It seems like the more new year financial resolutions I share, the more pop up. Thanks to Real Simple for today's great tips for shrewd consumers.
* Build emergency savings. I always loved the old-fashioned Christmas Club accounts at my banks. Even back when I made only $3,000 a year, I still eked out fifty bucks from my monthly paycheck deposit to put away in savings for Christmas. (Of course, back then a savings of $600 was a fortune, plus if an emergency occurred, money was there to pay the bill.) Even today, I still deposit some cash to have at the ready if needed. A recent Bankrate survey found that about 40% of all Americans wouldn't be able to cover an unexpected $1,000 expense. Pretty frightening when we consider the cost of healthcare alone. What I do – and the easiest method – is to set up an automatic deposit; this amount comes right out of my paycheck so I never see the money to feel its loss.
* Check credit reports. Long-time readers know this advice pops up pretty frequently. With such a plethora of scammers these days and in all manner of deceit, we must be diligent to ensure Tammy and Tommy Thief haven't done damage to one of the most important aspects of our financial lives. As iterated time and again, consumers now have free access yearly to a report from each of the three agencies (and nominally pay for any others desired). Notify those folks at the Big Three credit reporting agencies - Experian, Equifax, and TransUnion - to place fraud alerts or, better yet, freeze all credit reports to eliminate the crooks from opening new accounts in your name. (www.annualcreditreport.com is the only safe site to obtain your reports.)
* Beware the Tax Man cometh. January is the month, as tax documents begin arriving, to file these authentications in prepared folders. Certainly, everyone has a favorite way to do this, but I'll offer the Phillips' household method. Each month, Hubby uses a spreadsheet to list all categories and, when I've checked all our bills, inserts them into their special slots. Then, along with the spreadsheet, I make a list of all deductions to which we're entitled. Then, as documents appear, I file each of those same categories in a separate manila envelope and mark off on my checklist. (For example, although we're not big stockholders, we still must pay taxes on any dividends for the prior year. Therefore, all statements go into that envelope with a checkoff.) Clearly, all deductions don't come in a single mailing or even at all. Take medical bills for instance; it goes without saying you've saved every charge you've paid throughout 2019. Collect and pop them in the "Medical" file; take out your "math" brain (otherwise known as a calculator in my case!) and begin adding by specific field: doctor, dentist, hospital, tests, drugs, mileage, and any other medical charge that might appear as a tax deduction. Once you've noted the whole kit and caboodle in all categories (with your own filing method), you or your accountant is ready to start the big step towards getting rid of that nasty headache.
* Prepare end-of-life documents. Some plans are more urgent than others and advance-planning documents fall in my Top Five. We all know someone who dies unexpectedly (my husband's niece was hit by a car right outside her home two weeks ago and died instantly) or dreaded dementia closes its claws around a loved one's memory; therefore, it's imperative to plan ahead for unexpected scenarios. Whether a short will that simply leaves your assets or one much more involved, including a revocable trust with an incapacity clause, and, certainly, a durable power of attorney/advanced directive, among others, today is the day to take care of these matters! Please don't leave your family (or a judge) to make hard decisions when you're no longer able to do so for yourself.
Ellen Phillips Contact Ellen Phillips at consumerwatch@timesfreepress.com.