Contribute to an IRA and Save on Taxes Now

Finances

Many people invest in traditional individual retirement accounts (IRAs) because they’re told these accounts offer a good way to save for retirement. And it’s true!

One of the biggest reasons why? You get to invest money in an account that can grow tax deferred until retirement. In other words, you can save money now and take advantage of the fact that you won’t be on the hook to pay taxes on investment returns (interest, dividends and capital gains) until you take the money out later in life.

What is it about tax deferral that’s so great when it comes to saving for your financial future? Essentially, this is a legitimate, legal way to avoid paying taxes if you use your traditional IRA in the right way.

Here are the specific types of tax deferral you can take advantage of when you save for retirement in an IRA – along with why they make a powerful impact on your nest egg.

Should You Save for Retirement or Pay Down Your Mortgage?

Example 1: No Taxes on Investment Returns

As mentioned above, the money you invest in your IRA can grow and you don’t have to pay taxes on interest, dividends, and capital gains that you earn by investing in stocks, bonds, mutual funds and exchange-traded funds.

That means you can buy and sell investments and not worry about the tax consequences as long as you keep that money in the IRA account.

Not having to pay taxes right away benefits you because it may boost your ability to save. If you have to account for taxes on your investment returns, which may cut into the amount you can actually contribute to your account. But since taxes are deferred, you can take advantage and save more right now – and allow compound interest more time to go to work for you and your investments.

Example 2: No Taxes on Current Income

An even better benefit comes in the form of income tax deferral. In certain situations, you may be able to avoid paying taxes on a portion of the income you earn in any given year by contributing to an IRA.

Here’s an example: Let’s assume you’re eligible for tax deferral and you’re in the 25% marginal tax bracket. (Without getting into too much detail, this means you make between $37,450 and $90,750 if you’re single and between $74,900 and $151,200 if you’re married and choose to file taxes jointly with your spouse.)

If you contribute $5,500 into your IRA this year, you’ll receive a deduction on your tax return in the amount of $1,375. Put another way, it feels like you only invested $4,125, which your wallet will appreciate. This is because you don’t actually pay ANY income taxes on the $5,500 until later (typically in retirement).

Since you don’t pay taxes on that money, that means you get to invest the full $5,500 – rather than just $4,125. That’s the amount you would have had to invest in a normal brokerage account if you actually had to pay $1,375 in taxes to the IRS. Thanks to the deduction, you don’t have to.

Over time, this can add up to a significant amount of investment growth in your IRA making tax deferral a very powerful factor. Just think about the amount you can save in taxes over your working years if you continue to invest $5,500 into your IRA every year. (That’s the maximum amount you can contribute to an IRA in 2015 if you’re under 50. The amount rises to – $6,500 for anyone over age 50.).

Make Sure You Take Advantage of Tax Deferrals

So, how do you take advantage of tax deferral inside an IRA? Well, to receive the benefit of the example number one above, you simply have to earn an income. If you do, then you can open an IRA and begin investing up to $5,500 every year that you earn a wage.

Once you hit 50 years old, you can then contribute another $1,000 per year. (These limits will continue to increase with cost of living adjustments.)

Example number two is a little tougher to qualify for. In order to deduct the amount of money you contribute to your IRA, you must not have access to another retirement plan elsewhere, typically through work. If, for example, your company offers a 401(k), then you have access to another plan. And if you do have that access, you cannot deduct your IRA contributions (there is an exception noted below).

The key phrase here is “have access to” because it doesn’t matter if you actually contribute to the employer plan or not. You are still not eligible for a tax deduction on IRA contributions because you could have contributed to that 401(k). Before you get too bummed out, know that, you do get the same tax benefit explained in example two by contributing to your employer’s retirement plan so you’re still in good shape. Plus, you may even get a matching contribution from your employer, which is something you won’t get in an IRA.

There is one exception to this rule. If you make less than $61,000 in any one year, you can deduct your IRA contributions even if you have access to another retirement plan at work ($98,000 if married filing jointly and $10,000 if married filing separately). You may also be eligible for a partial deduction depending onyou modified adjusted gross income. Find the IRS chart here.

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One More Tax Advantage to Use in Your Favor

If you’re not excited about the opportunities to take advantage of saving on your taxes now while simultaneously saving for your financial future, here’s a bonus for you: if you haven’t contributed the maximum amount to an IRA for the 2015 tax year (or even opened up an IRA yet), you have until you file your taxes or the April 15 deadline to contribute for last year!

Why would you do this? Well, the more money you get into your IRA, the more money you have working for you for retirement on a tax-deferred basis. If you have the funds available, it’s a great opportunity to increase your retirement nest egg.

Plus, if you just realized that you owe taxes for 2015 and you are eligible to receive a tax deduction by contributing (see rules above), you can reduce a percentage of the taxes owed so you don’t have to pay as much.

It’s yet another win-win situation offered by contributing to your IRA!

The post Contribute to an IRA and Save on Taxes Now appeared first on MagnifyMoney.

7 Ways to Network Like the Pros

Female Woman Sitting At Interview

Networking can be such a daunting word. For some, the thought of self-promotion and cozying up to strangers all in an effort to get ahead in their careers is intimidating work. These days, however, the career experts will tell you that networking is, for the most part, essential. But if it’s not exactly your forte, how should you go about doing it? We chatted with some experts to get their personal tips on the best ways to network (as well as what to absolutely not do).

Step 1: Create a strategy

How it helps: Figuring out your objectives for the event prior to attending will help you focus on accomplishing them once you’re there, says Trevor Simm, founder and president of employment and staffing agencies OpalStaff and Talos Solutions. For example, common objectives during a networking event might include handing out a certain number of business cards, meeting and connecting with certain people you know will be there, or spending X number of hours at the event. “Always be sure that you have enough leave-behinds, like business cards,” says Simm. “And be sure that the information on them is current and up to date. Also make sure that whatever you leave behind matches what is posted about you elsewhere, like on LinkedIn, your company site, Twitter, etc.”

Step 2: Drop the elevator pitch

How it helps: If part of your strategy for a networking event is to create an elevator pitch for your goals, you might want to reconsider. “We’ve all had the awkward experience of delivering and/or hearing a rehearsed elevator pitch,” says Kristi Daniels, an executive career coach and founder of Thrive 9 to 5, LLC. “We’re humans, not automated recordings. When you’re passionate about what you do and why you’re there, you don’t have to rehearse anything.”

Step 3: Perfect the art of networking conversation

How it helps: Networking events are all about conducting meaningful conversations with people, which takes some thoughtful consideration. For example, Jennifer Lynn Robison, Esquire, CEO of Purposeful Networking, suggests never starting a conversation at a networking even by asking people what they do. “Try to ask something like, ‘What projects are you working on?’ ‘How has your day been?’ or ‘How did you get into your industry?’” she said. “These are more open-ended questions that will promote meaningful discussion. If talking doesn’t come naturally to you, it’s also okay to prepare some talking points ahead of time and to have a cheat sheet in your car or purse to review before you go in.”

Joan Tremblay, a communication expert and career development consultant, trainer and coach, also recommends remembering people’s names when meeting them (use an association strategy, if necessary), and spending the majority of the time listening and acknowledging. “People who just talk about themselves are boring,” she said. “People find people interesting who are interested in them.”

Step 4: Go with a partner

How it helps: Especially if attending events on your own makes you nervous, bringing along a professional partner is a great idea. “Go to the event with a strategically selected partner — someone who is not a competitor but targets the same customers as you,” says Victor Clarke, owner of Clarke, Inc. an integrated print, web and digital marketing solutions firm. “Stop and introduce your partner to customers and acquaintances, and they will do likewise. This approach is much more informal than cold calling strangers and it will leave your address book groaning under the strain of new contacts.”

Step 5: Be genuine

How it helps: The most effective networking happens when you’re at your most genuine, says Sam McIntire, founder of online learning platform Deskbright. “Be honest and sincere in all your interactions with people, particularly at professional events,” said McIntire. “Feel free to talk about things other than your job — you’d be surprised how many high-quality and enduring connections you can make by discussing things that aren’t work-related.”

Step 6: Be persistent

How it helps: While you’re busy being genuine, it also helps to be persistent. “If you want something from someone, don’t expect them to drop everything else on their plate and help you out,” McIntire added. “People are busy, and it often takes a couple of tries to get your message through. Be polite but persistent in your actions, particularly if an important contact or connection isn’t responding to or following up on your emails. Send a gentle reminder of what you want, and how giving it to you will be beneficial for all involved.”

Step 7: Listen to your instincts

How it helps: In most cases, your instincts are usually spot on, and a networking event is no different. “If you feel it is important to ask questions, do so,” says Froswa’ Booker-Drew, PhD, author of Rules of Engagement: Making Connections Last. “If it doesn’t feel as if it is going anywhere, pay attention to that feeling, as well.”

It’s also important to remember that not everyone can be on their game at every single networking event, so don’t necessarily write off one not-so-stellar interaction as a total loss. “It just might not be good timing,” says Dr. Booker-Drew. “Continue the relationship and keep in touch. You never know what might happen in the future.”

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How to Negotiate a Medical Bill Like a Pro

Couple Reading Letter In Respect Of Husband's Neck Injury

Rising healthcare costs are something that pretty much every American has to deal with, and unfortunately soaring deductibles and out-of-pocket limits only make the situation worse. In fact, one survey found that average annual deductibles have grown by a whopping 255 percent between 2006 and 2015.

So that’s the bad news. The good news, however, is that everything — including medical bills — is negotiable.

Michelle Katz, LPN, MSN, author of “Healthcare Made Easy: Answers to All of Your Healthcare Questions under the Affordable Care Act”, has spent more than 15 years negotiating for her own medical bills, and now writes books and gives lectures around the country to help others negotiate their own bills, as well.

While it might take a little practice, if a little negotiating could say you hundreds (if not thousands) on medical bills, it’s probably worth the effort, right? Here’s what Katz has to say about the process, and how you can start negotiating today.

What are some of the most common medical bills to negotiate?

MK: Dental, surgeries and blood work, you can negotiate all of it. And while it all depends on the facility, I have typically found that ambulance bills tend to be some of the hardest to negotiate. The key is getting to the person whom I call the “dealmaker,” who traditionally is the person who handles billing. This can be anywhere from the director of billing to the office manager to the president of the facility. Keep in mind that you do not want to start all the way up top — you should always go through the correct channels first. For example, some CEOs of integrated systems have only a general idea of what is happening in their billing department, if at all.

Additionally, a local hospital is usually easier to deal with than an integrated system where there is a lot of bureaucracy, and it will all depend on the outsourcing groups [like radiologists, lab work, anesthesiologists, etc.], as well.

What are the top five things people need to keep in mind when negotiating a medical bill?

MK: First, collect all of necessary information ahead of time. In other words, ask for a copy of your medical record, an Explanation of Benefits [from your insurer] and an itemized bill [from your doctor]. Then, figure out the right person to get in touch with. Put everything that you do in writing, and take copious notes when talking with others. Be firm and persistent, but also pleasant and patient. When an agreement finally is made [Katz has seen this take anywhere from a few days to a few years, with the bigger the bill taking longer to get resolved], get those details in writing.

What language should people use to negotiate?

MK: It all depends on the facility and what you need. What I tell people is to always stick to the facts and try to keep the emotion out of any correspondence. I have seen too many times where people ramble about their condition, etc. If you’re negotiating against an incorrect fee, stick to the facts like, “in my medical chart it stated xyz, which does not reflect line xyz of my bill sent out on January 15, 2016. See attached.” You also want to be sure you say something like, “I’ll hold out on any collections process until this issue is resolved and the mistakes are corrected.”

For a situation where there was no invoicing mistake, but a person would simply like to negotiate for a lower fee, it’s usually better to negotiate before receiving any services, and again get everything in writing. Make sure all fees are covered and accounted for, and that whatever contract you come up with together states that fact so you don’t receive any surprise bills in the end. In many of these cases, if you offer to pay cash within a certain amount of time, the discount can be significant — about 20 percent. You can also ask your doctor if they can work out a deal if you know you are going to have a few visits in your future. It’s best to be honest and let the person know you can’t afford the full price for whatever reasons. I have had clients who are going through divorces and are in between jobs that have stated that and got huge discounts.

Is there anything else people should be doing to keep the process as streamlined as possible?

MK: The process takes time, and within that time period a lot may happen, like administration changes. So be sure you are always keeping up, and if you don’t hear something, don’t just assume it was taken care of. Along those same lines, don’t feel you need to respond [to a bill] immediately, since it can be an extremely emotional situation and you may want to take some time to go through everything and write your questions down, but do respond in a timely manner, at least within the deadline of the bill. If your financial situation changes during the course of your negotiation — for example, if you’re let go from your job — let the person you are working with know, and ask if there is any other financial assistance.

The post How to Negotiate a Medical Bill Like a Pro appeared first on MagnifyMoney.

Help! I Need a Higher Credit Limit

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An ample credit limit can give you lots of spending power and flexibility, so it’s understandable why a person may be looking to get a higher one.

Still, if you’re one of them, be sure you can handle more available credit first. Credit cards are best leveraged by paying your balance off in full each month. Otherwise, interest can really bump up the lifetime cost of your debt.

Plus, high credit card balances can damage your credit — you want to keep the amount of debt you owe below at least 30% and ideally 10% of your available credit limit(s) for best results. You can see how current balances may be affecting your score by viewing your free credit report summary, updated each month, on Credit.com.

Will More Credit Cause More Problems?

Consumers looking for a higher credit limit because they’re already overextended should look to pay existing expensive balances down first. Doing so can keep you from getting (even further) in over your head.

You can pay down credit card debt by looking into a debt consolidation loan or balance transfer credit card. (You can go here to learn about the best balance transfer credit cards in America.) You can also redraft your budget to see where you might be able to find more dollars to put toward those balances.

With that in mind, here’s how you can ultimately score a higher credit limit.

1. Improve Your Credit

Lending decisions — including what credit limit you will be awarded — are largely determined by your credit score. So, before you start looking for a bump, be sure your credit is in tip-top shape. You can generally improve your credit by reviewing your credit reports for errors, pinpointing your credit score killers and coming up with an action plan.

2. Increase Your Net Income

Issuers also take income into consideration when deciding on credit limits, so increasing your monetary intake (or, conversely, lowering your monthly expenses) could make you eligible for an increase. Keep in mind, the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) allows banks to consider any household income you have access to, an important consideration for at-home spouses.

3. Call Your Issuer

Issuers routinely review cardholder creditworthiness, so, yes, there’s a chance they’ll up your credit limit all on their own. But if there’s a time-sensitive reason you’re looking for more credit or there are certain circumstances your issuer may not otherwise know about (like your recent raise), you’re better off calling them directly to request an increase. Just remember this request may generate a hard inquiry on your credit report.

4. Comparison Shop

If your issuer won’t bump up your limit or you think your credit score has improved enough to qualify for better terms and conditions, consider shopping around for a new credit card. Premium rewards credit cards, for instance, tend to have higher credit limits associated with them. Just be sure to vet carefully any card you are considering before applying, since these applications, too, will generate a hard inquiry on your credit report and could ding your credit score.

More on Credit Reports & Credit Scores:

Image: Ingram Publishing

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13 Things I Realized After I Bought My First House

new_home

As soon as my husband and I pulled up to see the house we’d eventually buy, it already had a good vibe to it. A blue house with a red door— just like the one I grew up in. It struck a sentimental note with me immediately.

After living in one-bedroom apartments for the past seven years, we were looking to finally make the move from renters to homeowners. It wasn’t a quick process— buying a house (and getting a mortgage) aren’t things that move quickly, generally. But once we moved in, we knew we had a long to-do list of things we wanted to accomplish to make this house ours. There were a few bumps along the road, though. Here are the sometimes costly, often annoying and always informative things I learned from my first few months of homeownership.

1. Recycling & trash aren’t necessarily provided by your county/city.

Once we moved in, we knew we had to set up all of our utilities. As apartment-dwellers though, we didn’t realize how many services aren’t included in some areas’ public works departments. In our area, trash and recycling were not provided gratis by the city or county— we had to pay the government to take our garbage away or hire a private service to do it instead. It’s not an incredibly expensive item to add to our budget, but it was definitely an expense we weren’t anticipating.

2. Get ready for higher utilities.

The biggest apartment my husband and I had ever lived in was just about 900 square feet and it was a garden apartment, so it remained pretty moderate temperature-wise throughout the year. Our utility bills were pretty low. That’s why our first bill for our considerably larger house came as a bit of a shock. We moved in the late fall, so we knew winter heating bills were ahead of us, but we weren’t expecting our first electric and water bill to be nearly three times what our apartment’s bill was.

After we got that bill, I had a much bigger appreciation for why my parents nagged my sisters and me about leaving the lights or TV on when we left a room. Kids, take it from me, parents just understand how expensive electricity is.

If you’re really worried about your bills, you can ask about budget billing or “levelized” payments. Those plans allow you to pay a similar amount each month, adjusted periodically depending on your use. We haven’t done that yet. I wanted to wait a year to see if it made sense— get a feel for how different every month can be and how we can just do a better job of being more efficient too.

3. Air filters — you have to change them more often than you think.

I’ve never had to own a heating and cooling system before, so maintenance was an expense I expected, but had no idea how to budget for. Air filters on your air-conditioning and heating units need to be changed every 4-6 weeks. We got that tip when we moved in and set reminders for ourselves so we won’t forget.

4. A big yard is beautiful, but hellish to maintain.

I loved the big, open green space at our house when we bought it. Then, when we finally moved in, we had a yard fully covered in leaves and the work began. That first weekend we were in our new house wasn’t actually spent inside the house. It was spent in the yard raking and leaf blowing and collecting sticks that had fallen from our big oak trees. It was a two-day, two-person job and, of course, the next weekend the yard was covered again. Maybe next year we’ll opt to get a lawn maintenance company to help with the work load, but it will all depend on the price.

5. Buy a snow shovel immediately.

You never know when you’ll need it and don’t want to be without one when you get a foot of snow. Trust me. That storm in January that dumped a foot of snow on the Mid-Atlantic? Yeah, that hit us hard.

6. You’ll be going to home improvement stores … A LOT!

We had one room we wanted to completely re-paint and freshen up. It had dark, glossy, stained-wood built-in cabinets all along one wall, with trim and ceiling beams to match. The walls were a yellow-beige and it was the one room that almost made us walk away from the house before we bought it. (It was literally marked “man cave” on our breaker box, as my husband discovered about a month after moving in.) We decided we wanted to paint all the trim, molding, paneling, built-ins and beams white and the walls and ceilings a light gray. It took four weekends of work to finish the whole project. But the real kicker was that it took probably half a dozen trips to a home improvement store to finish the job.

Paint brushes, drop cloths, caulk, more caulk cause we underestimated how much we’d need, liquid sandpaper, paint, more paint because we didn’t like the samples we got the first time, gloves, rollers, paint trays, and even more paint because we underestimated how much we’d need (again). It was a lot of trips back and forth. Luckily, we have some supplies now so the next home improvement project will go more smoothly.

7. Gutters fill up so quickly.

Think your yard is bad? The gutters are worse. We swore up and down when we cleaned them up the first time because we thought the previous owners had maybe neglected them for a while— they were filled to the brim with rotting leaves, twigs and sludge. Then we lived in the house for another two months and realized that was just a year’s worth (maybe less) of buildup. We’ll be encountering the same horrible sludge next year.

8. Make sure your home inspector looks at the outside of the house too.

Our home inspector did a great job, pointing out some potential trouble spots. One in particular was a tree that looked like it was distressed. We were able to get a credit for the tree, and about a month ago called out a tree trimming service to have the tree taken down. The problem? Our credit would only cover half of the cost of removing the whole tree. We opted to remove the branches that looked dead and maybe revisit it next year when we could see if that had fixed the problem or if the whole tree needed to go.

It was a lesson learned though. If our inspector hadn’t done a really thorough job and taken a look at the yard and other parts of the exterior of the house (often this is not required in an inspection) then we could have had a big problem the next time we had a major storm.

9. Don’t buy furniture just to fill space.

I already knew that new homeowners often over-extend themselves when they first buy a house by opening new credit cards and buying tons of furniture to fill the space — it’s an effect of working in personal finance. But what I didn’t realize is how strong the urge is to buy, buy, buy. You want to welcome friends and family into your home as soon as you buy it. You want them to get a sense for where you’ve settled down. But that urge can blind you to the fact that the dining room table you desperately want is out of your budget right now. Trust me— I knew better and still was tempted to splurge unnecessarily.

10. The first time you make a fire in your fireplace, make sure you own a fire extinguisher.

There are tons of YouTube videos that can help you figure out how to operate your fireplace. Be sure to look through them before you attempt it. After successfully making a fire in our fireplace for the first time (without incident), my husband and I both realized we hadn’t bought a fire extinguisher yet. It could have been a disaster, though luckily it wasn’t. We bought one the next day.

11. The local library has a wealth of resources for home and lawn care advice.

I know nothing about gardening. My mother and mother-in-law both have green thumbs, but now I have to put to the test whether that trait is genetic. I started by going on Pinterest to find some information on composting and some other gardening basics, but the best resource I found was the local library. Here’s why.

Every gardening book will tell you that lawn care and plant selection are dependent on knowing your environment. I found that our local library had at least a dozen books on the local climate and what grows best in the state. I don’t have the results of my efforts yet, but I would highly recommend hitting up your local library before you start a gardening project— it’s free (just remember to return your books on time!).

12. My credit score actually improved once we got a mortgage.

When I first applied for a mortgage, my credit score took a small hit because of the inquiry on my report. (I check my credit scores for free on Credit.com every month so I was able to see the impact almost immediately.) But, just a few months later, my scores are the highest they’ve ever been. Adding an installment loan to my credit history and a positive payment history has improved my score more than 25 points already, and I’m just a few months into homeownership. I would never recommend buying a home just to improve your credit, but I was surprised at how much it impacted me.

13. Renting is so much easier. 

There are a lot of things I learned in just my first few months of homeownership, but the overarching lesson is that renting is way, way easier. There are so many things you don’t have to worry about when you rent. But— and this is a big “but”— it’s not nearly as rewarding as figuring out how to tackle the new challenges of owning a home. I was so proud of my work when I shoveled a foot of snow from my driveway. I looked at my yard and felt accomplished when we cleared out all the leaves that first weekend. I still look at the re-painted room we’ve now settled into and marvel at all the work it took and how great it looks now. Plus, I’m building equity in my house— this is an investment for us as well. We plan to be here for a while (even though our closing attorney said we’d be back in 6-7 years ready for a new place). In the meantime, I plan to keep challenging myself with new projects. Next up: how to lay a paver patio.

More Money-Saving Reads:

Image: Sergey Peterman

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The 6 Reasons Your Budget Is Failing

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If you are not using a written budget (paper, spreadsheet or even an app), you are not alone. According to a 2013 Gallup poll, 1-in-3 Americans do not have a written budget. That means two-thirds of American households are operating without a plan.

Now, just because you may have a budget does not mean that it will work and you will be successful. To be frank, following a budget is not easy. If it were, we would see more people using one than trying to ignore it completely.

Even the most diligent people can have a tough time getting used to, and implementing, the spending constraints that are tied to a budget. This can cause those budgets to bust and quite often fail.

Why does this happen? Why is it that so many budgets never work? We’ve got six of the most common reasons budgets do not work.

1. The Budget Is Unrealistic  

Who wouldn’t love to spend just $50 a month on fuel and $200 on groceries? That would be incredible, wouldn’t it? However, that is not the way it works. You need to be completely honest about the numbers you include on your budget.

One of the easiest ways to do this is by creating and reviewing a spending plan. This simple form will help you analyze and track your real-life spending over the course of a month. So, while you might want to see that your budget shows $200 for groceries, if you are spending $550, your budget will not work. Be honest and make sure your budget truly reflects the way you shop.

2. Leaving Items Off

When planning out a budget, did you remember that you have that birthday next week? What about needing to purchase new tires for your vehicle? You need to make sure that you are accounting for every expense that might come up over the course of the month.

Take time at the end of each month to look ahead and determine events and things coming up, such as the vacation or birthday. It may be time for insurance premiums to be paid. Make adjustments to the next month’s budget (but if you are really smart, you are already saving for these each month, and the payments can come from your savings account rather than your budget).

3. Overspending

This is very common for many people. The reason is that once you actually see the expenses lined up next to the income, you are spending more than you make. This means you have to make changes to your budget.

You may need to scale back on dining out or entertainment. It could be extreme enough that you need to cut expenses, such as cable, directly from your budget.

The issue is that many do not want to do this. They just can’t. If you are spending more than you make, your budget will never work. You must change your spending habits in order to have a successful budget.

4. Not Monitoring Your Budget

A budget is not a “one-and-done” financial goal. A budget is always changing to due to income fluctuations, life events and more. Your budget will need to be checked frequently to make sure it aligns with your needs.

A great way to do this is to update the budget monthly. There are times when adjustments will not be needed, but other times, you will need to tweak it. You might find that you are budgeting $500 for groceries, but costs have gone up and so now you spend $575. That means you have to fix the budget to stay in line with what you need.

(Just like your budget, monitoring your credit report should be a priority. You can also keep an eye on your credit scores for free every month on Credit.com to track where you stand.)

5. Forgetting Emergencies  

Life has a funny way of throwing curveballs your way when you least expect it. What happens if the furnace goes out or your son breaks his arm? These items are not on your budget and there was no way to plan for them.

This is why you must have an emergency fund. Money needs to be set aside each month to cover these expenses that come up. That means you need to add it as a line item on your budget and always save so you don’t blow your budget in these moments.

6. Not Giving It Enough Time 

If all professional athletes quit practicing after just one month, we would have no professional sports. The same is true with your budget. If you quit when it gets hard or don’t really try, then you are destined to fail.

Instead, keep in mind that the first three or four months are going to be rough. These are the months when you are going to have to make a lot of changes to the budget so that it will work for you. Once you get through this period, it will get easier and you will be glad you did not quit or give up.

A budget is not fun. If it were everyone would have one. They would work perfectly. No one would fail. However, that is not reality. It takes a lot of hard work and dedication, but when you stick to it, the rewards will be worth it.

More Money-Saving Reads:

Image: David Sacks

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Spring Cleaning: 9 Great Tools to Clean House & Start Fresh

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Image: gpointstudio

The post Spring Cleaning: 9 Great Tools to Clean House & Start Fresh appeared first on Credit.com.

Why Identity Thieves Target the Dead

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Q. My parents both died years ago, but I still get lots of mail for them — credit card offers, junk and other stuff. Do I need to worry about someone stealing their identities? What should I do?
— ID theft-worried

A. The dead can still be victims of identity theft.

This is known as “ghosting.”

“Scammers of the sweet hereafter case obituaries like burglars check out houses and often your identity is more vulnerable when you pass on than when you are alive – because no one thinks about scams involving the dead,” said Adam Levin, co-founder of Credit.com and IDT911 and author of “Swiped: How to Protect Yourself in a World Full of Scammers, Phishers, and Identity Thieves.”

There are a few items you should check related to your parents’ deaths, said Levin, a former head of the New Jersey Division of Consumer Affairs.

First, see if the Internal Revenue Service received a copy of their death certificates. That’s because every year, the IRS says, scammers and identity thieves steal the identities of more than 2.5 million deceased Americans.

Levin said you should find out if your parents’ executors sent copies of the death certificates to the credit reporting agencies, asking that they put a “deceased alert” on the decedents’ credit report.

You should also see if you can get copies of your parents’ credit reports.

If none of those steps were taken, you can now notify the appropriate agencies.

You can also act to opt out of receiving junk mail. Try OptOutPrescreen, which is run by the credit bureaus. You can cut down on offers for insurance and credit there.

Then try the Direct Marketing Association’s (DMA) Mail Preference Service (MPS), which will opt you out of receiving unsolicited commercial mail from many national companies for 5 years.

In general, Levin said, consumers need to beware of the damage obituaries can cause when the wrong people learn about someone’s death.

Less information is more protection, he said.

“Identity thieves salivate over the prospect of obituaries chocked full of personal information that will give them the building blocks they need to present themselves as the next incarnation of the deceased: date of birth, address, mother’s maiden name, family members, favorite pets, memberships in religious, public interest and charitable organizations and other personally identifying information,” Levin said.

When someone dies, you should get at least 12 copies of the death certificate, Levin recommends. You will need this for the credit reporting agencies, creditors and certain government agencies.

Then send one to the IRS and to each of the three major credit bureaus, requesting a “deceased alert” on the decedent’s credit report.

You can then arrange with each credit bureau to get a copy of the decedent’s credit report to review for lists of accounts and credit card activity, Levin said.

If you have evidence of fraud — collection notices, bills or something fishy on a credit report — you should notify the police in the deceased’s jurisdiction, Levin said.

“If there is a surviving spouse or other joint account holder, make sure to notify any credit card company, financial services institutions, brokerage firms and lenders — especially mortgage companies — of the death,” Levin said.

[Editor’s Note: Remember, it’s important to keep an eye on your credit, too, for signs of identity theft. You can do so by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your free credit report summary, updated each month, on Credit.com.]

More on Identity Theft:

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The post Why Identity Thieves Target the Dead appeared first on Credit.com.

Review: MetLife Identity Theft Protection

Pickpocketing at the subway station

Instances of identity theft are trending upward. From 2012 to 2014, the number of U.S. residents that experienced identity theft increased by 1 million. So, its no wonder identity protection products are becoming more and more popular.

MetLife offers identity theft protection at no cost for customers that have MetLife auto, home or renters insurance coverage. The product is broken down into two parts, identity protection and restoration. Identity protection is in place to help prevent theft while restoration helps you recover from theft if it happens.

At one point, MetLife also offered an identity monitoring product called MetLife Defender. However, at this time, it looks like MetLife is no longer accepting new enrollment for it.

So, let’s discuss the identity protection services for MetLife customers.

[Worth It or Not? Identity Theft Protection Reviewed]

How MetLife Identity Protection Works

MetLife provides a suite of specific services to help keep your identity protected in certain situations. If you’re active-duty military, MetLife will put an alert on your credit report for a year while you’re abroad. You can also extend the alert if necessary. The purpose of it is to safeguard you from identity theft while you’re away.

Another facet of the service is travel protection. Adventures in foreign places are fun, but tourists are also easy targets for scams and theft. If any of your personal items like your passport or credit card are stolen or lost during a trip, you can contact a fraud specialist at MetLife who will help you cancel or replace them.

Children are just as susceptible to identity theft as adults. If your child’s identity is misused, a MetLife fraud specialist can submit a credit suspension in your child’s name.

Other than stealing information to get ahold of your funds, identity theft for medical care is common. If your identity is used to get medical services and medications, MetLife will help you contact your service providers and insurance to clean up your records. This is important for your own safety. If you need medical care, you don’t want someone else’s medical history popping up. And, of course, you don’t want to get stuck with another patient’s medical bills.

MetLife will also help you through relocation paperwork such as switching over your mailing address and handling mail forwarding. There’s a lot of moving parts when you relocate, so assistance in this area for free is something MetLife customers can appreciate.

Finally, if a loved one passes away, MetLife will help you to go through the final details of closing accounts and pursuing death benefits.

The MetLife Identity Theft Restoration Service

What stands out in this free product is the identity theft restoration service because technically you can do all of the above on your own. However, recovering your identity after it’s stolen is challenging.

If your identity is compromised, MetLife fraud specialists will help you file police reports. They’ll also assist you in reporting theft to credit bureaus. Plus, MetLife will give you a year of free credit and fraud monitoring along with complimentary credit reports from each credit bureau. Not a bad deal.

If you think your identity has been stolen, MetLife instructs customers to call the auto and home insurance line. From there, you’ll get connected with a fraud specialist.

Transparency Levels

There’s no way to completely prevent identity theft in this digital age. A company that promises you otherwise is being too optimistic. Find out more about how to decide if you should trust an identity theft protection company in our guide.

MetLife does make it pretty clear that the service is intended to provide you solutions to help you avoid identity theft and restore your accounts if you notice suspicious activity. It does not guarantee to prevent an assault on your identity altogether.

Other Identity Theft Alternatives

If you don’t have auto or home insurance with MetLife, here are a few other options for identity protection:

Zander

Zander has two plans. Both include $1 million in reimbursement for charges incurred while recovering your identity. It also comes with personal information monitoring, unlimited recovery services, child information scans, one-on-one support and more.

The $1 million reimbursement benefit covers costs like lost income, legal fees and other expenses necessary to repair identity theft like replacing documents or getting credit reports. Here’s the cost of both plans:

  • Individual Plan – $75 per year or $6.75 per month
  • Family Plan – $145 per year or $12.90 per month

To clarify, the lost income doesn’t cover money stolen from you by thieves, but the lost wages incurred by needing to make court appearances or other errands related to cleaning up your identity.

Read more about Zander here.

Identity Force

Identity Force offers monitoring and restoration services with two tiers as well. Both packages include monitoring your personal information in public records. There’s also alerts for bank or credit card activity that’s out of the ordinary so you can catch it before too much damage happens. Here’s the cost of both plans:

  • UltraSecure – $179.50 per year or $17.95 per month
  • UltraSecure+Credit – $239.50 per year or $23.95 per month

The difference between the premium and basic plan is the UltraSecure+Credit package includes daily credit report monitoring from 3-bureaus and monthly credit score tracking.

MetLife Customers Can’t Beat Free

The best defense for identity theft is staying aware and taking swift action if you notice anything suspicious. If you’re a customer of MetLife and qualify for this product it make sense to use it.

Keep in mind, MetLife doesn’t offer credit monitoring and reports unless your identity is compromised. If you’re a MetLife customer looking for ongoing credit monitoring, you can sign up for free sites like Credit Karma and Credit Sesame to get alerts every time there’s a change to your score or report. You can also get your free credit report once a year at www.annualcreditreport.com.

 

 

The post Review: MetLife Identity Theft Protection appeared first on MagnifyMoney.

3 Toxic Money Friendships to Be on the Lookout For

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Money can be a tricky topic when it comes to friendships. If you make highly different amounts than your friends, it can be uncomfortable to have to turn down invitations to fancy dinners and fun road trips because they don’t fit in your budget. Or if your friends are simply more free-flowing with their cash, it can be tiresome to have to explain again and again why you don’t want to blow another $60 on eating dinner out for the third time this week when you’re trying to save up to visit your cousin in California in a couple of months.

We always try to give our friends the benefit the doubt, but for as much as we sometimes don’t want to admit it, sometimes friendships can just be plain toxic when it comes to finances. Knowing what to be on the lookout for and how to react to them will help you deal with situations that arise in the future. Here are a couple common toxic money friendship patterns, and how to handle them.

Toxic Friendship No. 1: The Big Spender


What it looks like:
Whether or not your friend actually has the money to spend doesn’t seem to matter — she just loves to buy, buy, buy, and that’s really all there is to it. If you feel forced more often than not to participate in shopping splurges and expensive meals out with you friend (or friends), this could a Big Spender Toxic Friendship.
How to avoid it: Depending on how close you are with this friend, you could always just try being honest. Say something along the lines of, “I’m really trying to stay within a budget these days, so unfortunately I can’t afford to always go shopping or eat out with you. I’ll try adding at least one meal and one shopping trip a month into my budget, though, so we can still do fun things together.”

Toxic Friendship No. 2: The Friend Who Never Picks Up the Tab 

What it looks like: Whether or not you and your friend make drastically different salaries, friendship is a two-way street and you shouldn’t have to pay for everything you do with your friends. If you’ve started to notice that more often than not you’re the one paying for movies, meals and outings with a particular friend — without this friend even so much as offering to help pay — this could be a Friend Who Never Picks Up the Tab Toxic Friendship.

What to do: First, have a heart-to-heart with yourself. If you know that you make more money than your friend and picking up the tab when you do things together really doesn’t bother you and helps avoid an awkward money conversation, then it may be worth letting go. (Although even if this case, it still would be nice for your friend to at least acknowledge your generosity.) If, however, the two of you make relatively the same amount of money, or you don’t even know what your friend makes but you just don’t feel like you should have to pick up the tab every time you go out, it’s time to have the conversation. Say something like, “I’ve noticed the past couple times that we’ve gone out that I’ve paid. I’m happy to pick up the tab every now and then, but unfortunately I really can’t afford to do it all the time. If things are a bit tight right now, I’d be more than happy to do stuff together that’s free or that costs less.”

Toxic Friendship No. 3: The Friend Who Makes You Feel Uncomfortable About Her Money Views

What it looks like: This one can be tricky, because we’re all about being open and honest about money, but there is a fine line between open and honest and sharing too much. If your friend just likes to talk to you about her recent raise, how she hates how much she pays in rent or the fact that she probably shouldn’t have bought that expensive dress but did anyway, this probably isn’t a toxic money friendship. If, however, every last thing out of her mouth seems to be bragging about how much money she makes, how much she spends on stuff or is in some way derogatory about other people’s financial situations, this is probably a Friend Who Makes You Feel Uncomfortable About Her Money Views Toxic Friendship.
What to do: Assuming this is a friend you still want to have around in your life, unfortunately it’s time to speak up again. If this is a relatively new pattern in your friend, you might say something like, “I’ve noticed lately that you seem to be talking about money a lot, which feels different to me. Is everything okay?” Angling your complaint in a way that makes your friend feel like you really care about her is one way to keep her from automatically going on the defensive. If, however, this is a pattern with a friend that you simply can’t take any more, try something like, “I know in the past I’ve always been fine with how you talk about money, but now that we’re older it actually makes me uncomfortable. Would you mind toning down the money talk, at least when we’re together?”

Having a conversation with friends about money can be uncomfortable even in the best of situations, but if you’re in a toxic money relationship with a friend, unfortunately opening your mouth and voicing your opinion is really the only way to (hopefully) fix the situation.

The post 3 Toxic Money Friendships to Be on the Lookout For appeared first on MagnifyMoney.