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Money (Finance)

Money (Finance):   Budgeting |  Credit Report |  FICO Score |  How to Get Out of Debt |  Identity Theft |  Investing |  Manage Your Money |  Missing Money |  Retirement |  Stocks |  Student Aid |  Student Loan |  Taxes |  Main Menu
Money To-Do's
  • Pay bills
  • Balance checkbook.   See the Home Budgeting Worksheet
  • Get Out of Debt.  Live below your means and save for the future.  Many people who appear to be at the top of their game are often drowning in debt.  Be very careful.  Question everything.  Many of the most subtle and most costly mistakes you can make are those involving the financial industry.  Be very suspicious when companies appear to be selling you something that is in "your best interest".  Usually, it is primarily in their best interest.  The land of the free does not mean the land of the fair.
  • Review bank statement and transaction history for problems.   Many banks only give you 60 days to notify them about errors.   Check for duplicate charges, charges you did not make, and missing deposits.   It is normally much easier and much faster to work directly with the vendor on disputed charges or billing errors.   If you file a disputed charge with your credit card provider, this will appear on your credit report.
  • Create your Household (monthly), Retirement, and Children's College budget.
  • Check account balance to make sure not overdrawn
  • Convert all bills to auto-pay (and keep accidental slow pays from hurting your credit (FICO) score.
  • Invest in your company's 401 K plan each year and take advantage of your company's matching program.
  • Invest $5K in a Roth IRA or an IRA each year and save on taxes.
  • Buy/sell stocks, municipal bonds, treasury bonds, etc.
  • College fund contribution (529 plan)
  • Stop at ATM to get cash
  • Receipts: which to keep?
  • Update your will
  • Keep important documents (titles, bonds, passports, ...) and digital backups (CD's, DVD's) in a safety deposit box. Periodically add new important documents to your box.
  • Shred old documents
  • Cancel old memberships
  • Cancel old credit cards
  • Redeem your credit or debit card rewards
  • Check with your insurance agents to find out about available discounts
  • Clean out purse, wallet, and briefcase
  • Keep track of certificate of deposit maturity dates
  • Order more checks
  • Check your credit report.  Also use credit report info. to cancel old credit cards.
  • Refinance your home mortgage
  • Plan for retirement
  • Utilize your company's benefits
Health Savings Account - Saves Money How to Get Out of Debt
  • For more information, see Oprah's Debt Diet Action Plan
  • 70% of Americans are living paycheck to paycheck.  Money problems are the number one cause of divorce in America.  The average car payment in America is over $450 per month.  25% of Americans have a negative net worth.
  • Getting out of debt starts with having the courage to stop ignoring the problem and follow these steps:
    1. Accurately calculate your debt and how long it will take to repay it.
    2. Track your spending and find extra money to pay down debt.
    3. Manage credit cards. Avoid high interest rates and late fees.  Paying double the minimum credit card payment will repay that debt 10 times faster.  Move debt to 0% percent interest cards.  Avoid department store credit cards which start at 20% (twice the annual rate of other cards).  In addition to late fees, many credit card companies will continually increase your interest rate each month that you are late.  Contact your card company and ask the supervisior to reduce your interest rates and fees.  If they won't.  Another card company will likely give you a better deal, with no transfer fees.
    4. Stop spending.  Replace bad spending habits with good habits such as replacing shopping with regular walking.  Before buying any item ask yourself "Can I really afford this?"  The phychology of spending has shown that people will spend 18% less when they use cash rather than a credit or debit card.
    5. Grow your income and raise your credit score.
Money Guidance How to Save Missing Money: How to find your hidden money
FICO Score

Your FICO Score is a 3-digit number (from 300 to 850) that uses your credit history to determine the interest rates that you will pay (and whether you qualify) on credit cards, car loans, and home loans.  The higher your FICO score, the lower your interest rate will be, and vice versa.

FICO ScoreMeaning
above 750excellent
720-750very good
660-720acceptable
620-660uncertain
below 620risky
below 500bad

Your FICO score can even determine the price you will pay for car insurance and if you will be able to rent an apartment or get a particular job.  Unpaid bills can affect your FICO score for 7 years.  Bankruptcy can affect your FICO score for 10 years.  Check your mail and make sure that bills are paid in a timely manner (or convert all of your bills to auto-pay) to avoid letting a "slow pay" lower your credit score.

Set up an account at www.CreditKarma.com where you can monitor your FICO score and credit reports, forever for free.

Credit Freeze (Security Freeze) protection against Identity Theft
  • Click the link at the top of www.equifaxsecurity2017.com to determine if your information was hacked during the Equifax breach.
  • Rather than signing up for the 1 year of Equifax monitoring (that actually removes your right to sue), instead, set up a free account at www.CreditKarma.com where you can monitor your credit forever for free.   If you have everything frozen, you may need to temporarily unfreeze your TransUnion credit report in order to activate your CreditKarma account registration, then you can re-freeze it.
  • A credit freeze (security freeze) is your BEST protection against possible tragic losses from indentity theft.   The following three articles discuss this: Article 1, Article 2, and Article 3.
  • You will NEED to freeze your credit at all 3 credit reporting agencies (Experian, Equifax, and TransUnion).   It is also possible to do a security freeze for Innovis and ChexSystems.
  • A credit freeze lasts for 7 years.   Remember that if you freeze your credit and apply for a NEW credit card or loans or change your Auto/Home insurance company, you will need to thaw and then re-freeze your credit to accomplish that.
  • See also Protect yourself from a thief using a fake tax return to steal your return
Credit Report

This is an hour well spent and can protect you from identity theft.  Get your free credit report from all 3 credit reporting agencies (Experian, Equifax, and TransUnion) by going to www.annualcreditreport.com.  This site was specifically recommended by CNN.  You are not required to be on mailing lists or receive advertisements to get your report.  Your credit reports will be free, a credit score is extra.   I think the report is enough.  This will take from 30 minutes to an hour.  It helps to have a printer or alternatively you can save the file to a pdf.  It also helps to have a few account numbers handly from major loans for verification.  You can get a 1 free credit report from all 3 agencies each year.  To more closely monitor your credit, I recommend that you get one from each agency every 4 months.  Set a calendar appointment in your phone for 4 months from now with a 1 week reminder to remember to do the next report.

Avoid Health Care Costs
  • Take good care of your health, stay insured, and utilize in-network providers and hospitals to reduce the percentage that you have to pay and ensure that the provider(s) and hospital(s) are under contract regarding how much they can charge for various services.
  • Know your local in-network hospitals at home and when you travel.  A 12-hour hospital stay with a minor procedure can cost you $3000 for in-network hospital, or $30000 for out-of-network hospital.
  • Your current and future physical health may be the single largest factor affecting your future financial health, financial survival, and financial happiness.
Credit and Debit Cards
  • If you are financially responsible, having one credit card and one debit card allows you to maximize your benefits of each type of card.
  • Uses of each
    Card to useCreditDebit
    boost credit history/score
    save by buying online
    rewards and cash back
    history of purchases
    cash back at grocery store
    car rental
    no fear or loss or theft
    insurance on purchases
    automatic foreign exchange
    merchant protection
    reduced income tax and utility company fees
    earn interest on account tied to debit card
    eliminate need to carry cash
  • I recommend setting up auto-pay from your bank to the credit card.
Credit Cards and Pay Day Loans (Be Careful!)
  • In the credit industry, those that can least afford it, pay the most.
  • This industry uses complicated rules, late fees, overdraft fees, and changing interest rates to set traps for people using their services.  Many credit cards even have "universal default" whereby if you are late on one payment on one card, your rates on all of your cards will increase.  Paying just the minimum monthly payment will take over 15 years and more than twice the original cost of the item to complete the payments.
  • Watch FRONTLINE - The Card Game
  • Watch FRONTLINE - Secret History of the Credit Card
Retirement Planning
  • See also Investing, Retirement Savings Calculator and Retirement Budget
  • Take good care of your health, eat right, and protect yourself from major medical expenses and the need for high-cost prescriptions.  Health care is the biggest expense in retirement.  If you lose your health and have to have major hospitalization OR if you are required to pay someone to take care of you, you will likely lose all your savings.  Losing your health could mean losing your independence and losing your ability to go to events.  Losing your health may also mean becoming homebound, becoming dependent on your children to take care of you, or having to be a permanent resident of a nursing home.  Take care of your teeth so you avoid expensive restorative procedures and so you will have attractive teeth.
  • Stay on a successful career path.
  • Invest (save) enough each year to have enough money for your retirement years.
  • Pay off high interest loans, credit cards, and your home mortgage.
  • See also Life Insurance.
  • You can start drawing Social Security anytime between age 62 and 70.  The longer you wait to start receiving Social Security, the greater the amount will be.  The amount will increase by 6% each year from age 62 to 67.  The amount will increase by 8% from age 67 to age 70.  www.ssa.gov, www.socialsecurity.gov, 800-772-1213.  Currently social security and medicare are scheduled to run out of money in 2024.
  • Medicare covers people over 65 and those with disabilities, www.medicare.gov
  • Information about the new Healthcare law, www.HealthCare.gov
  • HowToPlanForRetirement.net
  • AARP, www.aarp.org
Beneficiaries - Transferring your savings to your loved ones
  • Create a safety net for your children absolutely free!   Any estate planning should start with assignment of beneficiaries to your financial and investment accounts.   Beneficiary assignments supersede all other documents (Wills, Trusts, etc...), and any asset that has a valid beneficiary designation should avoid probate completely and transfer directly to the named beneficiares.   Beneficiary assignments can be made at no cost and by simply going online to your financial institutions' websites.   Primary beneficiaries are the person(s) first-in-line to receive your funds when you die.   Contingent beneficiaries are entitled to receive your funds if the primary beneficiaries can't be located or have died.   You can specify exactly which percent of your funds each beneficiary will be entitled to.   Beneficiaries may include children, friends, loved ones, charities, and more.   Your beneficiary assignments and percentages can be adjusted at anytime later if you choose.
  • Use a document like this one to establish your Beneficiary plan and be sure to include:
    • Annuity contracts
    • Individual retirement accounts (IRAs)
    • 401K accounts
    • HSA investment accounts
    • Life insurance policies
      • Basic Life, AD&D
      • Supplemental Life
      • Both personal and employer provided
    • Checking Account
    • Savings Account
    • Certificates of Deposit (CD's)
    • Savings Bonds
  • Since federal estate taxes only impact funds over $5 million, you probabaly won't need to worry about these.
Creating a Will and a Living Revocable Trust
  • Create a Will and a Living Revocable Trust to avoid probate time, cost, and hassel and allow for easy transfer of your properties to your loved ones.
  • Many companies offer group legal plan benefits that can provide an inexpensive way to create these documents.
Mortgage
  • Shop for nearby Banks offering the lowest interest rates on mortgage loans.
Second Mortgage Social Security
  • To determine your Full Retirement Age and monthly benefit, go to www.socialsecurity.gov and create an account. Once you have an account go to www.socialsecurity.gov and log in, then click on "estimate your retirement benefits" to view your statement.
Protect Yourself from Identity Theft
  • Protect your identity.  Limit the personal information that you provide over the phone or internet and only provide it to reputable companies that don't share your information.  Never give your birthdate, social security number, or driver's license number to anyone, any caller, an email request, or any website unless you are 100% positive it is valid and necessary and not a phishing scam.  If a website requests your birthdate and there is no reason they should need that, give your "alternative" (fake) birthdate.
  • Never carry your Social Security Card.  Only carry credit cards that you need and use.  Don't let your laptop get stolen.
  • Use a locked mailbox.  Deposit outgoing mail in a secure blue postal collection box, not in residential outgoing mailboxes.
  • Shred all information and pre-approved credit card applications and financial statements before discarding.  Don't put identity information in your trash.
  • Young adults are the most common victims of identity theft.
  • Identity theft is most often caused by someone you know.  However, it can be a complete stranger as well.
  • Monitor your individual credit report each year for (1) accounts that you never opened, (2) account balance is wrong, (3) unauthorized activity.  Get rid of all old unused accounts.
  • Monitor your bank statements each month.  Most banks give you up to 90 days to dispute a charge.  Credit card companies typically give you up to 60 days to dispute a charge.
  • To protect and monitor your credit and debit cards, contact your credit card company and have them send you a text message or email whenever a transaction over a specified amount is made on your card.   Many credit and debit card companies offer this as a free service.
  • If you are a victim and contact police immediately.  Go to credit bureaus, report the problem clearly, and and have them seal off your accounts.  Put a fraud alert on your accounts.
  • Federal Trade Commission guidelines for protecting yourself from Privacy and Identity theft.
Manage your Money for Free Broke, cold, and hungry? Social Lending & Borrowing Network
Finance:   Budgeting |  Credit Report |  FICO Score |  Identity Theft |  Investing |  Manage Your Money |  Missing Money |  Retirement |  Stocks |  Student Aid |  Student Loan |  Taxes |  Main Menu



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