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All Contents © 2019The Kiplinger Washington Editors
By the editors of Kiplinger's Personal Finance
| August 1, 2018From Kiplinger's Personal Finance
The end of summer, when job and school routines kick back in, is a great time to kick your financial life into gear, too.
We’ve made it easy with our roster of quick financial tips designed to save you money, get you on track to reach a goal or simplify your life. The suggestions run the gamut from automating investments to setting up a budget to thwarting identity thieves. Each tip will take only 15 or 30 or — max — 60 minutes.
After years of bull-market gains, you might have more of your assets in stocks than you should. Find out by visiting Personal Capital (www.personalcapital.com), an online advisory firm that will manage your portfolio for a fee but also provides free tools for do-it-yourselfers. Link your investment, bank and credit accounts and the site will give you a broad view of your finances. Under the Planning tab, click on “Investment Checkup.” After you answer some simple questions about your investing goals, the site will suggest a target allocation, which you can compare with what you currently have.
Once you’ve linked your accounts on Personal Capital, go back to the Investment Checkup tool and click “Costs.” You’ll see what you pay in fund fees as a percentage of assets, broken down by investment account (at any firm) or for your entire portfolio. For comparison, the average expense ratio for a typical diversified U.S. stock ETF is 0.38%, and it’s 1.10% for the typical actively managed diversified U.S. stock fund.
Dividend-paying companies often disburse payments every three months—which can lead to dry spells for income investors when different stocks pay out on the same schedule. Some brokerages, including E-Trade, Merrill Edge and Schwab, have a tool that maps out your next 12 months of dividends. Otherwise, go to www.nasdaq.com and enter your stock holdings. If you want to add stocks that pay out in months that look sparse, see 7 Top Monthly Dividend Stocks and Funds to Buy. You can check payout dates for most U.S. stocks at www.nasdaq.com/dividend-stocks/dividend-calendar.aspx.
Investing app Acorns helps you reach your financial goals using the money you would otherwise toss in your coin jar. Link a credit or debit account, and every time you make a purchase on that card, Acorns will round your purchase up to the next dollar and invest the difference in a portfolio of ETFs consistent with your investing style and needs. You can also make automatic contributions from linked bank accounts. A typical user invests $50 to $60 per month, including rounded-up and automatic investments, says CEO Noah Kerner. Acorns charges $1 per month but waives the fee for students who set up an account with an “edu” e-mail address.
Keep up with the day’s stock market moves at Finviz. You’ll see a heat map of stocks in Standard & Poor’s 500-stock index, arranged by sector. Green stocks are up, red are down, with the ticker symbol and percentage change displayed. You can also choose to view world stock markets or exchange-traded funds. Click on “News” to see the latest business news and selected blogs, too.
With the bull market in its 10th year, the market is rife with attractive stocks—if only their shares were a bit cheaper. But investors looking to “buy the dip” needn’t eye the market constantly. Most major brokerages will allow you to create watch lists and set alerts for your favorite stocks. Fidelity investors, for instance, can receive alerts via e-mail or text when a stock on their watch list moves up or down by a certain percentage or advances above or falls below a certain price. If you’re looking to lighten up rather than buy, take some profits when a stock hits your target price.
Even if you can spare only a small amount of cash each month, having regular, automatic transfers from your checking account to your investment account will put you on the path to achieving your goals. Plus, you’ll hardly miss the money if you pay yourself first—that is, shave it from the top of your paycheck. Log in to your brokerage firm’s website and look for instructions on setting up transfers; you’ll need to enter your bank’s routing number, your checking account number, and the amount and frequency of each transfer. (You can also go to your checking account to set up the transfer—but watch out for fees the bank may charge for external transfers.)
You should hold on to your tax returns indefinitely, but you can shred W-2 and 1099 forms plus canceled checks and receipts for charitable contributions after three years. If you’re self-employed, you can shred receipts for business income and expenses after six years. Keep home purchase documents for three years after you’ve sold your home. To convert paper documents to electronic files, use a scanner; the IRS accepts digital copies. And while you’re getting organized, track down documents you may need later, such as Form 5498 from your financial institution, which shows nondeductible contributions to your IRA. Otherwise, you could end up paying taxes on those contributions when you take withdrawals.
Thanks to the new tax law, the amount of money your employer withholds from your paycheck may no longer line up with how much you owe the IRS. You could be paying more than you should now, or you could be paying too little and end up with an unexpected tax bill next spring. Gather your most recent pay stub and your 2017 tax return and run your numbers through the withholding calculator at www.irs.gov. If you need to make adjustments to your withholding, file a new W-4 form with your employer.
Couples can budget as a team using You Need a Budget ($84 per year). Start by syncing your bank and credit accounts (or entering the balances manually) and deciding how to allocate your dollars over the course of the month using YNAB’s categories or your own. YNAB aims to distribute all of your income between monthly expenses and longer-term goals (including savings), so you can handle large, unexpected expenses more easily. Or link all your financial accounts to Mint (free) to track both your budget and upcoming bills. Your bank or credit union may also offer free budgeting tools.
To ensure that you have enough in the bank to cover your monthly bills—and to avoid cluttering your calendar with multiple due dates—call each biller and ask whether you can change the due date to best align with your cash flow.
Whether you want assistance with a specific task or a full-fledged strategy for your money, a financial planner can help you get on track. At www.napfa.org, you can search for fee-only advisers in your area and filter by specialty, such as high-net-worth clients or tax planning. If you want a one-time checkup, look for fee-only certified financial planners at www.garrettplanningnetwork.com, whose members charge by the hour. Choose three or four planners and make appointments with each so you find the best fit.
Loading your payment cards onto a digital wallet will lighten your leather one—or provide a handy backup if you accidentally leave your plastic cards at home. Tap and pay at the store with apps such as Apple Pay, Google Pay and Samsung Pay. With Apple Pay or Google Pay, the payment terminal must have near field communication (NFC) technology, but Samsung Pay works with most magnetic-stripe readers as well as NFC terminals. You can also use Google Pay, Samsung Pay and Apple’s Wallet apps to store and use loyalty cards, or try a separate app such as Stocard or Key Ring.
At MissingMoney.com, see whether assets such as old bank accounts, stocks and bonds, utility deposits, or insurance policies have been turned over to the state. (If your state does not participate with MissingMoney.com, go to www.unclaimed.org for a link to your state’s web page for unclaimed property.) Search in states where you’ve previously resided and under former surnames, too, as well as for the names and states of your family members.
Recheck the beneficiaries on your retirement, savings and investing accounts, life insurance policies, and health savings accounts to make sure your assets go where you want them to. With most accounts, you can accomplish this online: Log in to your account provider’s website and poke around to find the beneficiaries tab (most likely in the account settings or profile section). For your brokerage account, you may need to search for a “transfer on death” form to print and sign. If your spouse isn’t your retirement account beneficiary, he or she may need to sign a consent waiver. If you’re updating beneficiaries for a pension or group life insurance policy, ask the human resources department if this info can be updated online.
A living will lets your medical providers—and your loved ones—know your wishes at the end of your life, and a health care proxy designates the family member or friend who can make decisions in a medical emergency if you aren’t able to. These two documents go hand in hand. The American Bar Association has resources to help with a health care proxy, and so does www.caringinfo.org, which has state-specific forms. Sign the health care proxy and living will and give the documents to your health care providers.
Ask all of the banks you do business with whether they will redeem your savings bonds; many banks require you to be a customer for at least six months. Or you can mail them to the Treasury Retail Securities Site, P.O. Box 214, Minneapolis, MN 55480 (see the factsheet at TreasuryDirect.gov for information about the procedures). To make the process easier in the future, convert your savings bonds to electronic bonds. That way you can redeem them online when you’re ready.
Head off haggling over who owes what after dinners out with friends. With Splitwise (free online or as an app for Apple and Android phones), you can split expenses, track IOUs and balances, and settle up anytime using PayPal or Venmo (you can also record cash payments). Create a group, enter a bill and select the people involved; Splitwise will do the math. It keeps a running total, so you can pay what you owe in one big payment instead of several small ones.
If your bank covers a checking-account overdraft, you could pay a fee of $35 or more. Instead, set up an automatic transfer from a linked savings account to your checking account in case you overdraw. If you must pay a transfer fee, it’ll likely be $5 to $15. And rather than pay up to $3 to transfer money from your account to an account outside the bank, sign up for a free peer-to-peer payment app. With Zelle, for example, you can send money from your bank account to recipients at other banks in minutes. (At least one member of the transaction must have an account with a bank or credit union that is a Zelle participant.)
If you have a high-deductible health insurance policy, you can likely tap the triple tax benefits of a health savings account: Your contributions are tax-deductible (or pretax if made through your employer), the money grows tax-deferred, and it can be used tax-free for out-of-pocket medical expenses—now or in the future. If your policy has a deductible of at least $1,350 for self-only coverage or $2,700 for family coverage, you can contribute up to $3,450 a year to an HSA for individual coverage or $6,900 for family coverage in 2018, plus an extra $1,000 if you’re 55 or older. You can’t contribute after you’re on Medicare, but you can use the HSA money tax-free to pay Medicare Part B, Part D and Medicare Advantage premiums after age 65, in addition to other medical expenses. If your employer doesn’t offer a plan, check HSASearch.com for a list of HSA administrators. Look for a plan that has low fees and lets you invest HSA money in mutual funds for the long run, which will give you the biggest tax benefits.
Your credit card issuer may provide a free credit score (see 10 Little-Known Perks). Or you can use a free online tool such as CreditKarma.com or FreeCreditScore.com. To help nudge that number upward, reduce your credit utilization ratio—the amount you owe on your credit cards compared with the total limit. Ask your credit card issuer to raise your limit (either by phone or by filling out a request form on the issuer’s website). You may need to supply your income and other details, such as your occupation or your monthly housing payment. Most decisions are instantaneous.
Retrieve your credit reports from the three major credit agencies (Equifax, Experian and TransUnion) free once per year at www.annualcreditreport.com. Review each report for errors or signs of identity theft, such as a loan you never opened. Then sign up for services that regularly scan your credit reports for changes that may indicate identity theft and that send you alerts of those changes through a mobile app or e-mail. Among free services, Credit Karma monitors your Equifax and TransUnion reports, and Experian’s tool at www.freecreditscore.com keeps tabs on your Experian report. For paid services that offer more-robust monitoring, see These Services Alert You to Identity Theft. Are They Worth It?
Rather than accept a late-payment penalty or fee, call your credit card issuer and ask for forgiveness. A 2018 poll from CreditCards.com found that 84% of those surveyed who asked for a break had a late fee waived, 70% had an annual fee waived or lowered, and 56% received a lower interest rate when they asked their issuer. Point out your consistent payment history, frequent use of the card or anything else that may help your case.
You could be missing out on lucrative rewards and initial bonuses. A couple of our favorites: Citi Double Cash offers 2% cash back on all purchases (1% when you buy and 1% when you pay the bill), and Chase Sapphire Preferred ($95 annual fee, waived the first year) pays back two points per dollar spent on travel and dining and one point on everything else, with flexible options to redeem points for travel and other Purchases. (For more top picks, go to The Best Rewards Credit Cards, 2018.)
Log in to your online credit card account to turn on payment reminders via text or e-mail so you don’t miss your due date. While you’re at it, look for other alerts that may be useful to track your activity and curb overspending, such as notifications when your balance exceeds a certain amount or a purchase goes through.
Run a checkup on your home wireless network to keep hackers at bay; consult the router’s manual or go to the manufacturer’s website to get instructions. Turn on network encryption and the firewall, and change the router’s default network name and password. If you use a smart device—say, an Amazon Echo or Google Home speaker or a Wi-Fi-connected home-security system—create a second network for it that’s separate from the one you use for your PCs and laptops. If snoops crack into the device on the second network, they’ll have a harder time seeing activity on your computers.
Review the settings and security pages for each of your social media accounts to limit how widely you share your information with friends, the public and advertisers. On Facebook, you can use options on the settings menu to share information only with specific people, exclude your profile from search engine results outside of Facebook, opt out of facial recognition and put the kibosh on ads served up based on your online activity. For more on how to protect your Facebook data, see Take Steps to Protect Your Facebook Data.
On the AwardWallet app or at www.awardwallet.com, enter your log-in information for each account, including credit cards, retail stores, hotels, airlines and other travel carriers. (With Delta Air Lines, United Airlines or Southwest Airlines, you can only have e-mail statements from the programs automatically forwarded to AwardWallet.) You can view your points or miles balance for each program at a glance on the Accounts screen. AwardWallet alerts you when rewards are about to expire or when balances change.
A credit freeze, which blocks new lenders from viewing your credit reports, is the most effective way to prevent thieves from opening new credit accounts in your name. And by September 21, the credit agencies must allow you to place and lift a freeze free. You have to contact each agency to set up a freeze; for step-by-step instructions, see Freeze Your Credit in 3 Steps.
Now that its merger with Time Warner is complete, AT&T is offering unlimited wireless plans that include free access to more than 30 channels of live TV, including CNN, TBS and AMC, as well as 15,000 shows and movies on demand. Customers with other wireless plans can pay for the service, called WatchTV, for $15 a month, which makes it the cheapest streaming service available.