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Published: Wednesday, December 06, 2017 @ 3:21 PM
When you’re struggling to get ahead, the idea of getting control of your money — and having confidence in your financial decision-making — can be pretty intimidating.
It may even seem impossible — especially if you’ve never learned much, if anything, about personal finance. Were talking budgeting, saving, handling credit cards, paying off debt, money mistakes to avoid (the list goes on and on…).
I’m not going tell you that getting on top of your finances is easy.
Taking control of your budget requires determination, desire and a good bit of flexibility — and there will be setbacks.
But here’s the good news: It IS possible!
Changing your life and getting on the path to financial freedom ultimately makes every single step along the way totally worth it.
With a solid timeline and a list of goals to achieve, you may find that you’re capable of being much more disciplined that you thought!
The idea is to challenge yourself — make it a priority to focus on taking specific steps over the next few weeks to get your money back on track. The hardest part is just deciding to do it, because once you start making changes, you’ll become more motivated and more empowered with every new step you take.
It all starts with changing your mindset.
Getting control of your money is not about taking things away — it’s about adding freedoms to your life — both now and down the road.
A lot of people ignore their financial problems, or their finances in general, because they know they can’t afford to fix everything at once — or they simply just don’t know where to start.
So instead of trying to change everything all at once, start with small steps — small changes and milestones that will get you, and keep you, on the right track.
Making just a few smarter decisions each day can have a big impact on your future, because each step you take will give you more motivation to keep going. And it won’t take long for you to begin to see how all of those small steps are adding up to big progress!
To help you get started, we’ve rounded up a list of some easy things you can do each day to get your financial life back on track! So print this out and start checking items off the list — and before you know it, you’ll have a whole new outlook on not just your money, but your life!
When you know what you’re working toward, budgeting, saving and making changes to your lifestyle become a whole lot easier.
A lot of people don’t realize they can lower their existing monthly bills just by doing a little negotiating. Many people can even get their credit card interest rate lowered — just by asking!
Log on to your 401(k) or other retirement account online and increase the amount you’re contributing each year. A boost of just 1% is probably small enough that you won’t even notice the money gone when you get your next paycheck. And even just an extra 1% can add up to a lot of extra savings over time!
If you can’t do it online, make a note to call your plan provider tomorrow!
The best way to start saving more money is to make it automatic. By giving every dollar a purpose, you can avoid reaching the end of the month and having no clue where all your money went — including the money you intended to save.
Figure out how much money you can realistically save each month, after covering all your bills and other expenses, and then set up your direct deposit to have that amount sent directly to savings. That way you won’t be tempted to spend it, and if you absolutely need the money, you can access it pretty easily.
RELATED: How to maximize your savings
Many people don’t check their credit reports because they either don’t realize it’s a big deal or they don’t want to face what’s in it. Bad idea! The only way to improve your financial life is to know what’s going with it, so you can take steps to get back on track. Here’s why:
2. Old bills you never knew about or forgot about
At AnnualCreditReport.com , you can get a free copy of each of your credit reports once each year. In just a couple minutes, you can see everything that’s going on with your credit. But you can only do this once a year, because doing so more than once per year will ding your credit and cause your score to drop.
You can also monitor your credit for free with a service called Credit Karma, which pulls in your information and gives you a good idea of what’s going on with all your finances and anything that impacts your credit.
The average U.S. household is carrying more than $15,000 in credit card debt, according to a study by NerdWallet. And as that debt rolls over each month, the total amount owed continues to increase — sometimes by quite a lot each month — depending on the credit card’s interest rate.
Think about your situation: do you have any credit card debt or student loans hanging over your head? Those debt obligations can be big obstacles keeping you from reaching your financial goals. So the quicker you get it paid off, the quicker you will be able to truly start building wealth.
One thing you can do today is make just one extra payment toward a debt. While you may not be able to pay off the entire balance today, every little bit helps. Skip a splurge this week and use that money to pay extra toward your credit card bill or student loan debt. Put the extra money toward whichever debt has the highest interest rate — as that’s the debt that will end up costing you more money over time (the longer it sits there accruing interest, the more you’ll owe).
Paying an extra $100 toward debt, instead of wasting it on something you don’t need, will be more beneficial to your long-term financial goals by allowing you to become debt free sooner in life. Plus, the more you start to pay down debt, the quicker you’ll see the light at the end of the tunnel of getting it paid off.
If you have a big credit card bill that’s slamming you with high interest fees every month, transferring the balance could save you hundreds of dollars. By allowing you to transfer the debt to a credit card with 0% APR (annual percentage rate) for a certain number of months, these types of offers can help you pay off your debt in a timely manner — without having to pay interest.
So if you have a credit card with a high interest rate, check out this list of great balance transfer options.
Once you transfer the debt, your payments will go a lot further without the high interest — which will cost you less money in the long run and also allow you to get it paid off quicker.
Unclaimed money from bank accounts, insurance policies, rental and utility deposits, safe deposit boxes and other places could be hanging out there somewhere in your name. All you need to know is how to check and collect it without paying any fees.
It’s particularly easy if you have a unique last name. Simply go to MissingMoney.com and punch in your name to do a database search of available unclaimed funds across all states. With one click of your mouse, you can cover the entire spectrum of what’s available.
Please note that not every single state participates. If you live in a state that doesn’t participate with this free site, there’s one more option for you: Unclaimed.org. This website is a clearinghouse for the National Association of Unclaimed Property Administrators.
Also, if you ever had an FHA home loan, HUD may be sitting on refund money for you. Go to HUD.gov and see if you’re in their refund database.
Many people don’t realize that a big chunk —often the majority — of their monthly payments are probably going toward interest, depending on the interest rate and other factors (we’ll get to that). So even by paying hundreds of dollars each month, you may not even be making a dent in the total cost of your debt.
Student loan refinancing can be a great way to reduce your payments and decrease the total cost of your debt — while shrinking the time it takes to get it all paid off.
It may be a pain, but taking a few minutes to sit down and shop around can end up saving you big bucks! Here’s where to look and how to start shopping for a better deal.
By making some basic tweaks around the house – like replacing your light bulbs – you can save a ton of money on your monthly bills! Here are 10 ways to get started.
For anything you buy today, find a coupon, a promo code or maybe an alternative option — whatever you do, just don’t pay full price! Once you start to realize all the different ways you save on things, you’ll rarely have to pay full price!
If you don’t check your statements daily, there could be fraudulent charges on your account without you even realizing it. Plus, it’s a good way to keep an eye on your spending and recognize any expenses you can cut!
The easier your passwords are to hack, the easier it is for criminals to get their hands on your personal information — including your bank account. Each little piece of information that a scammer has about you can help them get access to your accounts.
A recent survey found that most people are paying about twice as much as they have to each month for cell phone service. Why? Because they don’t make the effort to look for a cheaper plan.
You may be able to get the exact same place, or at least pretty close, for less money. Check out our guide to the best cell phone plans and deals here .
There are some great apps available that now allow you to start investing with just a few bucks! Here’s a list of some of the best ones to consider.
If you aren’t giving every dollar a purpose, you are very likely wasting a lot more money than you realize.
Creating a budget will help you keep your spending on track. If you already have one, then take a good hard look at each area of spending and see if there are any categories where you can cut costs, which will free up more money for savings.
Check out our step-by-step guide on creating a budget that works for you.
Making a mental note is not an efficient way to track your spending. If you want to actually stick to a budget, you need to track every dollar that comes in and every dollar that goes out.
And it can be a lot easier than it sounds. In fact, there are tons of apps that will do it for you. You can even get updates on your progress throughout the month — like if you get close to going over budget or get closer to paying off a debt!
There are so many fees out there these days, there’s likely at least one in your life that you can eliminate.
Investment fees: Do you know what you’re paying in investment fees? If you don’t, you need to find out — because a difference of just 1% can save you (or cost you) up to tens of thousands of dollars over time — maybe even more. Here’s a look at some low-cost investment options.
Checking account fees: How much are you paying in fees for your checking account? If it adds up to more than $0, consider these cheaper alternatives.
ATM fees: Do a quick search online or check your online bank account to find the nearest fee-free ATM in your area.
I take a list with me every time I go to the store — because if I don’t, I’ll forget the things I need and end up with a basket full of all the random things the grocery stores tempt you with throughout the whole place.
If you have a list, it’s a lot easier to avoid spending extra money. And these apps make it easy for you.
According to a recent survey, more than 40% of Americans either experienced a major unexpected expense over the past 12 months or had an immediate family member who did. And if you aren’t ready for it, you could be facing major financial damage for years over just one bill.
But there’s one very easy solution that will minimize any potential damage — prepare for it!
The best way to save for unexpected financial shocks is to have two separate emergency funds: a rainy day fund and a bigger emergency fund.
If you’re starting from scratch, these goals may seem impossible — but you can get there! At the very least, start by saving $1 a day — and then increase that amount as you can.
The best way to approach saving is to start with baby steps and then build up from there. Here’s a step-by-step guide on how to get started.
If you buy everything at the same store, chances are you’re paying way more than you have to on groceries.
You can save more than 30% simply by changing your routine. Check out non-traditional grocery stores like warehouse clubs, dollar stores, Aldi and Walmart for big savings on food and other items you frequently buy at the grocery store (at a higher price).
There are so many ways for pretty much anyone to make extra cash — whether it’s online or in your area.
Check out this list of 35 easy ways to make cash on the side.
When it comes to monthly bills and companies you do business with, more often than not, you can negotiate a better — and cheaper — deal. The problem is most people don’t even ask, so they continue paying for something they could very likely get for less.
According to a survey by CreditCards.com, nearly 90% of U.S. credit card holders who asked to have a late fee waived had their request granted. On top of that, 78% of those who asked for an interest rate reduction were successful in getting that request granted.
Bottom line: There’s no harm in asking! So make the call and see what you can get!
Look for recurring costs that you don’t need or use and cancel them immediately. It’s easy to overlook small charges each month, but over time, they could be costing you a big chunk of cash.
Also look for little expenses you can cut out or reduce — coffee, online shopping etc.
Organizing your home can help relieve stress and get you into a better overall routine. Go through your clothes, electronics, old books and other items that you no longer use or need, and then sell what you can and donate the rest.
You may have built up some rewards without even realizing it! From cash back to airline miles, check your credit card rewards to see if there are any savings opportunities you can take advantage of.
If you’re having a hard time controlling your spending, try using cash. Split up your paycheck for each area of the budget and put the cash in separate envelopes. That will force you to budget based on the amount of cash you have left, rather than just swiping a card and continuing to overspend.
Important note: Once you budget out what you need for the month (or two weeks, depending on how you split up your paychecks), figure out how much extra money you have left to save. Then set up your direct deposit to send that amount directly into savings before it shows up in your account — if you don’t see it, you can’t spend it!
Take a week and plan out your meals and anything else you may need. Then put the cards, cash, mobile wallet and any other spending mechanism away — and don’t spend a penny for a full week. You may be surprised by all the little things you’re used to buying that you don’t really need!
There are tons of free apps out there that can save you money — apps that offer instant deals and coupons for grocery stores and drugstores, and even some that actually pay you cash back just for shopping (to help you save, not spend more!).
There are so many things you’ve become accustomed to paying for that you can actually get much cheaper or even free!
A few examples: Garden supplies, books, online courses, health care freebies and more. See the full list of easy ways to valuable things for free.
If you want to get your money in order — both for the short-term and the long-term — take a look at all of your monthly subscriptions and figure out which ones you don’t really need. Cut at least one. Then next week or next month, cut another one. After a few months, you’ll start to see the difference in your accounts, allowing you to save more and develop better budgeting habits over time.
Here are a few examples of subscriptions you may be able to live without:
Here’s a 12-week savings challenge that will leave you with an extra $1,000 in your pocket by the end!
We recently asked our fans on Facebook about the most extreme or unique thing they’ve ever done to save money. And while some of the responses were even a little too extreme for us, there were plenty of great ideas! For example, any time you get a $5 bill in change, put it away in a savings jar until the end of the year — or some other specific date you set for yourself, when you can use the money to pay off a bill or put toward a vacation.
From party supplies, clothing and socks, to cleaning supplies and household products. The dollar stores can save you big bucks on a variety of things you buy all the time! Here are a few examples:
According to a recent survey, among households with annual incomes of $75,000 or more, one-third live paycheck to paycheck, and 44% said lifestyle purchases, such as dining out and entertainment, were big hindrances to saving. Among millennials bringing home $75,000 or more, 71% confessed these expenses were stealing their savings.
Get into the habit of cooking at home more. The more you do it, the more you’ll save. Plus, a recent study found that eating at home will help you lose weight, too.
Getting a will in place is one of the most crucial aspects of financial planning, but for whatever reason, most people don’t do it.
A new study found that 58% of adults say they don’t have a will in place. On top of that, 64% of parents with kids under the age of 18 have no formal estate plan at all.
If you don’t have children and have very little in the way of assets, that may be OK for you. But in pretty much any other situation, having a will is critical.
If you have children, you need a will for the simple fact that if you don’t have one, the state would decide who raises your kids if something were to happen to you. If there’s no document with written directive from you, that’s just how it goes.
If you don’t have kids but you are married — and don’t have a will in place — the state would decide how your money is allocated if something were to happen to you.
The same holds true if you and a partner are living together and aren’t married. In many cases, your partner will not be considered to inherit your estate unless you put it in writing.
Automatic bill-pay can catch you off guard if you’re still trying to get control of your monthly budget. But you definitely do not want to ever pay a bill late — as late payments have a significant impact on your credit.
So to avoid overdrafting your accounts, just set reminders for yourself on your phone, tablet, calendar or wherever, for when each of your bills are due. And when that reminder pops up, pay the bill immediately so you don’t forget! If you tend to be forgetful or a little unorganized, check out these 6 tips to help you keep your money on track.
Criminals are finding new ways to con people out of money every day, and they’re using our everyday activities to try to catch us off guard — including social media, text messages, emails, phone calls and pretty much every other method of communication.
Any time you log in to any online account, whether it’s Amazon, your bank account or some other site that stores your personal information, criminals could be watching without you even realizing it. And any piece of information they can pick up about you could help give them access to what they’re really after — your money.
So it’s important to text extra steps to protect your information online and the information you access on your devices — and many sites now offer two-factor authentication to add in another layer of security.
Two-factor authentication (sometimes called two-step authentication) requires you to take an extra step to authenticate who you are when you sign in or when you are doing a transaction. It’s sometimes also referred to as two-step authentication.
The extra step just depends on the company or website, so it could be a unique code that’s texted to your cell phone or a unique password you have to give when authorizing anything over the phone. Whatever the extra step is, opt in for it! It’s another layer off security for you and your money! Here’s more on how it works and how to set it up.
By investing a little extra money now on certain things, you can reduce a lot of extra expenses in your life — and save yourself some serious cash down the road.
Published: Thursday, April 05, 2018 @ 11:46 PM
Updated: Thursday, April 05, 2018 @ 11:46 PM
— We get it. Doing your taxes is no fun, especially if you know you’re going to owe money. But as with any project on which you procrastinate, leaving everything to the last minute can lead to errors, both large and small, and some of those errors could cost you serious money.
If you’ve gone and done it, though, and are still looking at that pile of tax forms over there in the corner, we’ve compiled a list of six quick-and-dirty tips that could keep you from making some obvious, and not-so-obvious, mistakes when you finally sit down and tackle the task. They could also help you maximize your tax refund.
You might wonder how anyone could forget to sign their tax form, but this simple process is one of the most common tax mistakes, according to the IRS. Just like forgetting to sign a check or a contract, it means your return isn’t valid. Usually, there isn’t a penalty or interest associated with this error (since you’ve already included a check or electronic payment if you owed), so the IRS will just send a notice asking for a valid signature, but it will delay the processing of your return. If you’re getting a refund, that too will be delayed.
So check, double-check — heck, triple-check — that you signed or completed the e-signature process before filing your return. Also, check out these last-minute filing tips from the IRS.
Math errors are also a very common mistake made by folks in a hurry. Fortunately for most people, the IRS corrects any miscalculations, so there’s no need for filing an amended return. But these mistakes can mean the difference between you thinking you’re getting a refund and the reality that you actually owe taxes, so be sure to check your calculations carefully.
One way to help you avoid math errors is to file electronically so the calculations are done for you. Bye-bye, No. 2 pencil! So long, calculator!
Did you have a side hustle early last year? A freelance design gig for a friend’s business? If so, you’re going to need to account for it, regardless of whether you received a W-2 or 1099 from whomever paid you. That’s because, while there’s an IRS threshold for filing these documents by employers, there’s no similar threshold for claiming the income. Income is income is income. If you made money and don’t report it — and the IRS catches it — it’s going to cost you penalties and interest at best, and open you to a possible audit at worst.
It’s easy to forget these things when you’re in a hurry, but they can end up saving you some serious money and are well worth the extra time to figure out if you qualify. So if you’re just claiming the standard deductions because you’re under the gun, you might want to take a deep breath and check out TurboTax’s list of 10 commonly overlooked tax deductions that can keep you from overpaying the tax man.
Filing for an extension is a great idea if you’re down to the wire and don’t really understand your tax situation. But remember that an extension gives you an extra six months to file your paperwork, but not an extra six months to pay any taxes due. So, if you’re confused, tax pros recommend doing a quick calculation of your taxes, filing for your extension and making any required payment of taxes you think you owe. This will help you avoid penalties and interest once you get your final calculations together.
You gave up. You shoved, slammed and jammed your return through and now it’s full of mistakes that are going to cost you money by way of penalties or because you’ve left money on the table. It’s a much better idea to file the extension, then get the help you need from a tax professional to ensure you’re not overpaying your taxes.
Published: Thursday, April 05, 2018 @ 11:55 PM
Updated: Thursday, April 05, 2018 @ 11:55 PM
— If you claimed the right number of dependents and standard deductions on your 2017 federal income tax return and you still ended up owing the IRS, you’re probably looking to avoid a repeat performance next year. Luckily, there are several ways to increase your chance for a refund (or at least reduce the amount you’ll owe) and you don’t have to be a tax whiz or accountant to take advantage.
Here are 11 ways you can pay less in federal taxes for your income return next year.
Contributing to a retirement fund is an important way to ensure financial independence in your golden years, but it can also convey short-term tax benefits. In most cases, the contributions you make to your 401K and IRA plans are tax-deductible and are not included in your taxable income at the end of the year. (Note: If you didn’t contribute to an IRA in 2017, you still have time. You have until April 17 to contribute up to the maximum amount and shave off a good chunk of your tax bill. Filed your taxes already? That’s OK. You can file an amended return to reflect the contribution.)
There’s a distinct tax benefit to home ownership. The interest you pay on your mortgage is tax-deductible, and the interest is front-loaded. For the first several years, most of your mortgage payment goes toward interest, which will drastically reduce your adjusted gross income at tax time. Want an extra boost for your taxes next year? Consider paying January 2019’s mortgage payment in December to get a tax benefit before the end of the year.
You probably know charitable donations can be itemized and deducted from your income, so you’ll want to save receipts anytime you donate cash or items to charity. You can even deduct miles you travel for volunteering or other charity work.
“Miles you travel on behalf of a charity are deductible at 14 cents per mile for 2018,” said Gail Rosen, CPA.
Starting a home business can provide you with a new source of income and allow you to take deductions off any income the business generates.
These deductions include business costs you incur throughout the year, a portion of your mortgage and utilities if you use a home office and the cost of goods needed to keep your business running. You can even deduct startup costs.
“Any expenses that are incurred before the first sale are ‘start-up costs,’” Rosen said. “These costs cannot be deducted until the first sale. Then they are deducted over 15 years and you can deduct the first $5,000 in the first year.”
If you hunt for a new job in your field this year, you can write off some qualifying expenses as you search. There are exceptions, but potential write-offs include things like clothes or travel.
“If you looked for a new job in 2018, you should be aware of the income tax deduction that may be available with respect to job-search costs,” Rosen said. “Qualifying expenses are deductible even if they do not result in a new job being offered or accepted.”
Many employers offer flexible spending plans that let you contribute toward yearly medical expenses pre-tax. These contributions typically don’t count toward your taxable income.
Many medical and dental expenses are tax-deductible. According to Rosen, the cost of getting to and from medical treatment is deductible at 17 cents per mile, plus the cost of tolls and parking, and dependent expenses are also deductible.
“If you cover the medical cost of dependents, these can be deducted. Additionally, if you are covering the costs of an individual who would qualify as your dependent except that they have too much gross income — for example, an elderly parent — you may be able to deduct these costs as well,” said Rosen.
Current and former students have many eligible deductions and credits related to their education expenses. Paid student loan interest and tuition and fees can be claimed as deductions. Eligible current students can also access the American Opportunity Credit, which can cover up to $2,500 annually for four years, and the Lifetime Learning Credit, which can cover up to $2,000 per tax return.
Homeowners who install solar energy systems in their home can get back tax credits at up to 30% of the cost of installation. This credit will begin to decrease after 2019 so you may want to act soon if you’re planning on installing solar panels.
As an added bonus, solar energy can significantly reduce your energy bills.
We’ve named several tax credits above, but there are more, including credits for adopting children, the cost of child care and low-income households. Tax credits are more valuable than deductions, as they reduce your taxable income on a dollar-for-dollar basis, so make sure you’re taking advantage of every option.
Published: Monday, October 23, 2017 @ 11:27 AM
— Retirement can seem like a difficult goal to reach, so the thought of achieving it early may seem downright impossible.
But getting to retirement quicker doesn't require genius-level investing knowledge or extreme deprivation. With a plan, hard work and discipline, you may be able to get there sooner rather than later.
The following are five surefire ways to get to retirement quicker:
Set clear goals for yourself
Consumer adviser Clark Howard recently shared advice from Chris Reining, who decided in his late 20s that he wanted to retire early. By the time he turned 37, he was able to reach this goal.
Howard said he thought setting clear goals was one of the most important things that Reining did. He labeled his investment account "Retire early" so he could see the words every day. In addition, Reining tracked his progress by using a spreadsheet you can get on his website. He wanted to save up 25 times his annual expenses before retiring.
The Forbes Finance Council recommends working hard and being disciplined as the most reliable ways to retire early.
This can be achieved through a high-paying job combined with saving as much of your income as possible. Another path is starting your own business.
Forbes quotes a blogger who retired early and says that streamlining your spending is an important step toward achieving this goal. It's not glamorous or complicated, but it works.
He suggests scaling back on luxuries and investing your savings in a low-cost index fund. When you accumulate 25 to 30 times your annual spending in this type of account, you can quit working for the rest of your life.
Cut your housing expenses
If you're like most people, your home is your biggest expense, so it's also your biggest opportunity to save, according to Money.
Housing costs take up about a third of the average budget, so Money recommends not taking out the biggest mortgage you can get. Live in a more modest-sized home when possible, and in some cases, homeowners can purchase a two-family home, living in one side and renting out the other.
Put your money to work - wisely
CNBC talked to Scott Alan Turner, who had more than $70,000 in debt at age 25, yet managed to turn things around and retire by age 44.
Published: Thursday, February 22, 2018 @ 6:13 PM
— ‘Tis the season for taxpayers to get a nice chunk of change back from the IRS.
It’s tempting to spend it all, but financial experts say there are steps you should take to shore up your financial future.
Some who usually pay off debt will splurge this year.
“I’m going to Japan in April so I’m actually going to add that to my travel fund, so I’m really excited about it,” said Olivia Morris from Centerville.
Those who used to spend their return?
“I just plan to save it. We are about to start a family, so I plan on saving it for the baby,” said Toska Ivory of Dayton.
It’s important to have a plan for tax return funds or any financial windfall, said Lisa Roberts, Graceworks certified housing and credit counselor.
Pay urgent bills first then save.
“If it’s something that is urgent -- a bill that’s going to be a roof over your head, utilities, pay them,” said Roberts, “after that you definitely want to put it into savings.”
WalletHub has these additional tax refund spending recommendations:
As for splurging?