement and reflect on your professional reputation.” That means you should check out “would-be connections” to make sure their digital trail won’t reflect poorly on you. Avoid connecting with rival companies, and beware of LinkedIn spammers who collect connections to mine your data.
Get a handle on money anxiety
To tame financial stress, take a few sensible steps, said Sharon Epperson in CNBC.com. The levels of household debt many Americans carry, ranging from college loans to credit card debt to large mortgages, can lead to constant financial anxiety. But there are three guiding principles that can help reduce your money worries. First and foremost, “don’t spend money that you don’t have.” It’s the only way to keep even more debt from piling up. When you do decide to splurge, “buy experiences, not things.” Studies say spending money on vacations or restaurant dinners can often be more satisfying than material things, whose appeal quickly dwindles. Finally, do your best to sock away something each month, ideally 10 percent of whatever you earn. “Sticking to this principle early can make a great impact in overcoming financial stress.”