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5 things that undermine automating your finances

This article is by staff writer Lisa Aberle.

Ever feel like your finances are managing you instead of you managing your finances? Late fees pile up, interest charges multiply, and as soon as you find your 401(k) participation paperwork, you’ll fill it out and start participating.

If you felt stressed reading that last sentence, you can understand why people choose to automate their finances. The fewer decisions you have to make in a day, the better.

Automating your finances can help put your financial life in order and free up some of your time … or it could turn into a costly experiment. The trick is to create a solid financial system — and to monitor it.

Here are five things that can derail your financial progress if you put a faulty system on auto-pilot.

1. Not focusing on cash flow

Investing 101: A primer on mutual funds

This article is by staff writer William Cowie.

[This is the first installment in a series examining index funds. We’ll discuss the managed mutual fund market first to form a basis of comparison with index funds. In Part II, we will look at how an index is calculated and what an index fund is. In Part III, we'll consider how to evaluate index funds and where to buy them.]

We can’t predict the future – so when it comes to investing, minimizing risk is the name of the game. One highly effective strategy to help limit investment risk is through diversification, and most of us achieve it by investing in mutual funds.

The identity theft no one is talking about

This article is by staff writer Jacqueline Leppla.

It’s bad enough when some scammer gets your credit card, but what happens when they steal your access to health care? Even worse, what if that person is a member of your family or a member of the health care field we are supposed to trust?

It’s not an isolated concern. Medical identity theft represented 42.5 percent of the breaches identified in 2014 according to the Identity Theft Resource Center. And the crime appears to be growing – another consumer advocacy group, the Ponemon Institute, said medical identity theft incidents increased 21.7 percent, costing victims more than $13,500 to resolve.

What sparked my investigation into medical identity theft

When the oral surgeon recommended that our daughter have her wisdom teeth removed, we thought we knew what to expect both medically and financially. Morgan’s two sisters underwent this procedure in the past, and we adopted a brave “Let’s get this over with!” attitude as we scheduled her operation.

We expected the least painful part of the procedure to be the surgery bill because the girls are covered under both their parent’s dental insurance. It was an unpleasant surprise to learn from the oral surgeon’s billing manager, “After checking with your insurance, we estimate that your daughter’s surgery will cost you about $1,200 out-of-pocket since she has exhausted nearly all of her benefits this year.”

Something was wrong!

Summertime reads: How to get cheap or free books

This article is by staff writer Honey Smith.

I have always been a big reader. Maybe it’s the fact that I’m introverted — so introverted, in fact, that I almost lost my fourth grade reading challenge.

  • First, you had to go up to the teacher and tell her that you’d read something.

  • Second, after you told her, she gave you a big sticker and you had to go up to your name on the wall in the cafeteria — in front of everyone! — and put the sticker by your name. No way, Jose!

When my teacher contacted my mom and said that she was worried I wasn’t reading enough, my mom burst out laughing.

Ever used a zero-percent credit card offer to make a purchase?

This article is by staff writer Ryan Takach.

Imagine a scenario where you’ve got the money to make a large discretionary purchase and you’re given the option to finance it through the retailer at interest or open a credit card with an introductory zero interest rate. What would you do — pay cash or just finance it?

I get a lot of credit card offers that go straight to the shredder, but every now and then something comes along that looks interesting. I only have a few cards, so opening a new line of credit is a decision that I take very seriously. The card companies are offering enticing incentives to sign up: cash back, airline miles, point redemption systems, discounts on different shopping categories, and — most importantly — zero interest for a fixed term (usually 12 months).

How to navigate relationships as your finances change

This article is by staff writer Lisa Aberle.

Have you ever lost a close friend because your financial situations were too different? Maybe your friendship started when you were on similar financial ground, bonding over bowls of ramen noodles, for instance. But once out of college, your first job paid a lot more than theirs did; or perhaps, the shoe was on the other foot — you’re still flipping burgers and your friend is working in the corporate world with a bigger paycheck.

Benjamin Franklin once cautioned:

“Beware of little expenses; a small leak will sink a great ship.”

But that’s not the only ‘ship’ finances can affect. As you improve your financial situation, you may find that your friendships change too.

While not every relationship (oops, I did it again!) can be saved, you can patch most holes in your friendships by being aware of common problems.

Meal plans and delivery programs — costly or cost-effective?

This article is by staff writer Honey Smith.

The three biggest items in most people’s budgets are usually housing, transportation, and food. That’s because they are needs; but like most needs, costs can range from the inexpensive, no-frills version to the outrageously expensively extravagances seen on some reality TV shows. For example, you could live in a studio apartment or a mansion, take shanks’ mare or drive a luxury car, slap a PB & J together at home or eat out at a five-star restaurant.

Why you should avoid sales tax holidays

This article is by staff writer Lisa Aberle.

It sounds good, doesn’t it? For one day per year, skip paying sales tax on — depending on the state — school supplies, clothing, computers, hurricane supplies, and other essential items.

After all, depending on your state’s tax rate, you could save up to 7 percent off your purchases.

The brief history of sales tax holidays

Although the first sales tax holidays — no sales tax on automobiles! — were offered by Ohio and Michigan in 1980, New York gave birth to the modern sales tax holiday in 1997, this time for clothing. New York’s goal was to keep residents from shopping in nearby states which had lower sales tax rates.

Overcoming the fear of investing

This article is by staff writer William Cowie.

Investing is the most important element of our financial future — but sometimes it takes a while before we really get it, so to speak.

Fortunately, I think it’s fair to say most of the readers here at Get Rich Slowly get it. But I’m willing to bet that there are still a few who might get the concept but have yet to put it into action.

Biggest success factor: Pull the trigger

There are many reasons why investing believers have not turned into investing doers. These two come immediately to mind: