Homeowner's Insurance Increases Not Always Appropriate

Taking care of your finances requires constant diligence and attention.  The items we automatically renew without much if any review, need to be reviewed.   I'm not suggesting that you switch companies for a lower rate every time your service contract is up for renewal.  I am suggestion that you take just a few minutes and review the items before paying the renewal.

I think of it as at least giving my renewals the Smell Test.  To be a good Smell Tester, you have to pay attention to general changes in your life, the economy, and have a sense of what is a reasonable range of increase for whatever service contract you are renewing.

My most recent example is my homeowner's insurance policy.  I have had a great relationship with my insurance company and the rates have always been within reason of competitors and worth the value for me.  However, as I opened my annual renewal for this year, the amount seemed more than 20% higher than last year.  The quick Smell Test said, that doesn't seem right, so I laid it aside to review it later.  The problem with that is, later comes later than the cancellation of the policy if I am not careful.

Now that it's later, and I need to pay to avoid cancellation, I have no time to go shopping and I can easily just resign myself to paying the increased rate.   But 20% higher is still nagging me so I break down and call the agent.  Actually, I break down and call the agent after being unable to login to my account online.  When you only login once a year, it can be hard to remember your ID and password.

Fortunately, my phone call paid off.  I called to pay my bill and then, almost as an afterthought asked why it increased so much.  The agent pulled up the account and indeed it had gone up significantly, but he calculated only a 15% increase.  Apparently the policy increased last year and I just paid it without questioning the 15% increase last year.

I can see an increase of 2 to 4 percent, but I need to have some justification for any more increase since the economy is not recovering significantly and the CPI or cost of living for this area is not really increasing by more than that range.  So that is my range of reasonableness.

As the agent researched and asked questions I answered years ago when I bought my house there seem to be a serious lack of information on my policy.  First of all, if I had a wired in alarm system and an internal sprinkler fire system when I bought the house, chances are I still have those items installed now.  When was the last time you heard someone ripped out the alarm system wiring or the fire sprinkler system in their home?  Apparently,  the insurance company is not so sure that is a rare thing to do.

In addition to this missing information, the increase this year was justified by the insurance company due to the increased cost of roof replacement in my area.  Due to wind, storms, heat and natural occurrences, this happens often in my part of the country.  However  I don't have to pay to replace my roof.  Hmmmm.

My policy is for a condominium and not a single family home.  In a condominium, the roof is owned jointly with your HOA members and the HOA fees are set aside to pay for roof repair and replacement.  Hmmmm, again.

My agent very quickly realized the explanation was not lining up and offered to research further my account and call back with an adjusted rate.  In the end,  I not only got a lower rate since I was not paying for things I did not need to buy, but I also got a refund for the same items that escaped my attention last year.

Total Savings for diligence:   $ 123.42

Satisfaction and peace:  Grateful to God for His leading and prompting to call and inquire.


Warning:  Review all policy renewals!
For auto, home, health and all insurance policies, you should review the renewals for any increases every period they renew.  Generally, most policies are given an annual rate that you may pay monthly, quarterly or annually.

Reviewing renewals then, is done once a year when the rate changes and not with each payment.

How to: 
   1.  Keep a copy of the policy and the invoice in a file.  [see Record Keeping notes].
   2.  Compare this renewal invoice with the prior one - whether it is for a month or a year or other period.
   3.  Calculate the percentage of increase in the invoice amount.
   4.  Compare the percentage increase to the percentage increase in your annual salary.
   5.  Call the agent and ask for an explanation of the increase so you understand what changed.
   6.  If you are unsure the explanation is sufficient or do not understand why the rate changed,
         consider calling someone you trust to review it with you again or call a competitor for
         a comparative quote before renewing your policy.
    7.  Pay your policy on time or switch to a new policy before the insurance cancellation to
          avoid creating a period of being uninsured or causing in some cases an increase for
          pre-existing conditions as in health insurance.

Additional Cautions:

     *   Review insurance renewals as soon as you get your bill in order to give yourself time
               to research any increases or changes you may need to make.
     *   Don't assume the renewal is an error, just do your due diligence and make sure you
               know what you are paying for.

     *  Keep a good working relationship that is open, honest and mutually respectful to ensure that
               you are working together with your best interest in mind.
     *  You are your own advocate, not your agent.  Your agent provides a service as an expert in their
               field.


I hope this is helpful information.  Leave a comment if you think I've left something out and help others as well. 

Lowering Bills can be Time Expensive

Today I finally succeeded at lowering my phone bill.  Hooray!!  Yes, I am celebrating - and wildly so.  This is quite an accomplishment and it has taken time and effort.

Technology is constantly changing.  To keep up will cost you time, but could save you money.  If you don't keep up, it could cost you both time and money.  A lot of money.  And sadly, you won't really notice, because we are consumers who buy new things and we are not use to getting rid of things we are not using.  We tend to just put them in storage or let them sit where they are until.... well, until we notice we didn't get rid of them I guess.

The bills for basic services for phone, internet and television - or rather 'media' continue to just soar every year.  Bundling is chaos as far as I am concerned.  I don't really want 300 television channels and I want internet connection with me - where I am - whether I am at home or not.  My gadgets go with me, my internet should too. 

All I really wanted to do was lower my home phone and internet bill since I rarely use them any more.  I had not planned on completely canceling them, just lowering their luxury items that I not only don't use any more,  I can't recall if I ever used them in the first place.   I traveled with my job for a couple of years, so I had added internet Wi-Fi on the go at hotspots.  This was before mobile broadband and the wide availability of free Wi-Fi at Panera Bread and McDonald's.  I wonder if I could just buy a membership at McDonald's for Premier service that would include unlimited, private wi-fi, and 1 $1 drink a week.  After all, as McDonald's knows, it's about distribution.  The phone company still thinks it's about bundling services.  Even at McDonald's, I order a la carte.

Let's get back to the phone bill.  After 5 phone calls, 3 of which I was put on hold for over 1 hour each, I was able to remove the traveling Wi-Fi from my home phone.  After all, it's now included in your home internet service anyway according to their commercials.  If that's true, then why didn't they take it off my bill themselves?  That's a whole different issue I'd like to discuss later.

My phone bill with home phone, internet of 6mps speed, unlimited long distance, and television was costing me $169 a month.  I don't remember the last time I answered or made a call on my home phone service.  I watch very little television anymore.  I don't travel with my job to need the traveling Wi-Fi, where most airports were not accessible anyway. 

Removing unlimited long distance saved me $37 a month and I still maintained a basic phone service with no benefits.  That means I can still dial 911, I can still make local calls.  I can still answer if you call me.  However, I no longer have caller-ID, call forwarding, voicemail, or anything else they listed I had and never used before.  Caller-ID would be missed if I actually answered my home phone.  Since I don't, that just won't be a problem. 

Removing the traveling Wi-Fi, saved me $9.99 a month.  The total of $47 a month adds up very quickly.  The savings on the home phone, partially including a savings on the list of taxes on the unused services.  Again, that's another subject for us to discuss at another time.

At the time I purchased my home phone bundle, this was the best deal for my usage and local area.  However, with FIOS and U-Verse and mobile broadband, this is no longer the best deal.  I have more Wi-Fi gadgets, but all my wireless connectivity is tied to being at home.  That simply doesn't make sense anymore.  So I replaced traveling Wi-Fi with a T-Mobile mobile broadband for $33 a month.

That does not however reduce my savings to $17 a month.  You see, I added a smartphone a year ago and I was spending an extra $20 to $60 a month on my phone for data downloads to play Games with Friends.  Not a very smartphone.  They should call it a Funphone or a FriendPhone instead.  I will concede however, that I spent $33 a month to save $30 a month.  I gained the ability to use my mobile broadband for my phone data, iPad, Kindle Fire, Tablet PC, and share my connection with a friend.  I can connect up to 5 devices at once and there are no overage charges.  If I go over my usage amount, the speed does slow down, but I have not had that happen yet. 

Keys to success: 
1.  Review bundles, gadgets and technology once a year and adjust.
2.  If you get put on hold when you want to cancel a previous service, hold your ground.  You should not pay for what you do not use.  There are other companies out there to do business with.
3.  Don't bundle unless it's the best option for the price and the lifestyle.
4.  Family plan bundling is not always a savings.  It might just keep you locked in longer that you should be to a bad plan when things change. 

Money Management is ongoing every day, and you can be good at it.
Reduce the Debt.
Reduce expenses by reducing overpaying for unused services.
 

Are You Getting Your Rewards? Part 4

I heard back from the credit card company about my diminished rewards on my new cash back credit card. To be fair, they did give me most of the rewards promised, but they still had to adjust for the first statement.

The transaction history shows the bonus rewards for each item and not the total rewards for each item.  So, if you look by transaction, you will only see the bonus cash back reward above the baseline 1% cash reward received on all transactions.  The 1% cash back reward on all items is calculated on the statement total on the final billing date.  You will not be able to see this amount until the statement period closes and the reward is calculated and posted to the account.  There will be only 1 line item for the total monthly purchases. 

The first month's statement however, only had the 1% reward and customer service still had to adjust for the bonus rewards for a couple of transactions on that statement.  My best guess, is that these rewards occurred between the original phone call and the follow-up conversation where the customer service representative said that they would convert the original credit card to the new rewards program as well.  The transactions were just caught between the now and the not yet rewards program.

My list of cautions on rewards programs is growing. When it comes to credit card or retail rewards programs, make sure you know what you are suppose to get and know how to tell if you are actually getting your rewards.

Cautions on Rewards Programs:

     1. Rewards you will never use, are not rewards.
     2. Rewards you don't actually get, are not rewards.
     3. Rewards that last only for a promotional period of time should be re-evaluated when that period ends. 
     4. Reward programs should all be reconsidered once a year for benefit.

Related Posts:
      Are You Getting Your Rewards?
      Are You Getting Your Rewards? Part 2
      Are You Getting Your Rewards? Part 3

Are You Still Not Getting Your Rewards? Part 3

If companies want to know why their rewards programs are not as successful as they think they should be, they should consider the fact that they might not be giving what they promised.  I tend to give up on rewards programs when I have to audit them to see if they are really working.

As you already know, I now have 2 cash rewards cards with the same company and both cards give me cash rewards.  The rewards vary depending on whether I am purchasing gas, groceries, restaurant meals, or other categories.  Some categories have a bonus percentage of cash for a limited time.

Now that I have used my new card and received my first statement, I went to check on the rewards.  The transaction history states that I did in fact get rewards, however, they are not the rewards that were promised.  On items that should have received 3% I only received 2%.  On items that should have received 2%, I only received 1%.  All purchases should at least received 1% and I think that they do - so far.

So now I have to call and find out why there is a discrepancy.  I'll have to follow up later with the response.  I have several questions as well.  How do they determine groceries if stores sell everything from groceries to televisions?  The gas station is also a convenience store.  I only buy gas 99.9% of the time, and yet I get the percentage cash rebate as if I bought groceries loosing 33% of my rebate.

My list of cautions on rewards programs is growing. When it comes to credit card or retail rewards programs, make sure you know what you are suppose to get and know how to tell if you are actually getting your rewards.

Cautions on Rewards Programs:

     1. Rewards you will never use, are not rewards.
     2. Rewards you don't actually get, are not rewards.

Related Posts:
      Are You Getting Your Rewards?
      Are You Getting Your Rewards? Part 2

Are You Getting Your Rewards? Part 2

I have a follow up to my post about my credit card rewards from earlier.
You can see the original post here Are You Getting Your Rewards?

A week after I received my new rewards credit card, I received a phone call from the credit card issuer.   The customer service agent confirmed that I had received my card and had general information about the rewards program.  I explained that the new card looks exactly like the card I already had and wondered why they would both have the same logo for the rewards program but have different rewards.

That was the problem that started this whole thing.  I called to inquire about why my rewards were not the same as the ones advertised and I was told I would have to get a new card.  This new customer service agent however, said that they could have just converted my existing account to the new rewards program.  I of course agreed that that made sense and was what I originally had hoped to accomplish.   The agent upgraded my first account to the new rewards program as well.  In the process however, we also noticed that the interest rate on the new card was not a low as the first card.

Now I have two cards with the same company and the same rewards and my credit line split between the two cards.  Having two cards is actually fine with me since I basically have a back up.  I pay my credit cards off in full every month so the interest rate difference is not affecting me right now.  But the fact that the company issued a new card under the promotion of a new rewards plan and increased my interest rate without mentioning it to me, is very frustrating.  I have to wonder if that was the intent of the first agent.  I don't really know if the first agent was not knowledgeable to resolve my original issue, or if the first agent took advantage of the situation to earn credit for issuing a new card with a higher interest rate.  Remember that the agent had told me that I could call back after I receive the new card and have them transfer the remaining credit line to the new card and close the old account.   That seems like a lot of unnecessary work for me and for the company, but not if they get more interest paid to them in the long run.

Caution: Beware of rewards promotions and make sure that your rewards are not costing you more in some other way.  If I carried a balance on my credit card and paid interest each month, I would now be paying interest at a higher rate of 2 or 3% above the old card while I get a range of 1%, 2% or 3% on various purchases.  There are some bonus periods where I get up to 5% on specific types of purchases.  I think I would end up paying them more than my rewards over time in interest if I didn't pay off the credit card each month.

Rewards programs are promotional gimmicks to compete for purchases and use of credit cards.  Low interest rates don't entice you to actually use your card.  Even if you use your card and pay it off each month, the credit card company makes money on the fees each time you use the card.  The rewards are just a way to share some small percentage of those fees with you.  Points you will never use are not rewards.  Cash back cards that give cash back but charge you higher interest are not rewards.

Basically, rewards are not free.  Rewards that you actually use that don't cost you additional funds to earn can be beneficial for both you and the credit card company giving a mutual, not equal, benefit to both of you.   Personally, I like actual cash back cards on cards I can use for anything and everything.  I am not good at getting the benefit of my rewards points on various programs.  By the time I get enough points, they are about to expire or I don't have time to customize my shopping to use them.

Are You Getting Your Rewards?

Do you have one of those cash reward credit cards?  There are many of them and we see the competing advertisements online, on television, and in our bank statements.  But do you know if you are actually getting your rewards?

I recently made a deposit at one of my banks through a drive through banking window.  I was happily told by the teller that because I was such a good customer I would be receiving a 5% cash back bonus on all my charges on my cash back credit card.  That's nice.  I though I was currently receiving 1% on everything and then additional amounts for various other categories.  Several companies give 2% or more back for gasoline. 

I went to pay off my monthly balance as usual and I check to see what my rewards balance was in order to see if I was ready to apply the cash back to my current statement.  Unfortunately, I found that I only received the 1% cash back on everything but none of the additional bonus features.  I had received them on months prior but they seem to have stopped.  I also did not receive the 5% cash back on the charges for the month the drive through teller had mentioned. 

Later, when I had all my information, I called the bank to inquire what changed.  I was told that there was a new cash rewards credit card with the percentages I expected and they would be happy to open me a new credit card account and split my current credit line between the new accounts. 

Since the cash back rewards is specifically the reason I am using this credit card, I ordered the new card and expect to close account I now have when the time comes as the man suggested.  Of course, that is only after they adjust the credit line back to the full credit line on the new account.

My question is this:  Did they by their right to do so, change the previous card bonus program?  Or was it possible I had other promotional offers giving me the additional bonus features and I did not realize the difference between my card and the advertisements I was seeing? 

In any case, I think it's more than just a little underhanded for a bank to promote a new credit card with the same name logo as their existing credit card and not let existing customers know that their card is different.  They could do this every year with new promotions and lock the existing customers into their existing, likely lower, promotions and only give the new promotions to the new customers.  I understand that the promotions are exactly that - promotions to get new customers. 

What I learned:  I have to constantly monitor new options and promotions on all of my accounts to know if I am getting the lowest interest rate, the rewards or cash back I am expecting, or other points I think I'm getting.

What I plan to do:  First of all, I called the bank and inquired to find out why.  The bank offered a resolution and I decided to take it. 

In the future, I will set up a time twice a year at least, to verify my current rates and rewards on all my accounts.  I actually do a quick check each month when I pay my bills online, but this new additional check will be added to my twice a year Budget Planning Checklist. 

Cautions on this topic:

•  Pay off your credit cards every month if you use them to avoid interest charges.                   This subject of using credit cards is not intended to suggest that keeping credit card balances in   your financial plan is a good idea.  See related topics for discussions on the use of credit cards.
• Closing a credit card account as the bank suggested affects your FICO score because you  are lowering your available credit line.  Be sure to plan accordingly.  This could be a way for the bank to lower their risk without your awareness.
• Don't let rewards programs of any kind change the way you spend your money!  Getting rewards on how you've decided to spend is one thing.  Allowing rewards to change your plans is rarely a good idea and usually does not consider your overall goals and wisdom.  Stick to your plan and be diligent to stay on track. 

Words to the wise:

      Managing your finances is a constant effort.  That does not mean that it has to be hard, it just means you have to be diligent to keep paying attention so that when things change, you first notice and can respond according to your plan.

Grace to you.

Filing a Tax Return Extension

For those of you who have not yet realized that your annual 1040 tax return is due in the next few days, I thought I would just mention it so you don't get duped.

If you are not ready to file your tax return, you can file Form 4868 to request what is called an Automatic Extension for Time to File.  It's 'Automatic' because you just file the form and you automatically get the extension.  You then attach a copy of the Form 4868 with your completed tax return when you do file it.

The Automatic extension will give you 6 more months to file your return.  The extension avoids the penalty for not filing on time only. 

Warning:  This does not give you 6 more months to pay your taxes!

The extension allows you to estimate as best you can at the moment the taxes you owe and pay what you think you owe.  If you think your W-2 withholding or Estimated tax payments have covered your tax liability, your estimate would be zero owed and you may even expect a refund.  You will not get a refund until you file the completed return and the return shows a refund.

If you fail to pay your tax owed, or estimate incorrectly, you could owe when you file your return.  If so, you will also pay some penalties and interest for not paying your taxes by the deadline.   Again, the extension only keeps you from paying a penalty for not filing on time.

How to: 
   1.  Go to the IRS website at www.IRS.gov
   2.  Search for Form 4868
   3.  Print form, fill out form, sign and date the form
   4.  MAKE A COPY of the extension for you to file with your return later.
   5.  MAKE ANOTHER COPY for your own file.
   6.  MAIL the form your tax due date. April 17th 2012.

Information on the U.S. government website for the IRS Internal Revenue Service is free.
They may also link you to video instructions on YouTube.com provided by the IRS.

Additional Cautions:

     *   Don't wait 6 months to be almost late again, try to file as quickly as possible.
                You might forget and be late again.
     *   Don't wait to file because you owe money and think you can wait 6 months to pay.
                 The longer you wait to pay, the more interest and possible penalties you may have
                  to pay in addition to the taxes you owe.
     *  Don't expect a refund until you actually file your tax return completely.  You cannot
                 estimate a refund.  Sorry.
     *  The official site for the U.S. Internal Revenue Service ends with .gov !
                               www.IRS.gov
          This site has a lot of great information and is very usable.

I hope this is helpful information.  Leave a comment if you think I've left something out and help others as well.  

Tax Refund Scams

The Internal Revenue Service (IRS) issued a warning this week to taxpayers to beware of tax return refund scams.  In particular, senior citizens are being targeted and convinced or persuaded to file a tax return claiming a refund based on the American Opportunity Tax Credit.

The American Opportunity Tax Credit is a credit that some taxpayers may qualify for based on education achievements during the 2011 tax year.

Related scams come in a variety of disguises this time of year.  People who may have very little or no income are not required to file a tax return.   Thieves try to convince these taxpayers to file a tax return to get a refund based on nonexistent stimulus payments or the American Opportunity Tax Credit or some other credit.  Make no mistake - this is not legal. 

You can see a list of the most common tax refund scams on the IRS website under Tax Scams.

Here are some reminders to help you protect yourself from being scammed:

1.  The IRS does not initiate communication with you the taxpayer through email.  If you receive an email that claims to be from the IRS, you can forward that email to the IRS email address:  phishing@irs.gov as they
state on the IRS website www.irs.gov .

2.  Verify that you qualify for a tax refund or rebate by asking your own qualified preparer - not someone who has contacted you via phone or email or in person.

3.   Do not give your social security number to anyone who solicited you to call their 1-800 or other toll free number for any reason.  This may not only be someone trying to create tax fraud, but possibly identity theft that can affect your other accounts.   Send your own email to phishing@irs.gov to report any websites, 1-800 numbers or others who ask for your social security number.

4.  Do not give out your social security number or any financial account information to someone on the phone who claims to be a family member --- even if they sound like them on the phone!!  Let your family member come by the house to get the information they need.  Voices can be imitated even if they have a speech impediment of some kind.

5.  Contact the IRS for assistance at the IRS website: www.irs.gov by phone, internet, or local office.
Low income taxpayers and seniors are likely to qualify for free tax filing assistance.

 This list could go on and on.  But please take care of yourself and only work with someone who is qualified to assist you in filing a proper tax return.  You don't need to fear people contacting you - just always verify the contact with your local IRS office or even by calling the local Senior Center or local police station.

IRS information Available on YouTube

Yes, even the U.S. Government is using YouTube.com to provide information to people.

You can search YouTube for questions about tax forms and tax questions and get a video lesson on the topic.  Video is much more helpful than trying to search their website and find the exact verbiage you need.

Great to see the IRS provide information in as many forms as possible to give you access and help in filing your tax returns.

Let us know what you find helpful!

Filing Digital Copies Instead of Printing

We seem to be able to do most anything online.  However, for every transaction, account, or just to keep a record, you also have had to print out on your personal printer at home pages and pages of paper you may never look at again.  Not to mention the many pages that were unreadable and had to be printed multiple times.  And yet, you can't afford not to print important account and transaction information and receipts.

For the sake of record keeping as well as saving on your printing costs as well as your frustration level, you might consider creating PDF files and storing the information on your computer.


While most everyone is familiar with the free PDF reader from Adobe (c) that allows us to read PDF files, most of us do not spend the money to purchase the software to create PDF files.  Now you can get a free software that allows you to create PDF files by using the print function you are already familiar with.


CutePDF is a free software available for home use that allows you to create PDF files using the print function and selecting CutePDF as the printer instead of your ink printer machine attached to your computer or home network.

You can 'print' a copy to a PDF file and store it on your computer.

Caution:  If you store things on your computer you should also have a backup and recovery plan for computer files in case you have computer failure!

How to:   Click here to CutePDF to download and install your free CutePDF software
When you install this software, you can select print and choose CutePDF when the print select printer pop-up window appears.

Saving Money:   To save money, you may also want to make CutePDF your default printer so that you always print to CutePDF first, then print to your ink printer only when you are intentional about needing a hard copy print out.

Ink cartridges for your printer can cost your around $50 per cartridge.  Even if you are printing in black and white, your printing at home could be costing you anywhere from .15 cents to .30 cents per page.  Copying the PDF files to a thumb drive and going to a nearby Kinko's or other copy center you can usually print for .03 cents to .10 cents per page for black and white and a little more for color copies.

Going Green:   Companies would like to make you think that you are a better more conscientious consumer if you choose to go paperless with your monthly statements and bills.  While this can be true - it can also be FALSE depending on your need for statement documentation.  Are they really asking you to do this for the environment or are they just shifting the cost of printing to you and actually being much less concerned about the environment.  If you print statements and bills for tax records or any other reason, it is likely to be more cost effective and much better for the environment for the large companies to print the statements on more economical printers that use toner cartridges that are much more likely to be recycled than those for home printers.

Go paperless only when it makes sense to go paperless and don't assume that your printing at home only when you need to print is a better option for you or the environment.  Do the Math for yourself.

Leave a comment and let me know how it works for you.

Requesting Copies of Prior Year Tax Information from IRS

You can request a transcript of your prior year tax information from the IRS by either going online to the IRS website at www.irs.gov , by calling the IRS, or by mailing in IRS Form 4506-T.

This is available to you free of charge from the IRS.

If you paid someone to prepare your tax return, you can also request a photocopy of the return from your paid preparer. Usually you will be charged for the photocopy based on the number of pages.

There are two choices when ordering prior year information from the IRS:

1.  A Tax Return Transcript :  This is not a photocopy of your tax return but it is a transcript listing of the information on your tax return as it was originally filed.

2.  A Tax Account Transcript :  This is similar to the tax return transcript, but will also include additional information such as filing status, marital status, taxable income and and later adjustments to the return made by the IRS or by you.

If you are going to order you might want to go ahead and order the more complete Tax Account Transcript.  If you are not sure if any adjustments were made to your return in prior years, this Tax Account Transcript would give you that information.

Consider: Consider ordering the current year and 3 prior years for your Tax Account Transcript records to give you a more complete history of your records and protection.

How To:   www.IRS.gov  to download IRS Form 4506-T

Password Safe to Manage Passwords

How many passwords can you possibly keep up with?

There is a free version of an application for your home computer that allows you to store up to 25 passwords for various online activities.  Actually, the application allows you to save up to 25 passwords in 1 Safe File.  You can add additional Safe Files. 

I use a different Safe File for my home and another one for social networking sites, retail sites, and anything that is not a financial account or related to my house.

How To:  The software is called Password Agent and you can download the free version of the software  by clicking on  Password Agent by Moon Software.

Please leave a comment and share any updated information for this topic.

Establishing Credit 

Every adult needs to be aware of the credit record and credit score known as their FICO score. Couples need to be aware of both their joint credit and their individual credit history and scores.

The first step to establishing credit is finding out if you already have a credit report and making sure that report represents an accurate credit history for you.  See my post on Requesting Your Credit Report for more information.   If you are a young adult, single, newly single for any reason you may want to check you credit and make sure you are continuing to establish good credit going forward.

Credit is established by financial institutions such as banks, credit unions, credit cards, mortgage companies and more reporting to the major credit reporting agencies.  These agencies typically report monthly and they report both the highest dollar amount of credit you have used as well as the payment history on your accounts.

So, to establish credit you need to use some form of credit, such as a credit card, auto loan, mortgage, or other form of borrowing money from a reporting financial institution.

To establish credit you will need a minimum of these three things:

1.  Personal checking account in your name only.

     If you use a bank or credit union for your mortgage or other account with your spouse, 

     you can go to the same bank where you have an account and open a checking account

     there where you already have some history and are an establish customer.

     Before opening an account, make sure you check the minimum balance requirements to 

     avoid having fees on the account.  If the bank minimums are too high for you, check a local

     credit union for free checking or the lowest fees.

2.  Personal savings account in your name only.

     A savings account is almost always opened with a checking account at your bank or 

     credit union.  The credit union will require a savings account with a minimum balance

3.  A credit card in your name only (not joint with a spouse or parent)

     Again, if you have an account at a bank or credit union, you may be able to get a credit card 

     with at least a small credit line due to your existing customer status.

     Before opening a credit card account, be sure to look for a credit card that does not have an

     annual fee.  You might also try to find a card that has cash back bonuses.

     Be sure to manage this credit card well and pay off the balance in full every month to avoid

     interest charges.  You are not trying to build up debt, you are trying to show a history of 

     paying your bills on time and in full.

Cautions:

a.  If you are married, see additional posts on joint finances regarding credit.

b.  This post is not intended to encourage borrowing money or encouraging you to maintain a debt balance on any account.  See other posts regarding the wisdom of being debt free and how you can be debt free and still have a good credit history.

Related Posts:

Benefits of a Credit Union
Requesting Free Credit Reports

How are some other ways you have found that you can safely establish credit or improve your credit record? 

Tax Season: Step 1 Gathering Records

It's that time of year when we start seeing commercials for tax refund loans, free tax filing and people on busy intersections dressed like Uncle Sam or Lady Liberty waving us in to the office of tax preparers to file our tax return.  All these reminders begin to push our panic button because we are rarely ready to file our tax return. So here's a few things to get you started.

1.  Find last year's tax return:   Last year's tax return can help you get organized for this year's tax filing.
2.  Start a list List items on your last return that are the same as this year.
     a.   Form W-2 's from your jobs
     b.   Form 1099's from bank accounts for interest and dividends
     c.   Misc Form 1099's for work, rent income, or other miscellaneous income
3.  Contributions for the year can include donations to non profit organizations as well as donations of  clothing, furniture, or other household goods.  You should get a receipt for all donations.
4.  Home Improvements:  Some home improvements may provide tax credits for the energy savings they provide.  These items may include a new heater or air conditioner, solar screens, storm doors and windows, and insulation.
5.  Sales Tax is deductible if you itemize your deductions.  A sales tax table is used to calculate this amount based on your income.  However, if you have large purchases for the year such as an automobile, home improvements, or other extraordinary purchases, you may be better off by adding up your sales tax for the year instead of using the table provided amount.

This is at least a start.  It's still early, so you still have plenty of time to gather your records. 

W-2's are In the Mail

Employers have until - January 31st each year to issue tax forms W-2 to their employees.  Most are mailed via US Postal Service the last week of January.  So all of your W-2 forms should be received by you sometime this week. Some employers provide the printed form W-2 in person or include it with the January paycheck, but they are still required to have them ready and on their way to you by today.


If you do not receive your W-2 form, consider the following:


Contact your employer and ask when the Form W-2 was mailed and determine if you might still be waiting on the mail.  Keep in mind that first class mail generally takes 2 to 4 days.  If a reasonable amount of time has passed, you can ask them to re-send the Form W-2.  You should verify that they have the correct mailing address for you if you request a duplicate.

You still are required to file your tax return Form 1040 by April 15th even when you do not receive your Form W-2.  You may choose to file an automatic extension for your filing date on Form 4868 to allow you time to get your Form W-2.  Another option would be to file Form 4852 - a Substitute Form W-2.  This form is provided by the IRS to allow you to estimate your income and withholding taxes that would be reported on your Form W-2.  This is just an estimate and you will want to be very accurate in using this method.  The most likely accurate information to estimate with will be the year-to-date earnings and withholding reported on your last paycheck for the tax return year. 

Forms and instructions are of course on the IRS website at www.irs.gov  along with useful information created by the IRS to help you on YouTube.com . 

Resource Links to IRS forms:
Form 4852 : Substitute Form W-2 Wage and Tax Statement
Form 4868 : Application for Extension of Time to File

Link to IRS topic on YouTube