As 2023 draws to a close and we prepare to usher in 2024, take a moment to go through this year-end financial checklist to ensure your finances are in order before the start of the New Year.
1. Review your budget
Is your monthly budget still working well for you? Are you stretching some spending categories or finishing each month in the red? Take some time to review your budget and make any necessary changes.
2. Top off your retirement plan
If you have a 401(k), check to see that you are taking full advantage of your employer's matching contributions. If you haven't contributed as much as you can, you have until the end of the year to catch up, to a limit of $19,500. If you have an IRA, you have until April 15th to scrape together the maximum contribution of $6,000, with an additional $1,000 if you are 50 years or older.
3. Check your progress on paying down debt
Give your debt an annual checkup by reviewing your outstanding debts from one year ago and holding up the amounts against what you now owe. Have you shed debt from one year ago, or is your debt growing? If you've made no progress, or your debt has grown, consider taking bigger steps toward paying it down in 2024, such as consolidating your debt with a personal loan from Market USA
4. Get a free copy of your annual credit report
The end of the year is a great time for an annual credit checkup. You can only request a free copy of your credit report from all three credit reporting agencies once a year. Get your annual credit report here, and look for fraudulent charges and other signs of possible identity theft. If you find any wrongful charges, be sure to dispute them immediately.
5. Review your investments and asset allocation
Take some time at year's end to rebalance your portfolio and to see if your asset allocation is still serving you well. You may need to make some changes to your mix of stocks, bonds, cash and other investments to better reflect the current state of the market.
6. Review your beneficiaries
Has your family situation changed in the past year? If it has, be sure to switch the beneficiaries on your accounts and life insurance policies to accommodate these changes.
7. Review your tax withholdings
Review your W-4 to see if the amount of tax being withheld from each paycheck needs to be adjusted. If you're not a numbers person, ask your accountant for help. Changing up the numbers just a bit can make a significant difference in your tax bill at the end of the year. Or, if you usually get a large refund, adjusting the amount withheld can mean enjoying a larger paycheck throughout the year instead of giving the government an interest-free loan to be paid back in one lump sum at year's end.
Are you still paying off last year's holiday gifts, even as you draw up a new gift list for this holiday season? If so, you're not alone.
Nearly 3 in 4 holiday shoppers plan to use a credit card this year, according to the 2023 Holiday Shopping Report by Nerd Wallet. The personal finance site had the Harris Poll survey 2,000 U.S. adults on their purchasing plans for the winter holidays. Nearly a third of those respondents still haven't paid off last year's balance.
Don't beat yourself up for racking up too much debt in the spirit of the holidays last year. Use these tips to start the New Year with a bounce in your step instead of a worrisome debt burden on your back.
1. Create a holiday budget
If you want to stay out of holiday debt, create a budget with a strict limit of how much you want to spend for holiday gifts - then stick to it. If you start getting carried away and feel that you can't control your online or in-store holiday spending, close the laptop or phone screen or walk out of the big-box store before the next holiday song blasting makes you spend even more.
2. Drum up some extra income
Nobody wants to put in even more hours over the holidays. But taking a part-time job or side gig for even one or two months to supplement your full-time income could mean you earn enough to cover your entire holiday gift list, or at least a good portion that you'd otherwise have to charge to a credit card.
3. Cash in credit card rewards
If you've used your cash-back credit card(s) all year long (paying them off each month, hopefully), you likely have a tidy reward sum available that you can use towards a statement credit on items charged on those cards over the holidays.
Just make sure that you charge only what you can cover with cash back rewards - and apply those rewards to your next credit card statement.
4. Become a sales hound
This year, don't allow yourself to buy anything that's not on sale. Check on the items you want daily, watching for sales, discounts and coupons.
5. Don't buy in-store before price matching
Many retailers will match their website's online prices on items that are priced higher in the store. Once you price match a few times, you'll be amazed at how often the online price is lower than the in-store price tag. Before you begin holiday shopping, check out your favorite retailers' price match policies. Then check in-store prices on your phone when shopping in person.
6. Whittle down your gift list
Nobody wants to look like the Grinch when the holidays roll around. But making some ruthless cuts on your usual gift list is in order if you want to avoid going into holiday debt. Before you make those cuts, however, let the people that you usually exchange gifts with know that you're working hard on not going into holiday debt and would prefer not to exchange gifts this year. If someone is so prickly that they're offended by your efforts to be more financially responsible, that's their problem.
Managing money responsibly doesn't just happen. Even with the best of intentions, many people make mistakes in how they handle money - and they don't even realize it. But there's good news! Harmful behaviors can be unlearned. Let's look at three common money mistakes and how to fix them.
It is common for people to go about everyday living without a whole lot of thought toward their money. They may not know how much they have in their checking and saving accounts. They could also jam their heads in the sand when it comes to their outstanding debt. Awareness of how good or bad their credit score is? Forget about it! The hard truth, though, is that ignoring money can lead to big-time consequences, like excessive debt, missed payments and zilch in savings.
The fix:To avoid this mistake, assess your income, expenses and savings on a regular basis. Creating a budget can help you get a handle on your financial inflows and outflows, which will enable you to make informed decisions about your spending habits. By confronting your financial situation head-on, you can identify areas where you can cut back, save more and, best of all, achieve and maintain financial wellness.
The second common money mistake is a lack of a financial plan or goals. Without an established money vision, it can be challenging to make smart money choices. You may find that you slip into negative financial habits when there are no goals to keep you in line. These poor habits include (but are not limited to) spending impulsively, accumulating unnecessary debt or failing to save for your future.
The fix:Establish short-term and long-term financial goals. Whether it's saving for a down payment on a house, starting a business or planning for retirement, having a clear vision will guide and motivate all your financial decisions while ensuring they're choices you can live with for years to come. To make it easier, break down your goals into actionable steps, such as setting aside a specified amount of money for savings each month or investing in assets that align with your long-term plans. A vision will provide you with motivation, purpose and a sense of control over your financial future
The third common money mistake is failing to talk about money with one's life partner. Money is a sensitive topic, and many people believe they can avoid arguing over money by not talking about money. Unfortunately, though, not talking about it can lead to misunderstandings, conflict and financial instability within the relationship.
The fix:Have open and honest discussions about money with your partner. By establishing open lines of communication, you can work together to create a joint financial plan that aligns with both partners' values and aspirations. Regular conversations about money can also help to build trust, ensure financial transparency and avoid surprises or hidden financial burdens down the road.
Money mistakes are common, but with some knowledge and proactive steps, you can easily avoid them.
Life is full of surprises, and some of them can be expensive. Whether it's a medical emergency, job loss, car repairs or any other unforeseen event, having a financial safety net can provide a sense of security and stability. Let's take a look at why it's so important to save for rainy days.
Stay out of debt
When life throws an expensive surprise your way and you don't have money to pay for it, you may fall into debt just to get by. On the flip side, if you had a well-padded emergency fund, you'd have the cash you need to fall back on in case of an emergency.
Be prepared for sudden unemployment
When you live paycheck to paycheck, your job is your financial lifeline. But no job is guaranteed to last forever. Your workplace may decide to downsize, close its doors or even to replace you with a bot. Or, you may find yourself unable to work due to personal circumstances. Having an emergency fund when you're gainfully employed can help you stay afloat should you suddenly find your lifeline is reduced or cut out.
Flexibility and freedom
Saving for a rainy day brings an element of flexibility and freedom to your life. It enables you to pursue new opportunities, take risks and make major life changes without the constant fear of financial instability. Whether it's starting a business, furthering your education or taking a sabbatical, savings provides the support you need to confidently explore these possibilities.
Peace of mind
Financial stress can take a toll on your physical and mental wellbeing. Constantly worrying about money can lead to anxiety, depression, strained relationships and more. Knowing you have an emergency fund prepared and on the ready for a rainy day can offer a sense of security and peace of mind.
Achieve long-term financial goals
Saving for a rainy day is not just about preparing for emergencies; it's also a stepping stone toward achieving long-term financial goals. Whether it's buying a house, starting a family or planning for retirement, having savings will help you stay on track.
Avoid economic downturns related to market fluctuations
The economy is subject to fluctuations, and financial markets can be volatile. During economic downturns or recessions, people will often face reduced job opportunities, pay cuts or decreased business revenue. However, an emergency fund can make a challenging economic climate easier to navigate. People who've saved up money for emergencies will be less reliant on credit cards and loans during such times, thus lowering their vulnerability to economic uncertainties.
If you don't have a well-padded emergency fund, start building one today! Most experts recommend having three to six months' worth of living expenses in your emergency fund. Review your monthly expenses to reach this number, and then make a plan for building up your fund until it's complete. You may want to prioritize your emergency fund over other investments until it's set up.
When the sun is shining, it's hard to believe the rain will come, but no one's life is all sunshine, all the time. Saving for a rainy day is a crucial part of financial wellness. Start saving today for a more secure and financially fit life.
Mortgage scams are prevalent and they can be hard to spot. Here's what you need to know about these scams.
What's a mortgage scam?
Mortgage scams deceive individuals who are involved in the mortgage process, including homebuyers, lenders and current homeowners trying to refinance. These scams exploit the complexity of mortgage transactions, buyer's inexperience and the emotional investment people tend to tie to their homes.
Types of mortgage scams
Avoid mortgage scams
Follow these tips to avoid falling victim to a mortgage scam:
Don't get mortgage-scammed! Follow the tips outlined here to stay safe.
Brought to you by KOFE, Knowledge of Financial Education
If you're like many people, you may have tried to build your savings, only to be thrown off course by unexpected expenses, a job loss, medical bills, or other circumstances that quickly drain your savings and cause you to rack up credit card debt to pay for it all.
When you have trouble saving money, the cause could be more than just a landslide of extra expenses. You may have never developed a "saving mentality", a mindset aimed at improving your financial picture by cutting monthly costs and building an emergency savings fund.
The good news is that developing a saving mentality to stabilize and manage your finances is easier than you think. Here are four tips for developing a saving mentality.
The first thing to do to develop a saving mentality is to create a budget based on your monthly income, expenses, and savings goals. That way, you can see where most of your money is going, make changes, and allocate a monthly amount to emergency or retirement savings.
Look for expenses you can cut such as streaming services you rarely use, overpriced snacks and drinks from convenience stores, ATM and cash advance fees, and online impulse shopping when you're bored.
To get started on a budget, track spending and look for monthly costs you can cut so you can deposit that amount into a savings account.
You've seen those giant fundraising, revenue, and sales goal thermometers that organizations display to motivate and keep track of financial milestones. So, why not draw your own thermometer with your initial savings goal at the top? As you grow closer to that goal, with each increment, fill in the bottom of the thermometer with red.
For example, if your savings goal is $1,000, and you make a deposit that brings your savings balance to $300, fill in the thermometer with red up to the $300 mark. Before you know it, you'll be at $500, $700, and eventually $1,000. Then draw a new thermometer that shows how much you've saved and has a new savings goal at the top.
Many employers match up to a certain percentage and dollar amount of your 401(k) contribution or up to a certain percentage of your annual salary. For example, if your employer matches up to six percent of your contribution and salary and you're making $40,000 a year and contributing six percent ($92) every two weeks, you can save nearly $2,400 in just one year - plus an additional $1,200 contributed by your employer.
If your employer offers a 401(k), enroll now to have a set amount deducted from each paycheck. If you never see that money as part of your monthly income, you may not even miss it.
You'd be surprised at how much money trickles away without thought with impulse purchases on items you don't need. Start paying attention when you buy things, asking yourself whether you even need them or whether there's a way you could buy them for less if you shop around.
Getting Your Finances Right Before the End of the YearBrought to you by KOFE, Knowledge of Financial Education
As the weather gets cooler, prices on consumer goods are still red hot due to inflation. Now is a good time to check in on your finances. If you focus on your income and expenses in the fall, you should be able to make it through the expensive holiday shopping season and start the New Year right.
To help you get started, KOFE has put together this fall financial checkup, so you can focus on all the points that need your attention right now.
Checking your credit reports is always a good idea. Studies show that consumer credit reports often contain errors that can damage their credit score. Start by getting free copies of the 3 big credit companies (Equifax, Experian, and TransUnion) and read through each report carefully. If you find any mistakes on your reports, you should dispute them immediately.If you've used deferment or forbearance on loans and credit cards, you want to make sure your accounts are current. Credit issuers are not allowed to report deferred payments as missed, but mistakes can happen. So, you want to check your credit reports to make sure all the information listed is accurate.
Expenses can change throughout the year, especially in the fall when most kids are headed back to school. This makes fall the perfect time to review your budget and make any adjustments you need before the end of the year.As you look at your budget numbers, consider the following: Are there any expenses you can cut or cut back on so you can free up more money for holiday spending? Are there things you're paying for that you don't use, such as subscription services that you've already binged your way through? Are you able to dedicate money to saving consistently, so you can continue building your emergency fund?
Housing has become one of the most burdensome expenses in anyone's life. Homebuyers are staring record high home prices in the eye; homeowners are dealing with an unheard-of increase in property tax and insurance rates and renters often struggle to meet their monthly payments.
If you are a homeowner...
As a homeowner, housing costs are usually fairly stable. However, with insurance rates and property taxes rising, not to mention record high levels of inflation, many homeowners are seeing higher costs than they anticipated.
The government has introduced several programs, such as the Homeowners Assistance Fund, to help people get back on their feet and help to catch up with past due payments. Recently the U.S. Department of Treasury has updated the guidance mandates to provide additional information on the reimbursement of certain qualified expenses. Make sure to take note of any changes as they could have a big impact on the funds available.
The best way to get informed is to talk to a HUD-certified housing counselor to receive housing stability counseling. Housing stability counseling is free, so if creditors are knocking on your door, make sure you know your options.
If you are a renter...
Traditionally, renting has been seen as the cheaper alternative to buying a home, with less responsibility and shorter commitments. The upward costs associated with owning a home have made renting seem even more attractive over two decades past.
But that doesn't mean renting is cheap by any means, and rental costs have sky-rocketed in many places over the past few years. The average cost of a one-bedroom rental has risen 39% in the last year alone. Coupled with the fact that 16% of low-income renters can't afford to make their full monthly payments, housing stability is becoming harder and harder.
Rental counseling can be a valuable resource. If you need assistance do not hesitate to reach out for help. We can connect you with counselors that are HUD-certified and will work with you to assess your financial situation, create a personalized budget, and much more.
Federal student loans are currently in automatic deferment and interest rates have been suspended. However, that all ends at the end of December 2022, and borrowers need to plan to resume payments in January 2023.
If you are worried you won't be able to make your payments once they start, don't wait to talk to your loan servicers. Ask about enrolling in an income-based repayment plan, which will match your payments to your income. This can mean you may pay nothing and avoid penalties if you are unemployed or underemployed.
It's also worth noting that if you can make payments now, you can pay off a significant portion of your debt. That's because with interest frozen, 100% of every payment you make will go towards paying down the principal debt you owe. That can give you a huge advantage in eliminating some of your student loan balances.
The stock market volatility caused by inflation meant a lot of people's retirement savings took a hit. You may have taken funds out of retirement savings to get through the challenges of this year. If so, you want to set a plan to pay those funds back into your retirement accounts as soon as possible.
Keep in mind that taking funds out of a retirement account means you also lost the growth on that money. So, if possible, you may want to up your contributions.
Even if you didn't withdraw any of your retirement funds, check in on your balances to see if you're on track. If you haven't used your free consultation with your plan advisor yet this year, schedule an appointment to meet with them before the end of the year. That way, you can talk about a strategy for allocating your funds the right way for 2023.
Remember all those great financial resolutions that you had at the beginning of the year? Now is the time to check in on them. The economic uncertainty over the past ten months may have gotten you off track, but there's still time to catch up. Look back at what you had planned for your finances this year. If you haven't made progress, now is the time to recommit to what you wanted to achieve.
If you didn't have any financial goals set for this year, then get started now. Do you want to buy a house or a car next year? Will you have another major purchase in 2023? Then it's time to start saving. If you want to improve your credit, download a free credit monitoring app and start tracking your score.
Insurance is more crucial now than it's ever been. You need to make sure you have adequate health insurance in case something happens. You also need to make sure you have adequate life insurance.
And, with all the storms raging across the country, you need to make sure you have the right insurance for your home, even if you rent. Review your policies to see what's covered and what's not. If you have questions, go to your KOFE portal to access the free coaching session and other financial tools anytime.
The homestead exemption can help you save a nice chunk on your taxes and offer other legal benefits. Following are answers to common questions regarding the homestead exemption.
The homestead exemption is a legal provision in a state's tax laws that reduces the property tax on a home, can protect a home from bankruptcy and provides rights to surviving spouses.A homestead refers to a dwelling that is inhabited by the homeowner. It can be a manufactured home, a condo or a three-story colonial, though the exact criteria will vary by state.
Eligibility requirements for the homestead exemption will vary by state. However, the principal qualifying factor in most states is that the homestead is the primary place of residence for the homeowner. Generally, the homeowner must be able to prove they have lived in the homestead on Jan. 1 of the taxable year to be eligible for an exemption.Some states make a general homestead exemption available to all homeowners who reside in the home. In other states, only senior citizens, surviving spouses of veterans and former military members and/or people with a disability can qualify. There may be income limits for the exemption as well. Other states establish qualifying criteria around the homestead alone. Still others, such as New Jersey and Pennsylvania, don't offer the homestead exemption for tax filers at all.
Most states have established a maximum amount for the exemption, which starts at just $5,000 and goes all the way up to $500,000. In Florida, the homestead exemption can be as high as $50,000, while Texans can write off $25,000 in a homestead exemption for school district taxes.The average homestead exemption amount in the U.S. is approximately $30,000 to $50,000.
Brought to you by KOFE, Knowledge of Financial Education
If you're like most Americans, you've probably noticed your grocery bills climb to crazy heights during the coronavirus pandemic. Over the past 12 months, all of the six major grocery store food group prices increased, according to the November 2021 Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS).
Prices for meats, poultry, fish and eggs rose 12.8 percent in 2021, with beef prices jumping the most with a 20.9 percent increase. Dairy product prices rose 1.6 percent. Other prices rose too, ranging from a 4.0 percent increase on fruits and vegetables to 5.7 percent for other foods.
Here are nine ways to cut your grocery bill despite rising prices.
That's where having a grocery list helps. Give some thought to your weekly grocery list to avoid making extra trips to the store, which can include impulse purchases that raise the bill.
Teaching your children how to be financially independent will help smooth the transition into adulthood. It will also give them what they need to stay financially stable throughout life.
Here are some tips for raising kids to be financially independent adults.
Another phone call, another scam.
It can sometimes feel like scammers have some kind of competition going to see who can hit you with the most robocalls in a day. In fact, according to Truecaller, scams and robocalls account for 67% of all phone calls in the U.S. Each American will receive an average of 28 of these calls a month. More than just an annoyance, scam calls cost 56 million Americans a financial loss in 2020.
One of the most common scams pulled off over the phone is the auto warranty scam. Here's all you need to know about this scam and how to protect yourself from falling victim:
How the scam plays out
In this ruse, scammers posing as representatives of a car dealer or manufacturer will call to tell you that your auto warranty is about to expire. The scammer will then segue into a pitch for renewing your warranty. During the call, you may be prompted to press a number to stay on the line, and then are asked to provide personal information to continue the process of renewing your warranty. If you follow instructions, you will be playing right into a scam.
How to spot a scam
It is possible for legitimate auto warranty companies to call you about purchasing or renewing a warranty. Look out for these red flags to help you pick out the authentic calls from the scams:
Follow these tips to keep yourself safe from auto warranty scams and similar ruses:
Alert the authorities
If you are targeted by a suspected scammer, you can alert the Federal Communications Commission (FCC) at the FCC Complaint Center. These calls likely violate telemarketing and robocall regulations, and by alerting the FCC, you can help them identify the scammers.
If the call you received involved fraud, you can also file a complaint with the Federal Trade Commission at ftc.gov.
Robocalls are incredibly annoying, but getting scammed is more than just an irritating experience. Follow our tips to protect yourself from auto warranty scams and similar ruses.
You probably already know how important your credit score is to lenders. When you apply for credit, your credit score helps lenders determine whether or not you are able to repay the loan based on your past financial performance. With a higher score, you qualify for better interest rates, lower payments, higher credit limits, and more types of credit than you would with a lower score.
Did you also know that your credit score can make it easier to rent an apartment, qualify for a good cell phone plan, and pay less for insurance? A higher score can save you hundreds, if not thousands, of dollars every year, which can add up to significant savings.
Not only can it hurt you financially, but many employers now check a potential employee's credit as part of the hiring decision. A low credit score could cost you a chance at your dream job.
There are no tricks or quick fixes to getting a good score. However, you can raise your score over time by demonstrating that you consistently manage your credit responsibly. Here are 10 things you can do to improve your credit score: