Friday, January 5, 2018

Countdown to Financial Fitness: Get Organized for Financial Fitness

Countdown to Financial Fitness: Get Organized for Financial Fitness: Lots of people include "getting organized" on their list of New Year's Resolutions. Getting organized—and staying organized—c...

Get Organized for Financial Fitness

Lots of people include "getting organized" on their list of New Year's Resolutions. Getting organized—and staying organized—can help you on the road to financial fitness.

Here are some examples:

1. Avoid unnecessary late fees and excess interest charges by devising a system for paying your bills on time. Sign up for autopay or manage due dates with an accordion file or spreadsheet. Designate a place for the mail and handle as it arrives so you don't lose a payment notice.

2. Keep a folder for credit card receipts. Open your statement promptly, reconcile it against these receipts, and look for irregularities. Most months everything checks out, but in the past, I've found augmented tips on restaurant bills and duplicate charges (the pre-tip amount, and then the entire bill rung up again to include the tip). Research charges for which you have no receipt, and report discrepancies as soon as you discover them. Dispute incorrect charges. Watch for transactions reported as cash advances instead of purchases; they begin accruing interest immediately, which then subjects you to interest on all subsequent charges until the account is zeroed out.

3. Review your bank and investment statements regularly. Watch for unauthorized activity, new fees for services that were once free, discontinued or reduced dividends, and any drastic changes in the performance of an investment.

4. Keep a folder for tax deductions, such as charitable donations (including purchases on behalf of a charity) and unreimbursed workplace expenses. If you drive your vehicle for business or to do charity work, maintain a log of the mileage. If you have a home business, keep a separate folder for expenses related to the business. Have trouble keeping track of paper? Scan your receipts and file them electronically.

5. Speaking of taxes, it's time to create a folder for forms you'll need to prepare your return. Companies will begin mailing W2s and 1099s by the end of January. If you have a mortgage, look for a 1098. Some mutual funds and brokerages include a 1099 with the year-end statement in December. Round up other deductible receipts such as property tax statements, vehicle excise tax receipts, charitable donations, etc. Review last year's tax return to determine if anything might be missing from this year's folder.
Organize your financial life so you avoid missing payment deadlines or overpaying accounts, and that you benefit from all legitimate tax deductions. With a little effort and attention to detail, you'll suffer less stress and unleash more money for the things and experiences that add value to your life.

What tips do you have for getting organized? I'd love to hear your comments.

Sharon Marchisello is the author of Live Cheaply, Be Happy, Grow Wealthy.

Thursday, December 28, 2017

Countdown to Financial Fitness: Mitigating Holiday Expense

Countdown to Financial Fitness: Mitigating Holiday Expense: Christmas is over, most of the financial damage from holiday spending is done. Here are some tips to help you get back on track: 1.     ...

Mitigating Holiday Expense

Christmas is over, most of the financial damage from holiday spending is done. Here are some tips to help you get back on track:

1.      Return unwanted gifts promptly. No use keeping something that doesn’t fit or cluttering your life with items you’ll never use. Turn them into cash or exchange them for something you really want or need. Many stores have restricted refund policies, so maximize the value of these new possessions by getting this task done as soon as possible.

2.      Return unused decorations and party supplies. Some stores have “all sales final” policies on seasonal items; if so, put these away where you’ll remember to use them next year. Holiday cards and wrapping paper will still be good for another Christmas. But maybe you bought extra cases of soda or bottled water for a holiday gathering, and now you’re stuck with more than you’ll ever drink? See if the store will take them back.

3.      Use gift cards promptly, before they get lost or the value expires. What if you received a gift card for a store or restaurant you don’t patronize? There are a number of websites where you can sell or exchange them online.

4.      If you received cash or checks as gifts, deposit the money right away. You can decide later if you want to treat yourself to something you really want, or use the funds to pay off holiday bills first.

5.      If you’ve put your holiday purchases on a credit card that offers reward points, see if you’ve earned enough to cash in. Redeem those rewards before they expire or the program changes and the benefits are devalued.

6.      Purge your holiday greeting card list. Update addresses that have changed since last year. If a card was returned as undeliverable, remove that person from your list until you make contact again. Next year, you’ll save yourself some cards, time, and postage.

7.     Clean out your closets, including unwanted gifts you can’t exchange. Pack everything up and donate it to a local charity. Get a receipt so you can take a deduction on your 2017 income tax return.

What tips do you have for mitigating the bite of holiday expenses? I'd love to hear your comments.

Monday, November 27, 2017

Countdown to Financial Fitness: Holiday Layoffs

Countdown to Financial Fitness: Holiday Layoffs: Maybe it's my imagination, but it seems like companies often choose the holiday season to announce their most massive layoffs. I suspec...

Holiday Layoffs

Maybe it's my imagination, but it seems like companies often choose the holiday season to announce their most massive layoffs. I suspect it has more to do with removing excess overhead from the books by the end of the year than with the desire to play Scrooge. Nevertheless, a pink slip can deal a devastating blow at a time when everyone should be celebrating... and when people are about to increase their spending.

What if you're one of those workers affected by end-of-the-year downsizing? Ho, ho, ho! Happy holidays.

First of all, don't put off applying for unemployment, a severance package, a pension, food stamps, or any other benefits you might be eligible for. The goal is to mitigate the upcoming losses to your income stream.

You might be tempted to wait until after the first of the year to apply for unemployment; after all, you're supposed to be looking for work to receive a check. Why not relax and bury your troubles in the holiday spirit? But you can send out resumes, register at online job search sites, and still meet the "looking for work" qualification. Chances you'll be offered a job that starts before the end of the year are slim, so you might still be able to enjoy your newfound time off.

If you're serious about finding new employment as soon as possible, take advantage of your network. The holiday season is an excellent time to reconnect. Accept invitations to social events or reach out proactively, and let your contacts know you're available. But keep an upbeat facade. No feeling sorry for your plight and dampening the holiday spirit.

Look for ways you can cut expenses. Perhaps some planned, but not-yet-paid-for holiday festivities could be trimmed. Instead of a full bar at your annual Christmas party, make a special punch and have some inexpensive wine, beer, and soft drinks on hand. Take guests up on their offers to bring something. If you haven't started your shopping, think about paring your gift list. For example, the boss and co-workers...

Don't automatically cancel a scheduled trip, especially if you'll incur hefty penalties for doing so. The vacation might be a welcome escape from the depressing drudgery of looking for work. But reduce the travel budget where possible: pack smartly, refrain from buying a lot of souvenirs, and cut back on high-dollar extras like alcohol, spa treatments, new travel wardrobe, etc.

The end of the year is a good time anyway to examine your lifestyle, to explore how you can shrink your financial footprint without compromising your values. Are you paying for subscriptions to magazines or newspapers you never find time to read? That Amazon prime account you signed up for last year when you had enough purchases to make it worthwhile? What about a gym or golf membership you don't use? Are you getting the best rates for the phone and TV service that fits your needs? Cutting expenses for things you won't miss is a great way to put more money in your pocket for when your income slows to a trickle.

What tips do you have for people who have recently been laid off? I'd love to hear your comments.

Monday, November 20, 2017