15 Financial New Year’s Resolutions To Make In 2021

2020 is ending (finally) and it is time to start setting resolutions for 2021. Why not try to improve your financial health by following ones, or more, of these financial New Year’s resolutions?2020 is ending (finally) and it is time to start setting resolutions for 2021. Why not try to improve your financial health by following ones, or more, of these financial New Year’s resolutions?

The post 15 Financial New Year’s Resolutions To Make In 2021 appeared first on Money Under 30.

Source: moneyunder30.com

Recover From a Holiday Binge With a Spending Freeze

Recover From a Holiday Binge With a Spending Fast

The holiday parties may be over but the financial hangover is just setting in. Holiday sales for 2016 were estimated to top $655 billion, according to the National Retail Federation. If you blew your holiday budget, don’t panic. A January spending freeze may be just what you need to get back on track. If you’ve never done a spending freeze before, here’s what to expect.

See the average budget for someone in your neighborhood.

How Does a Spending Freeze Work?

During a spending freeze, you avoid making nonessential purchases. For example, if you buy fast food two to three times per week or movie tickets once a month, you’d cut those expenses out temporarily. A spending freeze gives you the chance to rein in your spending and evaluate your budget. The money you would’ve spent on fun and entertainment can then go toward paying off the debt you racked up during the holidays.

Getting Started

Recover From a Holiday Binge With a Spending Fast

Before starting your spending freeze, you may need to mentally prepare yourself for what’s to come. Getting rid of bad spending habits can be tricky. But with the right mindset, you may be able to cut costs and achieve some of your financial goals.

The key to making your spending freeze work is being able to separate your needs from your wants. You’ll need to be able to pay for essential costs like rent, mortgage payments and debt payments. But you’ll need to recognize that other expenses – like the cost of a daily latte or a pair of new shoes – can be removed from your budget if necessary.

If you’re having trouble curbing your spending, agreeing to splurge on just one item during the month of January may make sticking with your freeze a bit easier.

Related Article: How to Recover From a Holiday Shopping Spree

Put the Money You’re Saving to Work

Once you begin your spending freeze, you’ll need to figure out what to do with the extra money in your bank account. Paying off your credit card bills should be a top priority since credit card debt tends to have a bigger impact on your credit score than installment debt. Specifically, you may want to focus on paying off your store credit cards since they often carry high interest rates.

Which credit card should you pay off first? You may want to begin by paying off the card with the highest APR since that’ll reduce what you’re paying in interest. Or you could pay off the card with the lowest balance. That may give you the momentum you need to knock out the rest of your credit card debt.

Related Article: How to Stop Spending Money Carelessly

Get a Partner Onboard

Recover From a Holiday Binge With a Spending Fast

Implementing a spending freeze can be difficult if you’ve never done one before. Having someone else along for the ride may help you fight your urge to splurge.

If you’re married, for example, you could ask your spouse to jump on the spending freeze bandwagon with you. Singles can find a friend or family member who’s willing to join in. Just remember that when you’re choosing a partner, it’s best to pick someone who’s going to encourage you to stick with your freeze and make good financial decisions.

Photo credit: ©iStock.com/Pogonici, ©iStock.com/killerb10, ©iStock.com/monkeybusinessimages

The post Recover From a Holiday Binge With a Spending Freeze appeared first on SmartAsset Blog.

Source: smartasset.com

How to Protect Yourself From Credit Card Theft

protecting yourself from credit card theft

Last fall, I received an email that appeared to be from my web host. The email claimed that there was a problem with my payment information and asked me to update it. I clicked on the link in the email and entered my credit card number, thinking that a recent change I’d made to my site must have caused a problem.

The next morning, I logged onto my credit card account to find two large unauthorized purchases. A scammer had successfully phished my payment information from me.

This failure of security is pretty embarrassing for a personal finance writer. I know better than to click through an email link claiming to be from my bank, credit card lender, or other financial institution. But because the email came from a source that wasn’t specifically financial (and because I was thinking about the changes I had made to my website just the day before), I let myself get played.

Thankfully, because I check my credit card balance daily, the scammers didn’t get away with it. However, it’s better to be proactive about avoiding credit card theft so you’re not stuck with the cleanup, which took me several months to complete.

Here’s how you can protect yourself from credit card theft. 

Protecting your physical credit card

Stealing your physical credit or debit card is in some respects the easiest way for a scammer to get their hands on your sweet, sweet money. With the actual card in hand, a scammer has all the information they need to make fraudulent purchases: the credit card number, expiration date, and the security code on the back.

That means keeping your physical cards safe is one of the best ways to protect yourself from credit card theft. Don’t carry more cards than you intend to use. Having every card you own in a bulging wallet makes it more likely someone could steal one when you’re not paying attention and you may not realize it’s gone if you have multiple cards.

Another common place where you might be separated from your card is at a restaurant. After you’ve paid your bill, it can be easy to forget if you’ve put away your card (especially if you’ve been enjoying adult beverages). So make it a habit to confirm that you have your card before you leave a restaurant.

If you do find yourself missing a credit or debit card, make sure you call your bank immediately to report it lost or stolen. The faster you move to lock down the card, the less likely the scammers will be able to make fraudulent charges. Make sure you have your bank’s phone number written down somewhere so you’re able to contact them quickly if your card is stolen or lost. (See also: Don’t Panic: Do This If Your Identity Gets Stolen)

Recognizing card skimmers

Credit card thieves also go high-tech to get your information. Credit card skimmers are small devices placed on a legitimate spot for a card scanner, such as on a gas pump or ATM. 

When you scan your card to pay, the skimmer device captures all the information stored in your card’s magnetic stripe. In some cases, when there’s a skimmer placed on an ATM, there’s also a tiny camera set up to record you entering your PIN so the fraudster has all the info they need to access your account.

The good news is that it’s possible to detect a card skimmer in the wild. Gas stations and ATMs are the most common places where you’ll see skimmer devices. Generally, these devices will often stick out past the panel rather than sit flush with it, as the legitimate credit card scanner is supposed to. Other red flags to look for are scanners that seem to jiggle or move slightly instead of being firmly affixed, or a pin pad that appears thicker than normal. All of these can potentially indicate a skimmer is in place. 

If you find something that looks hinky, go to a different gas station or ATM. Better safe than sorry. (See also: 18 Surprising Ways Your Identity Can Be Stolen)

Protecting your credit card numbers at home

Your home is another place thieves will go searching for your sensitive information. To start, you likely receive credit card offers, the cards themselves, and your statements in the mail. While mail theft is relatively rare (it’s a federal crime, after all), it’s still a good idea to make sure you collect your mail daily and put a hold on it when you go out of town.

Once you get your card-related paperwork in the house, however, you still may be vulnerable. Because credit card scammers are not above a little dumpster diving to get their hands on your credit card number. This is why it’s a good idea to shred any paperwork with your credit card number and other identifying information on it before you throw it away.

Finally, protecting your credit cards at home also means being wary about whom you share information with over the phone. Unless you’ve initiated a phone call of your own volition — not because you’re calling someone who left a voicemail — you should never share your credit card numbers over the phone. Scammers will pose as customer service agents from your financial institution or a merchant you frequent to get your payment information. To be sure, you can hang up and call the institution yourself using the main phone number.

Keeping your cards safe online

You should never provide your credit card information via a link in an email purporting to be from your financial institution or a merchant. Scammers are able to make their fake emails and websites look legitimate, which was exactly the reason I fell victim to this fraud.

But even with my momentary lapse in judgment about being asked for my payment information from my "web host," there were other warning signs that I could’ve heeded if I had been paying attention. 

The first is the actual email address. These fake emails will often have a legitimate looking display name, which is the only thing you might see in your email. However, if you hover over or click on the display name, you can see the actual email address that sent you the message. Illegitimate addresses do not follow the same email address format you’ll see from the legitimate company.

In addition to that, looking at the URL that showed up when I clicked the link could’ve told me something weird was going on. Any legitimate site that needs your financial information will have a secure URL to accept your payment. Secure URLs start with https:// (rather than http://) and feature a lock icon in the browser bar. If these elements are missing, then you should not enter your credit card information. (See also: 3 Ways Millennials Can Avoid Financial Fraud)

Daily practices that keep you safe

In addition to these precautions, you can also protect your credit cards with the everyday choices you make. For instance, using strong, unique passwords for all of your online financial services, from shopping to banking, can help you prevent theft. Keeping those strong passwords safe — that is, not written down on a post-it note on your laptop — will also help protect your financial information.

Regularly going over your credit card and banking statements can also help ensure that you’re the only one making purchases with your credit cards. It was this daily habit of mine that made sure my scammers didn’t actually receive the computer they tried to purchase with my credit card. The fact that I check my balance daily meant I was able to shut down the fraudulent sale before they received the goods, even though I fell down on the job of protecting my credit card information. 

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It’s better to be proactive about avoiding credit card theft so you're not stuck with the cleanup. Here's how you can protect yourself from credit card theft. | #Creditcard #creditcardtheft #personalfinances


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Don’t Let Debt Ruin the Holidays: Proactive Steps

A smiling woman wearing a denim dress and a red headband looks down at her shopping bags

According to numbers for the 2018 holiday shopping season, American shoppers incurred an average debt of just over $1,000. And not everyone could pay that debt off quickly, leading to expensive, long-term credit card debt for some.

But holiday shopping debt isn’t the only financial burden people face. Many enter the season with other debt. If that’s you, don’t let debt ruin the holidays. Instead, consider some of these tips to manage debt before the holidays so you can enjoy the festivities with reduced stress.

1. Find Out Exactly Where You Stand Financially

Before you create a plan to tackle your debt, ensure you’re accounting for all of it. According to a 2019 study, around one in five adult Americans weren’t sure if they had credit card debt when asked.

Even if you think you have a handle on your debt, it’s a good idea to give your reports a once-over. This lets you ensure you didn’t miss something important and that no one has used your identity to run up debt in your name. That could come as a nasty surprise if you try to use or obtain credit for holiday shopping.

You can get a free copy of your credit reports from AnnualCreditReport.com. Normally, you can get one per year from each of the three major credit bureaus. But because of assistance measures put in place for COVID-19, you can get a free copy from each bureau every week through April 2021. You can also get a free Credit Report Card from Credit.com, which includes your Experian VantageScore 3.0 and regular updates on what is affecting your scores.

2. Create a Monthly Budget

Once you know everything you owe, sit down and take a look at your monthly budget. List all of your regular expenses and decide where you can cut to help put more money toward your debt.

Use tools such as credit card debt calculators to determine how much you should pay every month on debt to reduce it in a certain amount of time. This helps you understand how much money you should be putting toward debt to pay it off before the holidays arrive.

3. Choose a Method for Paying Down Debt

Every situation is different, so the way you pay down debt depends on what might work best for your situation. Here are a few tips to consider.

Go with a Basic Snowball Method

The Snowball Method means you line up all your debts by total balance. You make a minimum payment on each while throwing anything extra at the debt with the smallest balance. You do so because you’ll be able to pay off that one the fastest.

Once you pay off the first debt, you take everything you were putting on it each month and add it to what you’re paying on the next-smallest balance. As you pay off each debt, you have more money to put toward the next one. By the time you reach the biggest debt, you can pay it off fairly quickly.

Make Use of Balance Transfer Cards

If it’s not realistic to pay down all of your debt before the holidays, you might want to concentrate on getting your finances in order and ensuring your debt costs as little as possible. One way to do that is to make use of a balance transfer card.

These cards let you transfer existing high-interest credit card debt to a card that has 0% APR for a period of time. If you can pay the debt off within that time—which can range from a year to two years on average—you can save a lot in interest.

Consider Taking Out a Personal Loan to Consolidate Debt

If you’re dealing with high-interest debt or payments that simply add up to more than you can handle every month, you might consider a personal loan to consolidate debt. A debt consolidation loan doesn’t get rid of your debt, but it might make it more manageable. You might end up with a single monthly payment that reduces how much you must worry about during the holidays.

4. Set a Holiday Budget and Stick to It

Once you have a plan for dealing with your existing debt, ensure you don’t re-create it with your holiday spending this year. Spend smart during the holidays. Make a list of what you want to do, the meals and treats you want to make, and the gifts you want to buy.

Assign everything on your list a dollar amount, and then take another look. Can you realistically afford all of this? You might need to make some priority decisions and reduce your list to fit a holiday budget you can afford without racking up too much debt this season.

5. Use Credit to Your Advantage

If you don’t let debt ruin the holidays, you might be able to use credit as a financial tool to your advantage as you shop or participate in festivities. The right rewards credit cards help you earn points or miles as you spend—and you can earn even more points for spending in certain categories.

For example, you might have a cash-back credit card that gives you more cash back in the final quarter of the year on travel or grocery shopping. You could use that card to fund expenses as you go visit relatives or prepare a feast when they come to your home.

If you spend on your card only what you were going to spend with cash anyway, you can pay your balances off immediately. That means you get those rewards without any interest cost for doing so. If you don’t have a rewards credit card, you can find options to consider in the Credit.com credit card marketplace. Here are a couple to start with.

Blue Cash Preferred Card from American Express

Blue Cash Preferred® Card from American Express

Apply Now

on American Express’s secure website

Card Details
Intro Apr:
0% for 12 months on purchases


Ongoing Apr:
13.99%-23.99% Variable


Balance Transfer:
N/A


Annual Fee:
$95


Credit Needed:
Excellent-Good

Rates and Fees

Snapshot of Card Features
  • Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
  • 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
  • 6% Cash Back on select U.S. streaming subscriptions.
  • 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more).
  • 1% Cash Back on other purchases.
  • Low intro APR: 0% for 12 months on purchases from the date of account opening, then a variable rate, 13.99% to 23.99%.
  • Plan It® gives the option to select purchases of $100 or more to split up into monthly payments with a fixed fee.
  • Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • $95 Annual Fee.
  • Terms Apply.

Card Details +

This card gives you 6% cash back at U.S. supermarkets, up to $6,000 per year in purchases. You can also get 3% cash back at U.S. gas stations and transit, making it a potentially good card to use when you’re traveling. The Blue Cash Preferred® card allows you to earn a $250 statement credit after you spend $1,000 in purchases on your new card within the first 3 months.

Amalgamated Bank of Chicago Platinum Rewards Mastercard

Amalgamated Bank of Chicago Platinum Rewards Mastercard® Credit Card

Apply Now

on Amalgamated Bank of Chicago’s secure website

Card Details
Intro Apr:
0% on Purchases for 12 months


Ongoing Apr:
12.90% – 22.90% Variable APR on purchases


Balance Transfer:
12.90% – 22.90% Variable APR on balance transfers


Annual Fee:
$0


Credit Needed:
Excellent

Rates and Fees

Snapshot of Card Features
  • 0% Intro APR on Purchases for 12 months; after that the variable APR will be 12.90% – 22.90% (V), based on your creditworthiness
  • Earn $150 Statement Credit after you spend $1,200 on purchases within the first 90 days from account opening
  • Earn 5x rewards on up to $1,500 in combined purchases each quarter in popular categories such as dining, groceries, travel, and automotive
  • No upper limit on the points you can accumulate, and since points never expire, you can save up for a big award!
  • Earn Points on Every Purchase! It’s simple: $1 = 1 Point
  • No Annual Fee or Foreign Transaction Fee
  • Select Your Rewards Your Way
  • No Foreign Transaction Fee

Card Details +

The Amalgamated Bank of Chicago Platinum Rewards Mastercard® allows you to earn 5X rewards up to $1,500 in combined purchases each quarter in popular categories. Categories include dining, groceries, fuel, travel, and other popular spending areas. If you’ll be spending in a certain category during the holidays, you could earn extra rewards points to redeem on travel or other purchases.

Reward Yourself

It’s never too early or too late to start planning financially for big seasons such as the holidays. If you’re ready to take a step toward that plan today, consider signing up for ExtraCredit. Reward It from ExtraCredit connects you with personalized offers and offers cashback rewards when you sign up and are approved for them.

Reward Yourself This Holiday Season

The post Don’t Let Debt Ruin the Holidays: Proactive Steps appeared first on Credit.com.

Source: credit.com

Should I Take Money Out of My 401(k) Now?

Is taking money from your 401(k) plan a good idea? Generally speaking, the common advice for raiding your 401(k) is to only take this step if you absolutely have to. After all, your retirement funds are meant to grow and flourish until you reach retirement age and actually need them. If you take money from your 401(k) and don’t replace it, you could be putting your future self at a financial disadvantage.

Still, we all know that times are hard right now, and that there are situations where removing money from a 401(k) plan seems inevitable. In that case, you should know all your options when it comes to withdrawing from a 401(k) plan early or taking out a 401(k) loan.

401(k) Withdrawal Options if You’ve Been Impacted by COVID-19

First off, you should know that you have some new options when it comes to taking money from your 401(k) if you have been negatively impacted by coronavirus. Generally speaking, these new options that arose from the CARES Act include the chance to withdraw money from your 401(k) without the normal 10% penalty, but you also get the chance to take out a 401(k) loan in a larger amount than usual. 

Here are the specifics:

401(k) Withdrawal

The CARES Act will allow you to withdraw money from your 401(k) plan before the age of 59 ½ without the normal 10% penalty for doing so. Note that these same rules apply to other tax-deferred accounts like a traditional IRA or a 403(b). 

To qualify for this early penalty-free withdrawal, you do have to meet some specific criteria. For example, you, a spouse, or a dependent must have been diagnosed with a CDC-approved COVID-19 test. As an alternative, you can qualify if you have “experienced adverse financial consequences as a result of certain COVID-19-related conditions, such as a delayed start date for a job, rescinded job offer, quarantine, lay off, furlough, reduction in pay or hours or self-employment income, the closing or reduction of your business, an inability to work due to lack of childcare, or other factors identified by the Department of Treasury,” notes the Consumer Financial Protection Bureau (CFPB). 

Due to this temporary change, you can withdraw up to $100,000 from your 401(k) plan regardless of your age and without the normal 10% penalty. Also be aware that the CARES Act also removed the 20 percent automatic withholding that is normally set aside to pay taxes on this money. With that in mind, you should save some of your withdrawal since you will owe income taxes on the money you remove from your 401(k).

401(k) Loan

The Cares Act also made it possible for consumers to take out a 401(k) loan for twice the amount as usual, or $100,000 instead of $50,000. According to Fidelity, you may be able to take out as much as 50% of the amount you have saved for retirement. However, not all employers offer 401(k) loan options through their plans and they may not have adopted the new CARES Act provisions at all, so you should check with your current employer to find out. 

A 401(k) loan is unique from a 401(k) withdrawal since you’ll be required to pay the money back (plus interest) over the course of 5 years in most cases. However, the interest you pay actually goes back into your retirement account. Further, you won’t owe income taxes on money you take out in the form of a 401(k) loan. 

Taking Money out of Your 401(k): What You Should Know

Only you can decide whether taking money from your 401(k) is a good idea, but you should know all the pros and cons ahead of time. You should also be aware that the advantages and disadvantages can vary based on whether you borrow from your 401(k) or take a withdrawal without the intention of paying it back. 

If You Qualify Through the CARES Act

With a 401(k) withdrawal of up to $100,000 and no 10% penalty thanks to the CARES Act, the major disadvantage is the fact that you’re removing money from retirement that you will most certainly need later on. Not only that, but you are stunting the growth of your retirement account and limiting the potential benefits of compound interest. After all, money you have in your 401(k) account is normally left to grow over the decades you have until retirement. When you remove a big chunk, your account balance will grow at a slower pace.

As an example, let’s say you have $300,000 in a 401(k) plan and you leave it alone to grow for 20 years. If you achieved a return of 7 percent and never added another dime, you would have $1,160,905.34 after that time. If you removed $100,00 from your account and left the remaining $200,000 to grow for 20 years, on the other hand, you would only have $773,936.89. 

Money you have in your 401(k) account is normally left to grow over the decades you have until retirement. When you remove a big chunk, your account balance will grow at a slower pace.

Also be aware that, while you don’t have to pay the 10% penalty for an early 401(k) withdrawal if you qualify through the CARES Act, you do have to pay income taxes on amounts you take out. 

When you borrow money with a 401(k) loan using new rules from the CARES Act, on the other hand, the pros and cons can be slightly different. One major disadvantage is the fact that you’ll need to repay the money you borrow, usually over a five-year span. You will pay interest back into your retirement account during this time, but this amount may be less than what you would have earned through compound growth if you left the money alone.

Also be aware that, if you leave your current job, you may be required to pay back your 401(k) loan in a short amount of time. If you can’t repay your loan because you are still experiencing hardship, then you could wind up owing income taxes on the amounts you borrow as well as a 10% penalty.

Note: The same rules will generally apply if you quit your job and move out of the United States as well, so don’t think that moving away can get you off the hook from repaying your 401(k) loan. If you’re planning to leave the U.S. and you’re unsure how to handle your 401(k) or 401(k) loan, speaking with a tax expert is your best move. 

Keep in mind that, with both explanations of a 401(k) loan and a 401(k) early withdrawal above, these pros and cons are predicated on the idea you can qualify for the special benefits included in the CARES Act. While the IRS rules for qualifying for a coronavirus withdrawal are fairly broad, you do have to be facing financial hardship or lack of childcare due to coronavirus. You can read all the potential qualification categories on this PDF from the Internal Revenue Service (IRS). 

If You Don’t Qualify Through the CARES Act

If you don’t qualify for special accommodation through the CARES Act, then you will have to pay a 10% penalty on withdrawals from your 401(k) as well as income taxes on amounts you take out. With a traditional 401(k) loan, on the other hand, you may be limited to borrowing just 50% of your vested funds or $50,000, whichever is less.

However, you should note that the IRS extends other hardship distribution categories you may qualify for if you’re struggling financially . You can read about all applicable hardship distribution requirements on the IRS website.

Taking Money Out of Your 401(k): Main Pros and Cons

The situations where you might take money out of your 401(k) can be complicated, but there are some general advantages and disadvantages to be aware of. Before you take money from your 401(k), consider the following:

Pros of taking money out of your 401(k):

  • You are able to access your money, which could be important if you’re suffering from financial hardship. 
  • If you qualify for special accommodations through the CARES Act, you can avoid the 10% penalty for taking money from your 401(k) before retirement age. 
  • You can take out more money (up to $100,000) than usual from your 401(k) with a 401(k) withdrawal or a 401(k) loan thanks to CARES Act rules. 

Cons of taking money out of your 401(k):

  • If you take money out of your 401(k), you’ll have to pay income taxes on those funds.
  • Removing money from your 401(k) means you are reducing your current retirement savings.
  • Not only are you removing retirement savings from your account, but you’re limiting the growth on the money you take out.
  • If you take out a 401(k) loan, you’ll have to pay the money back. 

Alternatives to Taking Money from your 401(k)

There may be some situations where taking money out of your 401(k) makes sense, including instances where you have no other option but to access this money to keep the lights on and food on the table. If you cash out your 401(k) and the market tanks afterward, you could even wind up feeling like a genius. Then again, the chances of optimally timing your 401(k) withdrawal are extremely slim. 

With that being said, if you don’t have to take money out of your 401(k) plan or a similar retirement plan, you shouldn’t do it. You will absolutely want to retire one day, so leaving the money you’ve already saved to grow and compound is always going to leave you ahead in the long run.

With that in mind, you should consider some of the alternatives of taking money from a 401(k) plan:

  • See if you qualify for unemployment benefits. If you were laid off or furloughed from your job, you may qualify for unemployment benefits you don’t even know about. To find out, you should contact your state’s unemployment insurance program. 
  • Apply for temporary cash assistance. If you are facing a complete loss in income, consider applying for Temporary Assistance for Needy Families (TANF), which lets you receive cash payments. To see if you qualify, call your state TANF office. 
  • Take out a short-term personal loan. You can also consider a personal loan that does not use funding from your 401(k). Personal loans tend to come with competitive interest rates for consumers with good or excellent credit, and you can typically choose your repayment term. 
  • Tap into your home equity. If you have more than 20% equity in your home, consider borrowing against that equity with a home equity loan or home equity line of credit (HELOC). Both options let you use the value of your home as collateral, and they tend to offer low interest rates as a result. 
  • Consider a 0% APR credit card. Also look into 0% APR credit cards that allow you to make purchases without any interest charged for up to 15 months or potentially longer. Just remember that you’ll have to repay all the purchases you charge to your card, and that your interest rate will reset to a much higher variable rate after the introductory offer ends. 

The Bottom Line

In times of financial turmoil, it may be tempting to pull money out of your 401(k). After all, it is your money. But the ramifications to your future financial wellbeing may be substantial. The CARES Act has introduced new options to leverage your 401(k), without the normal penalties. Find out if you qualify and take time to understand the details behind the options. We recommend speaking to a tax expert if you have any questions or concerns regarding possible tax penalties.

The traditional wisdom is to leave your retirement untouched, and we agree with that. If you’re in a financial bind, consider other options to get you through the rough patch. Tapping into your 401(k) should really be your last resort.

The post Should I Take Money Out of My 401(k) Now? appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Busted! 11 Common Myths About Balance Transfer Credit Cards

If you are confused about balance transfer credit cards it’s likely because you’ve heard some of the myths about them. Believe me, I get it.  I’ve been there. There are so many myths about balance transfer credit cards, it can be hard to distinguish the truth from the fantasy. Well, good news. Today we’re covering […]

The post Busted! 11 Common Myths About Balance Transfer Credit Cards appeared first on Incomist.

Source: incomist.com

Money-Saving Hacks to Implement Now

Redo your monthly budget (and stick to it)

You can do plenty of things to improve your budget, and it's not all about pain and suffering, as many would have you believe. Everyone has a few things they overspend on. The challenge lies in identifying those particular items and weeding them out. A good place to begin is with restaurant spending, grocery bills, and impulse buying. A wise general philosophy is to assign a destination for every dollar you earn and place that category on your budget. Try cutting restaurant expenditures in half, reducing impulse buys at convenience stores, and shopping for groceries just once each week to regulate what goes toward food items.

Refinance your education debt

If you have any education debt still hanging around after all these years, refinancing student loans through a private lender is a way to lessen your monthly expenses. Not only can you get a longer repayment period, but have the chance to snag a favorable interest rate. But the clincher for money-saving enthusiasts is that your monthly payments can instantly go way down. That means extra cash for whatever you want. Use the excess to fatten savings or IRA accounts, or pay off high-interest credit card debt.

Install a programmable thermostat

For less than $20, it's possible to chop at least three percent off your utility bills and perhaps much more than that. 

Programmable thermostats are easy to install. You don't need special tools or advanced skills. Be sensible about summer and winter settings and you'll see a difference in your electric bill almost immediately, especially during the hottest months of the year. Don't forget to program the device to go into low-use mode while you're away for long weekends or longer vacations.

Join a shopping club

Although shopping clubs come with annual membership fees, the savings on groceries, household items, and gasoline usually offset them within a month or two of actively using the membership. That leaves the other months of the year for you to save money on household necessities. 

For people who drive a lot, shopping clubs with on-site gas stations offer one of the best deals going. Not only do the clubs offer gasoline for about 10 cents off the regular price, but some also offer free car washes and coupons for repair work at participating shops. Although shopping clubs are a win for most anyone, a family of three or more can log thousands per year in savings.

Refinance your home or car

If you have owned your home or car long enough to ride the interest rate waves, you likely qualify for a refinancing agreement. This strategy is excellent for consumers who have better credit now than when they made the original purchase. 

Young couples are perfectly positioned to refinance a home after several years of making payments on it. Likewise, anyone who still owes on a vehicle and can get a lower interest rate should look into a car or truck refi. Not only can you get additional months to pay off the obligation, but with a lower rate, you stand to save a nice chunk of money.

Take bagged lunches to work

One of the oldest, more reliable ways to instantly cut personal expenses is to prepare and take your own lunch to work each day. Not only do you save money by not eating out or buying lunch in the company cafeteria, but you also have added control over what you eat. That means you're doing a favor for your wallet and your health at the same time. 

Don't fall into the rut of eating at your desk. Consider taking your bagged meal outside and enjoying the scenery, taking a walk after eating, or joining friends in the cafeteria to socialize. 

Use public transportation as often as possible

If you live on or near a bus or light-rail route, do the logistical planning necessary to travel to work at least a few times each week by public transit instead of by car. 

Unless you reside in a small town, chances are you have access to buses and trains for commuting purposes. Once you get into a habit of using the public transit system, consider buying a one-month or annual pass, which can represent a major discount on one-time fare prices. Public transportation can take a bit longer to get you to your destination, but it's easy enough to make use of the time reading, catching up on work, or just relaxing.

Use credit cards wisely

If you use credit cards to make purchases you can't afford, you're headed for trouble. But if you use your plastic wisely, you can reap real benefits.

If you have a good credit rating, you'll likely qualify for cashback cards that give a percentage of your money back on some or all of your purchases. You can use that cash to pay for a portion of your monthly credit card bill. You could also let your cashback savings accumulate and use it to pay for larger purchases in the future.

Just make sure not to outspend your monthly budget so you're able to pay your credit card balance off in full each month. Keeping a balance on your cards is counterproductive because you'll also be paying interest fees.

Source: quickanddirtytips.com

How to Maximize Credit Card Rewards and Earn Cash and Perks

If you’re looking for ways to put some extra cash in your pocket, make sure to take advantage of credit card rewards programs.

Credit card companies and banks make some of their money from the merchant interchange fees that are charged when you use your card.

As an incentive for you to use their cards, many credit card issuers pass some of those funds on to the consumer in the form of credit card rewards.

If you have good credit and the ability and discipline to pay off your credit cards in full each month, you should try to maximize your credit card rewards. Otherwise you may be leaving a lot of money on the table.

But it can be challenging to navigate the world of credit card rewards. Hundreds, if not thousands, of different credit cards exist, and the type and amount of rewards vary with each card.

There are three main kinds of rewards card offers available:

  • Bank and credit card points: Chase Ultimate Rewards, American Express Membership Rewards, etc.
  • Airline miles and hotel points: Delta SkyMiles, Hilton Honors points, etc.
  • Cash back: Straight cash that can be redeemed either as statement credits or checks mailed to you.

How to Maximize Your Credit Card Rewards

You have three different ways to maximize any credit card rewards program:

  • The sign-up bonus or welcome offer: Many cards offer a large number of miles or points as a welcome bonus for signing up and using the card to make purchases totaling a specific amount within a specified time period.
  • Rewards for spending: Most rewards credit cards offer between one and five points for every dollar you spend on the card. Some cards offer the same rewards on every purchase, while others offer a greater reward for buying certain products.
  • Perks: Simply having certain credit cards can get you perks like free checked bags on certain airlines, hotel elite status or membership with airline lounge clubs and other retail partners.

Usually, the rewards for signing up are much higher than the rewards you get from ongoing spending, so you may want to pursue sign-up bonuses on multiple credit cards as a way of racking up rewards.

Consider a card like the Chase Sapphire Preferred, where you can get 60,000 Ultimate Rewards points for spending $4,000 in the first three months of having the card. That means that while you’re meeting that minimum spending requirement, you’re earning 15 Ultimate Rewards points per dollar. Compare that to the one or two points you’ll earn with each dollar of spending after meeting the minimum spending. You can see the difference.

Other than getting the welcome bonus offers for signing up for new credit cards, another great way to maximize your rewards is by paying attention to bonus categories on your cards. Some cards offer a flat 1 or 2 points for every dollar you spend.

How Applying for Credit Cards Affects Your Credit Score

It’s important to be aware of how applying for new credit cards affects your credit score.

Your credit score consists of five factors, and one of the largest factors is your credit utilization.

Credit utilization is the percentage of your total available credit that you’re currently using. If you have one credit card with a $10,000 credit limit and you charge $2,000 to that card, then your utilization percentage is 20%. But if you have 10 different cards, each with $10,000 credit limits, then that your credit utilization percentage is only 2%.

Since a lower credit utilization is better, having multiple credit cards can actually help this part of your credit score.

New credit — how recently you’ve applied for new credit cards — accounts for about 10% of your credit score. When you apply for a new credit card, your credit score usually will dip 3-5 points. However, if you’re conscientious with your credit card usage, your score will come back up in a few months.

What to Watch Out for When Using Credit Card Rewards

While it’s true that careful use of credit cards can be a boon, you should watch out for pitfalls.

The first thing is to make sure that you have the financial ability, discipline and organization to manage all of your credit cards. Missing payments and paying credit card interest and fees will quickly sap up any rewards you might earn.

Another thing to be aware of is the psychology of credit card rewards. It can be easy to justify additional spending because you’re getting rewards or cash back, but remember that buying something that you don’t need in order to get 2% cash back is a waste of 98% of your money.

Pro Tip

Credit card rewards are alluring, but what do they really cost? Here’s what you should know about the dark side of credit card rewards.

The Best Credit Cards to Get Started

Before signing up for a new credit card, it’s best to pay off your existing cards first — otherwise the fees and interest will quickly outweigh any rewards you earn.

If you’re ready to start shopping rewards offers, here are five credit cards to consider. Note that these introductory offers are subject to change:

  • Chase Sapphire Preferred – The Sapphire Preferred card earns valuable Chase Ultimate Rewards and currently offers 60,000 Ultimate Rewards if you spend $4,000 in the first three months. It comes with a $95 annual fee.
  • Capital One Venture Rewards – The Capital One Venture Rewards is offering 100,000 Venture miles, which can be used on any airline or at any hotel. It also comes with a $95 annual fee.
  • Barclays American AAdvantage Aviator Red – With the AAdvantage Aviator Red card, you’ll get 50,000 American Airlines miles after paying the $99 annual fee and making only one purchase.
  • American Express Hilton Honors – If you’re looking for a hotel card, consider the no-fee Hilton Honors card, which comes with a signup bonus of 80,000 Hilton Honors points after spending $1,000 in three months. There is no annual fee.
  • Bank of America Premium Rewards – The Bank of America Premium Rewards card comes with a bonus of 50,000 Preferred Rewards points (worth $500) after spending $3,000 in the first three months. The card has a $95 annual fee.
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The Bottom Line

The best credit card is the one that gets you the rewards that help you do what is most important to you.

If you’re looking to maximize travel credit, then pick an upcoming trip and figure out what airline miles and hotel chain points you’ll need. Then pick the credit cards that give those miles and points. If you want to maximize your cash back, look for a card with a good signup bonus that either offers cash back or bank points that can be converted into cash.

Dan Miller is a contributor to The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com