Many throw in the towel after maxing out during the Thanksgiving holiday and may not even want to look at food for the next few days. Others may live on leftovers for quite a while. What do your families do with their Thanksgiving leftovers?
Don’t let those casseroles and pieces of turkey go to waste in your pet’s food dish anymore. Let that inner chef shine through and really awe your family with these recipe ideas for the following week with a different type of cuisine for each night!
First, you’ll want to pack and freeze that meat and other leftovers for your later Martha Stewart use. If not, you’ll need to eat them within the next few days.
Le Francais? For the French Palette: CROQUE MONSIEUR
Yes, your leftover ham may be great for making Denver omelets for breakfast for the kids, but try switching it up with a Croque Monsieur! Found all over France in cafés & bistros everywhere, a Croque Monsieur is a glorified ham & cheese sandwich, as we know it in the states. Easy to prep and to make, it’s great for breakfast, for lunch, or for dinner! Don’t forget the egg on top in the am!
Italiano: TURKEY BOLOGNESE
Have the itch for Italian and craving those carbs? Ragu Bolognese in Italian is a meat-based sauce originated from Bologna, Italy. Usually made with ground meats varying from beef, veal, and pork, you can easily substitute the dish with leftover turkey.
Indian: TURKEY TIKKA MASALA
This is a spin on the Chicken Tikka Masala; however, the recipe substitutes the chicken with leftover turkey. If you have a taste for ethnic spices, this is the perfect dish for you and is also very easy to make.
Asian: TURKEY LETTUCE WRAPS
Similar to the popular chicken lettuce wraps from P.F. Chang’s, this recipe from Pinterest calls for another substitution of chicken for turkey and can be prepared in just 20 minutes. You can make a meal out of it, or since it’s quite light, it can be prepared as an appetizer or a side dish along with your meal.
Mexican: TURKEY ENCHILADAS
The enchilada originated in Mexico, as the act of rolling tortillas around different foods is known to be dated back to Mayan times. You can make your enchilada stuffed with leftover turkey instead of beef or chicken. Don’t forget the mole sauce!
All American: TURKEY NOODLE SOUP
Who doesn’t love a good ‘ol chicken noodle soup simmered with various vegetables and noodles? Another comfort food, here is a great recipe substituting chicken for turkey to make for the family to keep the cold away for the holidays!
Old English: COTTAGE or SHEPHERD’S PIE
Is it the last day before your leftovers reach their expiration date? How about a hot cottage pie with the remaining leftovers? Originally known as cottage pie in the 1700s for the poor, it is also synonymous with the shepherd’s pie, created as a way to use up leftover roasted meats. The nice thing about a cottage, or better known as shepherd’s pie is, you can throw in any or all of the odd assorted remains from dinner to your liking to create the ultimate comfort food.
You don’t have to be a master chef to experiment in the kitchen with these recipe ideas. Enlighten your family’s palette with these 7 easy recipes from cuisines around the world, and skip the trip to the grocery store for at least another week following your Thanksgiving dinner!
The post 7 Ways to Turn Your Thanksgiving Leftovers into Hearty Meals – LEGAL APPROVED appeared first on ReadyForZero Blog.
I know what it’s like to pay off debt. It requires discipline. It requires making sacrifices. It requires creativity. It also requires hopefulness. That’s why a recent survey showing that 18 percent of individuals expect to die in debt caught my attention. It reminded me of the importance of hope in achieving any goal, but especially in paying off debt.
No one has to accept monthly debt payments as a part of life. You can pay off debt. The Internet is full of stories of individuals who have paid off massive amounts of debt. I’ve not done any research on it, but I’d venture to guess many of those stories have one common theme – not overlooking anything.
Yes, we all know you can cut spending. Cutting spending, or frugality, will only take you so far in paying off debt. In many instances, it’s going to require creativity. If you’re currently paying off debt, make sure you’re not overlooking any of the following ways to kill your debt.
Earning Extra Money
Making extra money is one of the best ways to pay off debt. Why is that? There is one simple reason – all of that money can be thrown at your debt. The extra money from your cutbacks will help, but will only go so far. Think of the extra money as a way to put your debt repayment on hyper speed. That being said, nearly every time I speak with someone who is paying off debt they’re not seeking ways to make extra money. It doesn’t make sense.
There are many ways you can earn extra money, from simply asking for a raise to having a side hustle or getting a part-time job. If you want to pay off your debt quicker this is one of the best ways to do so.
How many loans or credit cards are you paying each month? It’s likely if you have 2-3, or more, you would benefit from looking at a loan consolidation. In fact, even if it’s one loan a consolidation could make sense if it lowers the interest you have to pay.
I’ve found this to be overlooked as many I speak with are just going through the motions of making multiple monthly payments. It doesn’t have to be that way. If you want to pay off your debt quicker, take a look at some of the best debt consolidation companies to see how they can help.
Prioritization was one of the best tools I used to pay off my credit card debt. However, I didn’t seek it out at first. It took someone walking me through the process of prioritizing my spending to see the power it could have.
You may be thinking this sounds a lot like budgeting. It is, to a certain extent. Simply put, you need to look at what you’re spending money on and the value it provides. That’s not to say you have to cut everything as you do need to have balance, but you do need to see if the extra spending on a certain item would be better spent on debt repayment.
Minding the Groceries
Watching your grocery spending sounds a bit too far off to help with debt repayment. It really isn’t. The average food waste, per person, is $520 each year. Take that amount by how many people you have in your family and you’ll see the extra money being wasted.
That doesn’t mean you can instantly consume everything you buy. What it does mean is you can add some mindfulness to your grocery shopping. If you’re throwing away the same thing or same amount of some food item on a regular basis, start viewing that as money you’re throwing away that could be thrown at debt instead. That can be a powerful visual lesson of how a shift in spending can benefit you.
There are many ways to pay off debt. Your situation is going to look different from others. Make sure not to overlook opportunities where you can kill your debt instead of dying with it.
You probably already know that you can haggle over items at a flea market or the price of a new car, but the one thing many people don’t haggle over — but should — is credit card costs. Whether it’s the first time you’ve missed a payment and you’re being charged a fee, or your interest rate is too high or you want to increase your available credit line, everything is negotiable.
If the thought of haggling with your big, scary bank keeps you up at night, fear not — we have the scripts you can use for just this situation, so you’re more likely to stay calm, level-headed and actually get what you want.
The first thing to remember is that in many situations, you should act fast. The quicker your reach out a bank, the better your chance of getting the situation resolved to your liking. Most consumer protections related to fraud disappear if you wait longer than 60 days to bring it up, so missing this window could mean assuming liability. Your goal with disputes related to a fee the bank has a legal right to charge (think overdraft or late fee) is to get the bank to overturn it as a gesture of goodwill, probably because you’ve been a responsible customer.
When you do call, ask to speak first to a customer service representative, and when you get one, be friendly and succinct. In life they say you catch more flies with honey than vinegar, and the same is true in banking. No matter what you’re asking for, you’ll want to point out how long you’ve been a loyal customer and why you’re valuable to them (aka how much you spend with them), and explain what you want in simple terms. For example, you might say:
“I’ve been with this bank for 10 years, and I spend at least $2,000 on my credit card each month. If you can’t help me resolve my problem, I will have to ask that you close my account.”
If you’re requesting that a late fee be removed, and you believe the fee has been charged in error, you have even more leg to stand on. Then you might add:
“I don’t believe my recent late fee is justified. I submitted my payment on November 6th, which is the same time I submit it every month, but for some reason I was charged a late fee this month. I would like for the fee to be reversed, and for you to ensure that no reporting has been done to the credit agency.”
It also behoves you to thank the customer service rep in advance for any help by saying something like:
“I understand mistakes happen, and I really appreciate your help. If we can resolve this today I’ll be sure to recommend your services to friends.”
If the customer service rep can’t help, ask to speak to the team that handles complaints, or to the manager. At the end of the day, banks really hate to lose a customer, so threatening to leave (even if you don’t really plan to) is a good tactical maneuver. What’s more, when you are transferred to a Retention team after threatening to leave, you will often be offered further incentives to stay, which could then include options to reverse your fees, reduce your APR or increase your credit limit.
If at the end of the day you can’t get what you want from your bank, and you really think it might be time to cut your losses, remember that you can close an account, even if you carry a balance. Just say:
“I’m going to close my account and use another card issuer. I’ll transfer my remaining balance over to them with a balance transfer. It would be really easy for you to stop me, but if you can’t [insert what you’d like done here], then I’ll have really no choice.”
Check out more information about haggling with your credit card company (whether via phone or social media, which is another good way to go) in this story.
Updated April 18, 2017
Do you have credit card debt that you can’t afford to pay off? Do you feel depressed watching all of your payment going towards interest? Are you afraid that you will be in debt for the next 30 years? Don’t just sit at home and worry: take action by transferring your debt from a high interest rate to a low interest rate with a balance transfer.
Chase Slate® has a very popular introductory balance transfer offer. You can save with a $0 introductory balance transfer fee and get 0% introductory APR for 15 months on purchases and balance transfers, and $0 annual fee. Plus, receive your Monthly FICO® Score for free.
The savings can be astonishingly high, and you can take years off your debt repayment. But some people worry that the offer is too good to be true. So long as you do the following 3 things, it really is a free balance transfer:
- Complete the balance transfer within 60 days of opening the account. Otherwise, you lose the offer and standard balance transfer fees and rates would apply.
- Always pay on time. If you are just one day late, you will be charged a hefty late fee. And, if you are 60 days late, you will lose the promotional interest rate.
- Only transfer debt from another bank. You can not use this offer to transfer debt from another Chase credit card – and that includes co-brands (like United Airlines and Southwest Airlines credit cards).
The application process is easy, and will only take a few minutes.
The interest rates on credit cards are shockingly high, especially those store credit cards that you were tempted with during holiday shopping. Most store cards have interest rates higher than 20%, and here are some examples of particularly expensive cards:
- Macy’s: 24.5%
- Wal-Mart: 22.9%
- Target: 22.9%
Store cards are obscenely expensive, but ordinary credit cards also carry a hefty interest rate. Most people who have a balance on a credit card are paying more than 15% on that debt.
If you wake up one morning with a debt hangover, you shouldn’t think of your high interest rate as a life sentence. Your debt does not need to stay on that high interest rate credit card: you can move it to a lower interest rate with an intro balance transfer. And, one of the best balance transfer credit cards out there is the Chase Slate®.
In this article, we will explain:
- What is a balance transfer
- How to qualify for a balance transfer credit card
- Why Chase Slate® is an almost-perfect introductory balance transfer
- How to complete a balance transfer with Chase
- What to do once the balance transfer is complete
If you have any questions about this card, you can always send us an email at firstname.lastname@example.org, and we would be happy to help answer any questions you might have. We always respond to emails within 24 hours, and are usually quicker than that.
What is a Balance Transfer
You have probably received many of these offers in your mail: a credit card company offers you a 0% interest rate if you transfer your existing credit card debt from another credit card company to the one offering the 0% deal.
A balance transfer is exactly what it sounds like: you can transfer your debt from Bank A to Bank B. Bank B wants your business, so they will “steal” your debt from their competition by offering a great interest rate for a fixed period of time (the promotional period). Often, a bank will charge a fee for the balance transfer. Given how high interest rates are on store cards and credit cards, the fee usually pays for itself within 3-6 months. If you can pay off your debt in fewer than 6 months, a balance transfer is not worthwhile. However, if it will take you longer than 6 months, you will almost always save money.
Banks want to steal your business from other banks: that is why the offers are only available for debt with another credit card issuer. For example, Chase is happy to take over debt from Citibank, Wells Fargo or Target. But, if you just want to transfer debt from one Chase credit card to another, you will be rejected.
Just think of cable/internet/telephone companies. They regularly give you amazing deals for the first year if you sign up for a bundle. After the year is over, the rate goes up. This is exactly the same idea: banks are competing for your debt.
How to Qualify for a Balance Transfer Credit Card
Banks will only offer balance transfers to people with good or excellent credit. That typically means that you will require:
- A credit score of 680 or higher (700 preferred)
- A debt burden (explained below) of less than 50% (40% or lower preferred)
- Very few, if any, accounts that are currently delinquent
A debt burden is calculated by adding up your monthly fixed expenses and dividing that by your monthly income. The expenses should include: monthly rent or mortgage payment, auto payment, student loan payments and the monthly payment on any other credit cards or loans that appear on your credit bureau.
If your total payments are more than 50%, you will likely be declined. If it is less than 50%, you have a chance. However, banks typically want to see debt burdens below 40% (and you will likely get approved at higher debt burdens only if you have a very high credit score).
Banks do not share their underwriting criteria: instead, they keep them as carefully guarded secrets. Life would be a lot easier if they just told us what they wanted! However, at MagnifyMoney, we have done our best to reverse-engineer the underwriting criteria. If you meet the criteria above but are rejected, please let us know!
If you don’t qualify for a balance transfer, you may want to consider a personal loan. The concept is the same: you can take out a loan and use the proceeds to pay off existing credit card debt. But, unlike the credit card balance transfer market, personal loan companies tend to approve much riskier people. Just make sure the interest rate on your new loan is lower than the interest rate on your credit card before proceeding.
If you want to compare the cost of a balance transfer to the cost of a personal loan, you can do that with our balance transfer and personal loan calculator.
Why Chase Slate® is Almost Perfect
There are two key features of a balance transfer: the balance transfer fee (charged as a percent of the balance that is transferred, and added to your bill upon completion of the transfer), and the duration of the balance transfer (number of months at the promotional rate).
Chase does not charge a balance transfer fee for the intro offer. It is absolutely free to move your debt from another credit card issuer to Chase and it’s 0% intro APR for 15 months.
So, if you move your debt from your store card and pay it off by month 15, you will not pay a dime to Chase. It will have been completely free. If you do have a balance remaining at the end of the 15 month promotional period, you will not be charged interest retroactively. In other words, the interest that would have been charged during the 15 month promotional period has been waived completely. From month 16, interest would be charged on a go forward basis.
The balance transfer offer is almost perfect. Just be careful of the following:
- You can only transfer debt from a bank other than Chase. That includes Chase co-branded credit cards, like United Airlines, Southwest Airlines, Marriott and others. Because Chase is the #1 credit card issuer in the country, it is possible that some or all of your debt is already with Chase.
- The ongoing purchase APR (after month 15) will depend upon your credit score. The ongoing purchase APR range is 15.74% – 24.49% variable.
Chase has invested in one of the best introductory balance transfer offers out there. If you use the intro offer responsibly, you can have no interest and fees for 15 months. You should take advantage of the offer and reduce your debt as much as possible.
If all of your debt is with Chase, you can find plenty of other offers on our balance transfer marketplace. Just input how much debt you have and how much you can pay each month, and we will show you the offers (updated daily) and how much you will save with each transfer. There are plenty of options out there, so there is no reason to ever pay a high interest rate on your debt.
How to Complete a Balance Transfer with Chase
Make sure you complete your balance transfer as soon as you receive your card. The introductory offer is from when you opened the card, not the date you transfer the debt. So, every month you wait is a month of a promotional balance interest wasted.
It is incredibly easy to complete the balance transfer once you receive your credit card. You can always call them. The call center employees typically receive incentives to complete balance transfers, so it is highly likely that they will want to help you.
But, you don’t need to call them. You can complete the balance transfer online. We have put together a step-by-step guide. It should take you fewer than 5 minutes. All you need is the credit card number of the account that you want to pay off.
Warning: it can take up to 2 weeks for the payment from Chase to reach your bank. Make sure you continue to make payments on your old card until you receive confirmation that the old balance is paid off.
What to Do Once the Balance Transfer is Complete
Once you complete the balance transfer, your goal is to pay off your debt as quickly as possible. In a best case scenario, you divide the total balance by 15 months, and make sure you pay that amount each month. That way, you know that you will be debt free by the time the promotional period expires.
During the promotional period, make sure you:
- Try to avoid spending on the credit card. Remember: the purpose of this 0% is to help you pay off your debt faster, not to get into more debt.
- Make sure you make your payments on time, every month. If you pay late, you will be charged late fees. If you are 30 days late, it will hurt your credit score. And, at 60 days late, you will lose your 0% interest rate – and could be charged the penalty interest rate
At the end of the promotional period, don’t close the credit card. Closing credit cards can hurt your score, and Chase Slate® does not have an annual fee. So, it is a nice card to keep.
If you have debt sitting at a high interest rate, you should move it now. There is no reason to drown in high interest rate debt, and there is no reason to work hard only to pay interest to the bank.
The post Chase Slate® Review: Is this Legit? An Introductory $0 Fee Balance Transfer? appeared first on MagnifyMoney.
Although creditors are held to standards by the Fair Credit Reporting Act (FCRA) when reporting your data to the credit reporting agencies (CRAs), they may still make mistakes. Or, identity thieves may apply for lines of credit using your name or personal information. In these cases, incorrect data may show up on your credit report and, if you don’t spot it, may stay there.
Here are few important things to remember as you begin the process:
- Errors in your personal information, accounts, or payment history are important to remedy, but not everything can be disputed or removed. The information being disputed must be incomplete, incorrect, or the result of fraud.
- You cannot file a dispute for information which you know to be true. However, legitimate errors can be disputed for free, and it is important to do so to keep your credit report updated and correct.
Reviewing your credit report
If you’re planning to file a dispute, you may have already reviewed your credit report. If not, you can obtain one free copy each year from all three major CRAs at annualcreditreport.com. Pay careful attention to your personal information, including your address and the spelling of your name, as well as your account balances and payment histories when reviewing your accounts. Errors in this information may be easy to miss and can cause problems. Keep track of any errors you find and whether they’ve shown up before.
Filing a dispute
Once you’ve reviewed your credit report, and if you believe you have identified a potential error, you can file a dispute with the CRAs online, by mail, or over the phone. The method you choose will correspond with how you receive updates, so be sure to choose your preferred method of contact.
Investigating on your behalf
Once you file a dispute, you should receive a response within 30-45 days, likely by mail or email, depending on how you submitted your dispute. During this time, the CRA will investigate your claim, attempt to verify the information with the lender involved, and determine whether an error has occurred.
The dispute process at Equifax takes approximately 30 days. On average, a dispute filed at Equifax is completed within 10 days.
You can also contact the relevant lender ahead of time to ensure they have your correct personal information on file.
Once an error has been corrected, the other CRAs should eventually be notified and make the same changes. To help expedite the process, you can file a dispute with them for the same information.
Once you have had your dispute resolved, it’s not a bad idea to check your credit report again and ensure the changes have been made.
Some consumers are so annoyed by the new chip-enabled credit cards that they’ve begun avoiding stores that require them, a survey from Mercator Advisory Group, a payment industry research firm, claims. That’s an unwanted headache for small business owners, especially those fighting for shoppers during the busy holiday season.
The “avoiders” group is small but significant — 7% of consumers who hold a new EMV card and have tried using it, a number that represents roughly only 2% of U.S. adults. But young adults were nearly twice as likely (13% of EMV cardholders) to tell surveyors they “avoid stores that force me to dip my chip,” Mercator says.
“While consumers want the added security, consumers are having issues with the early implementation of it,” said Karen Augustine, manager of primary data services for Mercator and the author of a report on the survey. “U.S. merchants have not yet widely implemented the EMV card readers, but it’s happening more and more. With the holiday season, new implementations may have difficulty managing customer experience.”
The survey was taken in June, before the Oct. 1 liability deadline encouraged retailers to make the EMV switch. Far more consumers hold EMV cards now, yet the survey didn’t answer whether that means more are trying to avoid the stores that require them.
Credit.com has written on consumers’ frustration with stores that have poorly implemented EMV readers and on concerns with checkout delays caused by slow EMV point-of-sale terminals. But most consumers have embraced the technology and their main concern is that retailers haven’t adapted to the system, which is viewed as more secure.
Put simply, it sounds like retailers can’t win. Some consumers say they’ll avoid EMV stores, while others say they’re frustrated with stores that don’t use EMV. The EMV Migration Forum, an industry group, did not immediately return a request for comment.
Despite the potentially troubling existence of EMV avoiders, the survey did share some good news. Plenty of consumers — 34% of EMV cardholders — said they “appreciate stores that enable me to use my chip,” while 35% said that even though checkouts indeed took longer, they weren’t bothered by it.
There are mitigating factors to consider in the Mercator survey as well. As we’ve seen after major credit card hacks, consumers often say they’ll avoid shopping at certain stores due to payment concerns but still shop there anyway. So these responses don’t always translate to action.
Still, for consumers to even suggest they’d avoid a store sounds like a nightmare to retailers during the competitive holiday season. “I have a chip card and some of the smaller holiday stores are starting to implement it, and the cashiers aren’t too pleased with the situation at the holidays,” Augustine agreed. Too bad something so utterly simple is causing so much trouble for store owners.
More on Credit Cards:
- An Expert Guide to Credit Cards With Rewards
- How to Get a Credit Card With Good Credit
- How Secured Cards Can Help Build Credit
The post Annoyed With Your Chip Credit Card? You’re Not Alone appeared first on Credit.com.
Two years ago, hackers planted malware in Target’s point-of-sale system and stole 40 million credit card and debit card numbers, in addition to 70 million names, addresses, email addresses and phone numbers of Target shoppers. Worse data breaches have occurred since then, but because the Target breach happened during the Black Friday weekend and early December, it will long be associated with the security risks of holiday shopping. Those risks are present when you shop in stores and online.
Half of consumers who responded to an online holiday shopping survey from Experian said they’re worried about identity theft. Among millennials, concern is more common: 60% said they’re worried about identity theft this holiday season. Most consumers surveyed said they see online shopping and shopping in stores equally risky. The online poll included responses from 1,035 U.S. adults, but is not representative of the U.S. adult population.
Consumers’ concerns make sense: People shop more than ever in November and December, making retailers a target (no pun intended) for hackers. Though many credit card issuers and retailers have enabled chip-and-signature technology (which is supposed to be harder to counterfeit than credit cards with traditional magnetic stripe technology), the new security measures are far from universal in the U.S. Even when they’re used, chip credit cards are not impervious to theft, so consumers have to remain vigilant for signs of fraud.
Preventing identity theft is practically impossible, but there are many steps consumers can take to protect themselves from the financial damage that sometimes comes with it. First of all, it’s smart to monitor your financial accounts for suspicious activity or unauthorized transactions. With online banking and mobile applications, that’s pretty easy to do on a regular, if not daily, basis.
According to Experian’s survey, a majority of shoppers are taking steps to protect their information while shopping online: 54% said they’ll only shop on personal Internet connections (as opposed to public networks, which can be more susceptible to hackers), 52% said they’ll check to see if the site is secure, 51% said they’ll log out of their accounts after shopping and 48% said they’ll go directly to websites rather than click on links.
On the Lookout
On top of that, regularly reviewing your credit helps you spot fraudulent activity beyond card theft. If someone gets your personal information and uses it to open an account in your name, it should show up on your credit report, and if you’re checking yours, you’ll be able to spot, dispute and prevent deeper fraud. You can watch out for identity theft by viewing your your free credit report summary every 30 days on Credit.com.
You could also consider a credit freeze to prevent new account fraud, though it usually costs a few dollars to do so at each of the three major credit reporting agencies. If you want to open a new account that requires a credit check — a credit card, a loan or even a new cellphone or utility service — you’ll need to un-freeze, or thaw, your credit reports, which often has fees, as well.
More than anything, it’s important to be aware of your risk for identity theft all year round, not just during the holidays. It’s a constant threat, but you can minimize the damage it causes by knowing the signs your identity has been stolen and how to respond if you see them.
More on Identity Theft:
- How Do I Dispute an Error on My Credit Report?
- 3 Dumb Things You Can Do With Email
- What Should I Do If I’m a Victim of Identity Theft?
The post Should You Be Worried About Identity Theft on Cyber Monday? appeared first on Credit.com.
While investing can help you build wealth, taxes can really take a toll on your earnings. Savvy investors know that the value of securities go up and down after being purchased. Paying diligent attention to your taxes and using losing picks to reduce your tax bill can help keep more money in your pocket.
Tax-loss harvesting is the act of capturing downturns in the market to reduce what you owe in taxes. By selling stocks or other assets that have lost value, you can experience a reduction in your tax liability that you can use to offset any capital gains tax you may owe.
It can not only reduce your investment tax bill, but also reduce your overall tax bill as you can use up to $3,000 of tax losses to reduce other taxable income and reduce future tax bills. This is because you can roll over old, unused harvest losses.
How It Works
Your portfolio probably already contains some tax losses that can be harvested to reduce this year’s or future tax bills. If you plan to offset a portion of your capital gains with these losses, you will need your tax lot and cost basis (price you paid to purchase a security plus any additional broker fee or commission fees) information.
Determine whether your gains and losses are short- or long-term. The size of your savings depends on your income level and the amount of your short- and long-term capital gains, as well as any current losses you have already realized.
The higher your tax bracket, the greater the potential for tax-loss harvesting savings. The best you can do is keep good records of your assets year-round to help you track your cost basis and locate any capital gains tax liability.
What You Should Know
While selling investment losses can be a good move, it’s important to not undermine long-term investment goals just for tax-saving purposes. For example, if you are investing money to save up for specific financial goals (retirement, buying a home, etc.), you don’t necessarily want to sell those investments and jeopardize reaching your goals to avoid paying some taxes this year.
The best candidates for tax-loss harvesting are depreciated investments that do not fit your investment strategy anymore, have poor growth potential, or can be replaced by other similar investments. It’s also a good idea to beware of the wash sale rule, a restriction that the Internal Revenue Service enacted to limit irresponsible use of capital losses for tax benefits. Investors must wait at least 31 days before buying back either the same or any like-kind security and then stating a loss.
You can always visit the IRS website or consult your financial adviser for more information about how capital gains and losses are computed and how to minimize your taxable investment income. There are now even robo-advisers, or computer programs that perform automated money management services that can help you take advantage of tax-loss harvesting and portfolio balancing without requiring you to take any action. (It’s a good idea to properly vet any service or company you are considering before you move to use it.)
More Money-Saving Reads:
Q. My daughter goes to college in one year. We’ve saved a lot in 529 plans and retirement accounts, and we only have about $45,000 in a brokerage account that would count against us for financial aid purposes. I also have $20,000 in credit card debt. Should I sell the stocks and pay off debt so we appear to have less cash for financial aid purposes? The brokerage money has no real goal.
A. Paying off debt can be a great thing, but let’s first talk about financial aid and how your assets will be considered.
The first step in the financial aid process is completing a form called the Free Application for Federal Student Aid, better known as FAFSA, said Michael Maye, a certified financial planner and certified public accountant with MJM Financial in Gillette, NJ. Roughly 300 schools also require another form known as the CSS Profile, which is short for the College Scholarship Service Profile.
We’ll focus on the more common FAFSA form and how it treats various assets for financial aid purposes.
“On a macro level, the FAFSA formula treats income/assets as follows: 20% of student’s assets (excluding 529s), 50% of student’s income after some allowances, 2.6% to 5.6% of parental assets based on sliding income and allowances, and 22% to 47% of a parent’s income based on sliding income and allowances,” Maye said.
These percentages are all important for the starting point for need-based financial aid — the calculation of the Expected Family Contribution (EFC) — which considers income as well as assets of both the parent and student, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge, N.J.
“Neither mortgage debt nor consumer debt such as auto loans and credit card balances can be used to offset the value of investment assets in calculating the net worth, which is entered into the formula,” Mott said.
Now with your situation, Maye said, the 529 plans as a parental asset may reduce financial aid by a maximum of 5.64%, depending on your circumstances.
“In terms of the retirement accounts, it is good news as the calculation excludes retirement assets such as 401(k)s, IRAs and Roth IRAs,” Maye said. “However, if you tap a retirement asset to pay college bills — including a Roth IRA — that is considered income on the following year’s FAFSA.”
Maye said your brokerage account receives the same treatment as a 529.
Using your assets to pay debt can reap multiple rewards, Mott said.
“It may reduce the EFC, your cash flow should improve without the monthly payments and you will save the interest expense as well,” she said.
Assuming you have an adequate emergency fund, it likely makes sense for you to use the taxable brokerage account to pay off credit cards, Maye said.
“The primary reason it makes sense to the pay off the credit card debt is it eliminates a non-tax-deductible, high interest rate liability,” Maye said. “The fact that it might be helpful from a financial aid perspective is a secondary benefit.”
But, before you use your brokerage account to reduce the outstanding balance on your credit cards, be sure you understand the tax consequences of the decision, Mott said.
“The addition of possible capital gains to your adjusted gross income that aren’t fully offset by taxes might actually increase your calculated EFC,” she said. “You also don’t want to end up with a tax bill you hadn’t anticipated come next April.”
She recommends you speak with a tax professional to determine what, if any, capital gains might result from the sale and how that would affect your 2015 income tax profile.
More on Student Loans:
- How Student Loans Can Impact Your Credit
- Can You Get Your Student Loans Forgiven?
- A Credit Guide for College Graduates
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