Mistakes

9 Financial Mistakes You're Making at the Doctor's Office

Kat Tretina — Mon, 04 Jun 2018 08:30:18 +0000

If you have an ongoing medical condition, you know how expensive health care can be. Medical costs have skyrocketed the past several years, leaving people facing the very real possibility that doctor's visits, prescriptions, and procedures could deplete their bank account or even land them in debt.

There are ways to make medical care more affordable. However, a lot of people miss out on some important discounts. Below, find out what costly mistakes you might be making at the doctor's office.

1. You don't comparison shop for prescriptions

When it comes to medication, the price you pay can vary from location to location. If you go to the same pharmacy every time and never shop around, you could be overpaying for your prescriptions.

GoodRX is a site that allows you to compare prices at several different local pharmacies at once, ensuring you get the best price. According to the site, if you had a prescription for the antidepressant Lexapro and filled it at Walmart, you'd pay $46.29. But, if you filled it at Costco, you'd pay just $10.50.

2. You don't ask for generic medication

If your doctor prescribes you a new medication, going with a name brand can cost you hundreds or even thousands of dollars. For example, if you were to fill a prescription for Crestor, a medication for high cholesterol, it would cost you about $825 for a 90-day supply, according to Drugs.com. By contrast, if you got the generic version — rosuvastatin — you'd pay just $96 for the same supply.

When you're at the doctor's office, be sure to ask your doctor if there is a cheaper generic version available.

3. You don't use a discount prescription card

If you don't have insurance and need to fill a prescription, you can expect a hefty bill. However, you might not have to pay the sticker price on your own.

There are free discount programs you can sign up for to get your prescriptions at a much cheaper price. For example, if you sign up for a program like FamilyWize, you can get up to 90 percent off your prescriptions' prices. (See also: 7 Ways You Can Save Money On Prescription Medications)

4. You don't show up to appointments

Many doctor's offices are cracking down on people who miss appointments by charging them no-show fees. These fees can run anywhere from $20 to the price of a full visit, which can easily cost you hundreds.

If you can't make an appointment, contact the office as soon as possible to cancel or reschedule. If you do so early enough, you can prevent no-show fees from being added to your account.

5. You don't always pay your bills on time

If you owe your doctor money but don't pay your bill on time, you can quickly rack up late fees and interest charges. Over time, your bill can balloon thanks to those penalties. What's worse, if your doctor decides to send your delinquent account to a collections agency, your credit will also take a hit.

It's important that you make all of your payments on time. If you're in danger of falling behind, contact your doctor's office right away to see if you can get on a more affordable payment plan. It's better to be upfront about your situation than to ignore it.

6. You use the emergency room for illnesses and minor injuries

If you go to the emergency room for minor injuries or illnesses like strep throat or the flu, you could end up spending thousands. According to a 2016 report by the Health Care Cost Institute, an emergency room visit cost an average $1,917. That's an awful lot to pay for the flu.

In many cases, going to an urgent care facility rather than the emergency room can be a more cost-effective option. An urgent care visit typically costs between $100 and $200 out of pocket. These facilities can handle most minor illnesses or injuries, including broken bones. (See also: Urgent Care or ER? How to Decide Where to Go)

7. You don't negotiate costs

Although you can't negotiate costs like copays or coinsurance — your insurance provider determines those — you can negotiate services and treatments that aren't covered by insurance.

If your insurance provider refuses to cover a necessary service, explain to the office administrator that you'll be paying out of pocket and ask if they offer any discounts for cash-paying patients. In some cases, you may pay significantly less than if you used insurance. (See also: 7 Ways to Negotiate Medical Bills)

8. You see out-of-network providers

If you've always gone to the same doctor, finding a new one might be a real pain, and you might put off finding someone else. However, if your current doctor is out of your insurance provider's network, this can be a costly mistake.

Depending on the type of insurance plan you have, your insurance company might only cover a portion of a visit with an out-of-network doctor. If you have an HMO, they might not cover any of it, and you'll be solely responsible for the charges. Taking the time to find a doctor within your network can save you money (and headaches) over time. (See also: How to Choose the Best Primary Care Physician)

9. You don't keep copies of your test results

If you need to have an MRI, CT scan, or blood work done, ask the doctor or lab technician for a copy of your results. Keeping a copy for yourself can help you in the future if another doctor wants to run the same tests. If you have a recent version, you can skip getting another round of expensive tests, saving you a lot of money.

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This article is from Kat Tretina of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Common Mistakes to Avoid When You Enroll in Medicare

Dan Rafter — Tue, 01 May 2018 08:30:19 +0000

If you're close to retirement age, you might soon be eligible for Medicare. The federal health insurance program is an important resource, helping you cover the costs of hospital stays, doctor's visits, and prescription medication. The challenge? Signing up for Medicare can be complicated. It's not unusual for new enrollees to make mistakes, and these mistakes can prove costly.

Your goal is to sign up for Medicare services on time and correctly to avoid financial hits. Here are some common mistakes to watch out for when enrolling in Medicare coverage.

Thinking you haven't worked enough to qualify

You might think that just because you haven't worked much, or at all, that you can't sign up for Medicare. That isn't true.

To be enrolled in Medicare Part A, you might hear that you need to rack up 40 eligibility credits by paying Social Security and Medicare payroll taxes. That comes out to about 10 years of work for most people. But this only means that you won't have to pay for Medicare Part A coverage, which covers medical services provided by hospitals. You can still sign up for Medicare Part A if you haven't worked long enough to earn those 40 credits. You'll just have to pay a premium.

Some people are automatically enrolled in Medicare Part B — the insurance that helps cover doctor visits, trips to the outpatient clinic, and any expenses for medical equipment — when they sign up for Part A (together, the two comprise Original Medicare), while others enroll separately. You don't need any work credits to sign up for Medicare Part B. You can qualify for this part of Medicare even if you've worked fewer than 10 years. You just need to be 65 or older and a U.S. citizen or legal resident who's lived in the country for at least five years. The same holds true for Medicare Part D, which covers prescription medications. As long as you already have Parts A and/or B, you can enroll in Part D. (See also: How to Make Sense of the Different Parts of Medicare)

Signing up too late

Medicare.gov is clear about the risks of signing up too late for Medicare. In many cases, you'll need to sign up for Medicare coverage during your seven-month initial enrollment period. That period includes the three months before you turn 65, the month you turn 65, and the three months after.

There is an exception: You can delay signing up for Medicare coverage if you have health insurance coverage past the age of 65 from an employer for which either you or your spouse still actively work. If this employer has 20 or more employees, you can delay Medicare enrollment until the job ends and not face a penalty. If your employer has fewer than 20 employees, you should sign up for Medicare when you are first eligible.

If you do sign up late — especially for Part B coverage — you will face a stiff penalty. According to Medicare.gov, your monthly premium for Medicare Part B will be 10 percent higher for each full 12-month period that you could have had this coverage but didn't sign up for it. And that penalty will last as long as you are enrolled in Part B coverage.

Here's an example from Medicare.gov: Say your initial enrollment period ended Sept. 30 of 2009. You didn't sign up for Part B coverage until the general enrollment period in March of 2012. Your Part B penalty will be 20 percent. That's because you waited two full 12-month periods before signing up.

There is a penalty for signing up late for Medicare Part A, too, if you don't qualify for premium-free coverage and instead have to pay. Again, your monthly premium might increase by 10 percent. You'll have to pay this penalty for two times the number of years you could have had Part A coverage but didn't sign up for it.

Again, here's an example from Medicare.gov: Say you were eligible for Part A coverage for two years before finally signing up. You will have to pay the higher premium for four years — twice the number of years in which you waited to enroll. (See also: 5 Common Medicare Myths, Debunked)

Skipping Medicare Part D

Medicare Part D helps cover the costs of prescription medicine. It's not free — you'll have to pay a monthly premium. Because of this, you might be tempted to skip this coverage, especially if you're healthy today and you don't take any medications.

Don't. You can't predict how healthy you'll be in the future. You can't predict whether one day you will need costly prescription medications.

Sign up for Part D coverage as soon as you are eligible. Like with Medicare Part A or B, if you wait too long — any continuous period of 63 days or more after your initial enrollment period ends, unless you have approved medication coverage from a different source — you will face a penalty added to your monthly fee.

Not understanding what open enrollment means

Medicare does offer its own open enrollment period, which runs every year from Oct. 15 to Dec. 7. If you are new to Medicare, though, this isn't when you must sign up. New enrollees get their own enrollment periods.

The open enrollment period starting Oct. 15 is reserved for those already receiving Medicare and who want to change their coverage choices for the next year.

If you are enrolling for the first time, you still need to sign up for Medicare sometime during your seventh-month initial enrollment period.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Ways to Bounce Back After a Work Mistake

Paul Michael — Mon, 19 Feb 2018 09:30:11 +0000

You messed up at work. We've all been there. Whether it was a small error or a huge mistake, the foremost thought in your mind is, "What can I do to fix this?"

If it was a genuine mistake, you should be able to make it right. It will take some work, a little pride-swallowing, and time to help the wounds heal. But you can do it. Here's how.

1. Acknowledge your mistake

This is no time to play the blame game. You also cannot run and hide from the truth, or sweep your mistake under the rug and hope it won't get noticed. It will. If you wait until your mistake is discovered, it will be much harder to recover.

Take, for example, the true story of John (not his real name), an account manager in a London advertising agency. After a horrendous call with the client, he slammed down the phone and started berating her to the entire department. How she was clueless, a result of nepotism, didn't know the product, and various other barbs. The thing is, John had slammed the phone but had not actually hung up. She heard everything.

He had two options at this point; say nothing and lie about it to his boss if she reported the incident; or, go straight to the boss and admit the huge screw up. John did the latter. He was rightly screamed at; this was an important client. But, by telling the boss immediately, he gave him the chance to be proactive with the client, calling her immediately to explain that John had been under intense pressure, was taking a leave of absence to recuperate, and would not be on her account again. It worked. John kept his job and the agency kept the client. (See also: 8 Career Moves That Prove You're Finally a Grown-Up)

2. Make a sincere apology

After fessing up to the mistake, the next step is to apologize to the right people for the error. Depending on the kind of company where you work and the management structure, you may be about to eat some hefty slices of humble pie.

Your direct supervisor is the first on the list, and if you followed step one, the apology is a natural next step. Your supervisor will probably tell you just who to talk to next to make amends. If a customer was affected, you may have to reach out to them by phone or email and make a genuine apology. If other people at work were affected by your actions, they deserve an apology, too; especially if they had to work overtime to fix things, or their own job performance was impacted by what you did.

Apologizing is certainly not easy; we all learned that in childhood. However, it's the adult thing to do, and can go a long way to making things right. But it must be completely sincere. Should any sarcasm creep in, or you look like you're making the statement at gunpoint, it can make matters worse.

3. Realize that very few excuses will do

Most of the time, a work mistake is just that. You messed up. You didn't check the right box, didn't see a glaring error, or did something that hurt the success of the company. Once you have admitted the mistake and apologized for it, don't be tempted to follow that with, "However, in my defense …" and an excuse.

For example, you may have been working more hours than usual, but so have a lot of other people. Are they making mistakes, too? Maybe your new puppy is howling all night and you're not getting any sleep. Is this the company's issue? You may well be going through a tough time with your partner. Again, is your relationship the concern of the people paying your wages?

The only good excuse is one that is impossible to fault you for: a sudden bereavement in the family; a major illness; an act of God. Other than that, keep the excuses for the schoolkids.

4. Do whatever you can to fix the mistake

You've admitted the mistake, you've apologized, and you haven't used an excuse. Now you have to clean up the mess you made. Hopefully, it's a small problem that can be resolved quickly and easily without the need for other members of staff to come to your aid. But if it's a bigger problem and you need help, don't be afraid to ask for it.

Most people that you work with will understand the situation you're in, and if they were faced with the same issue, they'd want help from their co-workers, too. If it is going to require a lot of time and effort from these people, find a way to make it up to them. It could be as simple as bringing in breakfast one morning, or offering them any kind of favor in return.

If the mistake became something newsworthy, address that as well. Talk to your boss about extending an interview to the newspapers and media outlets, explaining the mistake you made and absolving the company of any blame. It may require you to suck it up and look a little foolish for a while, but today's headlines are tomorrow's recycling. Whatever the mistake was, you need to make sure that the whole situation is resolved to the company's satisfaction, and that everyone is ready to move on.

5. Work diligently to ensure it never happens again

After the mistake has been rectified, the next step you must take is to identify why it happened, and take action to ensure it never happens again. Did you delegate a task to someone who was not ready for that kind of position or responsibility? Did you skip a step in the process that seemed pointless, but that proved to be essential? Was it an accident that could have been prevented if different safety measures had been implemented? Whatever the cause, it needs to be found, understood, and eliminated.

You must also make sure the right people know about the changes you are making to stop the mistake from happening again. Run your plans by your superiors, and show them that you are being proactive in preventing this issue from ever arising again. They will appreciate your diligence, and it may also make them look at other possible issues within the company. In short, once you've got the horse back in the stable, you need to bolt that sucker tight.

6. Do not let one mistake change who you are

The dust has settled. Everything is back to normal. You're ready to get back to the daily routine … or are you? A significant mistake can have a lasting negative impact on your emotions, and you may have to work hard to overcome it.

Remember: It was a mistake. It wasn't an act of malice, or something you did on purpose. Mistakes happen. If you are now terrified of making that mistake twice, you could become a much less effective employee. Do not let this one hiccup, even if it was a big one, get in the way of what you're capable of.

Get back in the game and learn from that mistake without letting it bring you down. Even if it takes a visit or two to an occupational therapist, it's worth it.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Credit Card Mistakes to Get Over by Age 30

Dan Rafter — Wed, 07 Feb 2018 10:01:04 +0000

Your 30th birthday is fast approaching. There's no denying it now: You're an adult. But when it comes to those credit cards in your wallet, are you still acting like a kid?

Credit cards are an important financial tool. When you use them properly, they can help you build your credit score and even rack up useful rewards. But if you misuse your cards, you'll wind up facing a growing mountain of high-interest debt — one that only grows as you move past your 30s.

You need to stop making these credit card mistakes by the time you're 30. If you do, you might be surprised at how much better your financial health gets as you grow older.

1. Making only the minimum payments

The problem with credit card debt is the high interest rates. The debt grows quickly, especially if you carry a large balance from month to month. And if you only make the minimum required monthly payment, it can take you years to pay off your credit card debt.

Say you have $6,000 in credit card debt at an interest rate of 18 percent. If you only make your minimum payment (usually calculated at 3 percent payment — or even less — of your balance) each month, it will take you 210 months, or more than 17 years, to pay it off. You'll also pay more than $5,600 in interest on that debt. And those figures will be even worse if you continue to add to your debt while you're making those minimum payments.

The lesson is clear: Pay more than the minimum, each month, until that debt is paid off. (See also: All the Ways Minimum Payments Are Evil)

2. Paying late

Paying your credit card bill late can have a devastating impact on your credit score. One late payment can send your score tumbling by 100 points. Your late payment will also remain on your credit reports for seven years.

Fortunately, a payment won't be listed as officially late for credit score purposes until it is 30 days past due. But the card company will still probably charge you a late fee of $27 or more. If you're a couple of weeks late, make that payment immediately. (See also: 5 Simple Ways to Never Make a Late Credit Card Payment)

3. Not paying at all

Your credit card debt might be so overwhelming that you decide to stop paying on it completely. This is a big mistake. If you miss your credit card payments for six months, your credit card company will issue what is known as a charge-off; a declaration that the institution considers your credit card debt a loss on its balance sheet. By the time your credit card account gets to this point, your creditor will have probably shut it off, meaning that you won't be able to use your card for future purchases.

This doesn't mean that your credit card issuer won't try to get you to pay up. You are still responsible for paying off your credit card debt. You might now, though, have to deal with a collections agency. (See also: Account in Collections? Here's How to Fix It)

A charge-off will show up in your credit reports for seven years. It will also seriously weaken your credit score. If you are struggling to pay even your minimum monthly payment, don't ignore the problem, or your bill. Instead, call your credit card company. Your creditor might be able to come up with a solution that lets you stay current on your payments.

4. Not reading your credit card statements

As more of us pay our credit card bills online, it can be easy to ignore the monthly statements that come with them. This, though, can be a costly mistake. What if someone has been making fraudulent purchases with your card? You'll never know if you don't read the statement.

Yes, it can be boring. But take time to read your statements — even if you no longer receive paper versions — before you make your credit card payments. If you do find suspicious transactions, call your credit card company immediately.

5. Closing unused cards

You might think it makes good financial sense to close a credit card account that you rarely use. But doing this can hurt your credit score because of something called your credit utilization ratio.

This ratio measures how much of your available credit you are using. The higher your ratio, the more of a negative impact it has on your credit score.

Say you have $12,000 of available credit and you owe a total of $5,000 on your cards. You are using about 42 percent of your total available credit. Now say you close a card with a credit limit of $2,000. You just lowered your overall available credit limit. You are now using up $5,000 of $10,000 in available credit, which will have boosted your credit-utilization ratio from 42 percent to 50 percent without making a single purchase. (See also: This One Ratio Is the Key to a Good Credit Score)

Keep those credit card accounts open, even if you don't plan on using all of them. You want your credit utilization ratio to be as low as possible.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Don't Make These 7 Common Mistakes When Choosing a Career Path

Paul Michael — Wed, 24 Jan 2018 09:30:05 +0000

Choosing a career is no easy task. Deciding what you want to do for the rest of your life is tough to say the least. What if you make the wrong choice? What if you choose something that makes you miserable, or leads to stress and money worries? What if something terrible happens to that industry?

There are so many what-ifs when it comes to choosing a career. But if you avoid making these big mistakes, you should be in a good position to make a wise choice.

1. Ignoring signs of industry decline

Industries come and industries go. At one time, there was a thriving buggy whip industry, but it disappeared when the automobile became popular. Sign painters used to get plenty of business until machine-cut vinyl and large-scale printing replaced that industry. Very few career choices are bulletproof, and you need to look to the future to see if the industry you want to be in has a good chance of being around in 20 years' time.

For example, mortgage brokering took a big hit during the Great Recession and the number of people working in that profession fell nearly 45 percent in the decade between 2007 and 2017. While the housing market bounced back after the subprime mortgage crisis, regulations have changed the industry for good and made it harder for mortgage brokers to earn the kind of money they used to make.

Do some research. Look at industry trends. Is yours growing, staying steady, or in decline? An unwanted career switch could be in the cards in five to 10 years if you're not careful. (See also: 8 Ways to Escape a Dying Industry)

2. Choosing money before anything else

They say money can't buy happiness. Tell that to all the people struggling to pay bills and put food on the table. However, while money — and the security it brings — are major considerations for any career path, they shouldn't be the only aspect you focus on.

Taking a job purely for the money sends you down a path that will almost certainly result in unhappiness. We spend the majority of our lives working, and if you are miserable for that amount of time, you will have wasted your life. Sure, you'll have a nice car, big house, and fancy clothes, but if you spend every day hating the job that provides those things, you won't get much enjoyment out of them.

Strike a balance between decent pay and a fulfilling career. You may make a little less money, but you'll be better for it. (See also: 6 Times a Higher Salary Isn't Worth It)

3. Taking a job with limited prospects for growth

In most industries, there are ladders to climb. You start off on the bottom rung, you work hard, pay your dues, and climb to the top. Corporate America is a prime example of that, with people coming in as junior managers and rising all the way to senior vice president, or even CEO.

However, that may not be the case for your industry, and you must be sure you're OK with that. Are you going to be content with a career that does not have those promotions and power shifts? Are you going to struggle to get pay raises in an industry with a flat career path? If you're driven and want rewards for your hard work, you should reconsider any industry that won't give you those opportunities. (See also: 9 High-Paying Jobs That Didn't Exist 10 Years Ago)

4. Doing what your parents want you to do

There's a certain amount of pressure that comes from upholding the traditions of the "family business." Your father was a mechanic, his father was a mechanic, your two brothers are mechanics … so you'll be a mechanic. From military careers and law, to plumbing and real estate, there are thousands, if not millions, of people who have simply followed in the footsteps of their parents. And a good portion regret it.

Is that what you really want to do? Will it make you happy? Are you doing it just to make Mom and Dad happy? Remember, this is your life, and you only get one shot at it. Follow your passion.

5. Picking something at random

"I don't know what to do, but this looks OK. I can always switch careers later." Does that sound familiar? Do you have friends or relatives who have said that, and now they're stuck in a career they cannot stand, but can't get out of?

It happens a lot. People take a job because it's convenient, pays the bills, and gets them something to put on their resume. But then they get experience in that industry, which leads to a raise or promotion. They acquire more skills that are specific to that career path, excluding them from other industries.

As time goes on, the range of careers that are viable becomes smaller and smaller, until it finally dawns on them: They're in this for life. Sometimes you have to take a job you know you're not passionate about for a while. But set a deadline for yourself, focus on deciding what you really want to do, and get out before that temporary job turns into a lifetime profession. (See also: 6 Reasons It's Never Too Late for a Career Change)

6. Waiting for the "perfect" career

While you don't want to take a job for the wrong reasons, you also don't want to exclude yourself from good opportunities just because they're not quite perfect. There's a line in National Lampoon's Christmas Vacation about the chronically unemployed Cousin Eddie that always gets a laugh: "Catherine says he's been holding out for a management position."

It's obviously ridiculous, but for some people, it rings true. They do not want to jump into anything unless it is the absolute perfect fit for them. No compromise. No wiggle room. It either checks every single box, or it's not good enough.

This thinking can lead to disappointment and frustration, and at some point, you may pass on a great career because it isn't 100 percent "right." No career is. Those people earning millions a year on Wall Street have issues with their careers. Nothing is perfect. As long as there are way more positives than negatives, you're doing well.

7. Assuming you need a natural talent to enter a certain career

There are skills that people just seem to be born with: artists and designers, mathematicians, musicians, and so on. However, never forget the famous words of George McFly in Back to the Future: "If you put your mind to it, you can accomplish anything."

Do not close off certain fields because you don't know the first thing about them. Do they interest you? Does the idea of working in that profession make you feel excited? Well, find a way to make it happen. Take the classes. Put in the hard work. Give it everything you've got. Believe in yourself, and you will find that there is almost no career you cannot take on.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Never Do These 5 Things When You're in Debt

Dan Rafter — Fri, 22 Dec 2017 09:30:06 +0000

U.S. consumers have over $1 trillion in revolving debt as of October 2017, according to the Federal Reserve. This debt, made up mostly of credit card debt, is at its highest level since January 2009.

If you are struggling with a high credit card balance, know that you are far from alone, but you need to get it paid off. Sometimes, though, we make mistakes when trying to pay off our credit cards. These mistakes can make eliminating this high-interest debt more of a challenge.

These are the mistakes you should never make when paying off your cards.

1. Keep charging

This may sound obvious, but if you are trying to eliminate your credit card debt, don’t keep charging new purchases on your credit cards. Every new charge results in more dollars that you have to pay off. And at an interest rate that could be as high as 20 percent, even small purchases add up.

Instead, purchase items with your debit card or cash. If you need something expensive, save up and then buy it without resorting to credit cards. (See also: The Fastest Method to Eliminate Credit Card Debt)

2. Pay only the minimum

To avoid being late on your payments, you’ll have to make a minimum monthly payment set by your credit card provider. Paying this on time will keep your credit score in good standing. And you should, by all means, pay at least the minimum every month.

But paying only the minimum monthly payment is also a mistake when you have a high amount of credit card debt. If you only pay the minimum, it can take you years to pay off your balances. And you might pay thousands of dollars in interest. (See also: How to Pay Less Interest on Your Credit Card Debt)

Here’s an example: Say you have $6,000 of debt on a card with an interest rate of 17 percent. If the minimum monthly payment is 4 percent of that debt, and that's all you pay each month, it will take you more than 11 years to pay off that $6,000. You'll also pay more than $3,000 extra in interest.

That's also assuming you aren't making any new purchases with that card. The lesson here is simple: Always pay more than the minimum if you expect to ever pay off that debt. (See also: All the Ways Minimum Payments Are Evil)

3. Switch to other cards

Maybe your debt is sky-high on one credit card, but low on another. Don’t think that suddenly switching to your low-debt card will help. Switching from one card to another is just an illusion that you’re making a change. You’ll still be adding to your credit card debt. Your best move is to start paying for your purchases with cash or your debit card.

4. Skip making a household budget

Making a budget sounds like a chore, but it’s not that difficult. You’ll need one if you want to maximize the amount of money you’ll devote each month to paying off your debt.

Add up your monthly revenue and estimate your monthly expenses, including items that remain the same each month (such as your mortgage and car payments) and those that fluctuate (such as eating out or groceries). Once you total your expenses and revenue, you’ll know how much money you should have left over each month. You can then determine how much you can use for paying off your cards.

Armed with this information, you might skip a few restaurant meals each month. Maybe you’ll go out to the movies fewer times. Use the money you’ve saved to help pay down that credit card debt. (See also: Build a Better Budget in 5 Minutes Flat)

5. Put off saving

If you’re committed to paying off debt, you might be tempted to send as many dollars to eliminating it as possible. That’s good. Just be sure you don't neglect your savings in the process.

Yes, paying off debt with high interest should be your priority. But you also need to build your savings. What happens if your car suddenly needs an expensive repair? If you don’t have an emergency fund, you’ll have to use your credit card to cover those repairs. That will just add to your debt.

If you have savings built up, though, you can handle more surprises with cash. That will keep your credit card debt from rising even more as you’re trying to eliminate it. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Moves Every First Year Freelancer Should Make

Emily Guy Birken — Mon, 30 Oct 2017 08:30:14 +0000

When I started my freelance career seven years ago, I honestly had very little idea of what I was doing. I made some seriously painful mistakes that affected everything from my bottom line to my stress level to my relationships with some of my clients. (See also: The 5 Biggest Mistakes Freelancers Make)

But even though self-employment mistakes are common, they're not inevitable. You can make the transition to self-employment much smoother and easier to handle if you commit to doing the following things in your first year as your own boss. Not only will you lay down the good habits and policies you'll need throughout your new career in self-employment, but these moves can also help your career start off with a bang. (See also: Day Job or Freelance: Which Is Right for You?)

1. Set aside 30 to 35 percent of every paycheck for taxes

One of the double-edged swords of working for yourself is the fact that your paychecks will generally not have any taxes withheld. While it feels pretty good to have the full amount of money you earned coming directly to you, it can really mess up your finances if you don't plan ahead for taxes.

Many of the newly self-employed can get themselves into trouble by assuming they'll pay their quarterly estimated tax bills with whatever funds they have received as of the quarterly estimated tax due date. But Uncle Sam doesn't care if you have a slow work spell or are waiting on some payments that are not quickly forthcoming from a client — he wants you to pay the taxes you owe on time. (See also: Avoid IRS Penalties With This Simple Estimated Payment Strategy)

You can bypass the quarterly stress of finding the necessary funds to pay your tax bill by specifically setting aside 30 to 35 percent of every check you receive. This does take a depressingly large bite out of your paychecks, but it gives you the peace of mind to know that you will be able to cover your estimated tax payments. In addition, by putting this money into a savings account, you can earn a little interest — which already puts you financially ahead of folks who have their taxes withheld.

If your diligent savings of 30 to 35 percent of each paycheck means you have more money than you need for taxes in your first year of self-employment, then you can always use the leftover money to reinvest in your business or smooth over any lean months in your second year of self-employment. (See also: 7 Things I Learned About Money After I Went Freelance)

2. Hire an accountant

Speaking of taxes, they are going to get more complex now that you have begun working for yourself. While it is certainly possible for you to complete your taxes all by yourself as you've done in the past, the money you spend on an accountant for your self-employment taxes can both save you time and lower your stress. (See also: 5 Free Accounting Tools for Freelancers)

Asking for referrals from trusted colleagues or small business owners can be the best way to find the right accountant or tax professional for your needs. Don't let this important part of self-employment go on the back burner. Having an accountant throughout your first year of self-employment can help you to accurately pay your quarterly estimated taxes on time, and take advantage of deductions and other tax benefits that you might otherwise miss.

3. Determine your payment floor

During my first year as a freelancer, an educational company contracted me to write lesson plans for English teachers. I had been working as an English teacher before my freelancing career, and I loved that this company was committed to using humor in all of its resources. I thought it was a perfect fit, and I quoted them a price per lesson plan that felt reasonable for my expertise (and comedic chops). They offered me a fifth of what I asked for. Since I was worried that I wouldn't be able to actually make a living as a freelancer, I took the job.

It was a huge mistake.

Here's why: The amount of work that I put into each lesson plan meant I was earning less than minimum wage for my hours of toil. It took me months to get through the initial contract of 10 lesson plans, in part because I knew how little I was making and it was difficult to prioritize this client over those who paid more for less work.

Even though the company loved my work, we parted ways after I finished the first round of lesson plans. They were just as happy to get a quicker and less-funny turnaround from another freelancer who did not have my expertise. I was glad to no longer be working so hard for a company that did not financially value my contributions.

After this experience, I learned to figure out my payment floor — the least amount of money my time was worth. Once I knew my payment floor, it became much easier to recognize which jobs were worth my time, and which jobs would leave me feeling overworked and resentful. Knowing your payment floor may seem premature in your first year of self-employment since you feel like you are hustling just to capture enough clients to keep the lights on. But you are better off holding out for clients who value you, rather than taking any job, no matter how low the pay.

4. Build free time into your schedule

There are a couple of common scheduling traps that can trip up the newly self-employed:

Working all the time. Since you are now completely in control of your schedule and your career, and since you presumably love what you do, it can be very easy to throw yourself into your work 24/7.
The planning fallacy. Even after seven years as a freelancer, I still underestimate how long it will take me to complete a project, because it never occurs to me that my kids might get sick, my internet might go out, my research might uncover more complex issues than I anticipated, or that I might be struck down by an unexpected nap after eating too many carbs for lunch.
Lack of discipline. For some newly self-employed individuals, it can be difficult to stick to self-imposed (or even client-imposed) deadlines if you don't have a boss to keep you honest. It's a lot harder to succeed in self-employment if you have trouble sticking to a work schedule.

All three of these scheduling mistakes can be helped by building free time into your schedule. Forcing yourself to take time off from your otherwise nonstop work will prevent burnout and allow you to be far more productive. Having a free afternoon built into each week has helped me to improve my on-time percentage, because it leaves some slack for when life happens and I'm not able to finish things according to my pie-in-the-sky planning assumptions. And anyone who struggles with self-discipline will generally have an easier time forcing themselves to work if they know that there is free time coming. (See also: Self-Employed? Tips for Taking Time Off Without Trauma)

5. Capture excess income in a savings account

When you are self-employed, there will be some months when several paychecks or client payments come in all at once. This can feel pretty great, especially if you can thank your own hustle for making it rain, but it's important to be disciplined about this kind of excess income and put it in a savings account. That's because you are likely to have a low-income month sooner or later, and that excess income can be the difference between you being able to pay your bills as usual and you having to go grocery shopping with couch cushion change. (See also: The SEP-IRA Is How the Self-Employed Do Retirement Like a BOSS)

During your fat-paycheck months, you should not only set aside the 30 to 35 percent you put away for your taxes, but you should also put whatever additional excess income you can afford into a "rainy day" savings account. This account is where you will go to get the money you need to keep everything running smoothly during any lean months. And like your taxes savings account, if you don't end up needing to dip into this rainy day savings account, that means you will have money already set aside that you can potentially invest back into your business. (See also: How to Budget Consistently Without a Steady Paycheck)

6. Insist on clear contracts

Everyone who has ventured into self-employment has at least one story about being stiffed out of payment from a client. For instance, in my first year of freelancing, I was hired to write for a startup parenting website. I wrote several articles for the site, but I was only paid for one of the half dozen pieces I provided them. (See also: 8 Ways Freelancers Can Make Sure They Get Paid on Time)

The client was in the wrong for not paying me — but I also made a mistake in accepting work from them without a contract. Our arrangement was based on nothing more than email exchanges and a phone call. We did not have a contract that spelled out our legal expectations of each other, which meant it would have been very difficult for me to pursue the client for the money they owed me.

In addition, contracts are also helpful for defining the scope of a project and specifying the details of a termination fee. A contract that outlines the specific timeline and deliverables will protect you from having to revisit the same project over and over again for no extra money if your client insists on more edits or revisions or a larger scope than you expected. Similarly, if your client decides to end your project, having a contract that specifies the termination fee you'll receive under such circumstances will protect you from having wasted your time.

Welcome to self-employment!

You can set yourself up for se lf-employment success in your very first year as your own boss. Planning ahead for everything from taxes to lean months to time management to contractual disputes will help you create a self-employment career that you'll love for years to come. (See also: Freelancing: A Beginner's Guide to Doing It Right)

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Career Moves That Prove You're Finally a Grown-Up

Paul Michael — Fri, 20 Oct 2017 08:00:06 +0000

Your career takes up a huge chunk of your life, and over the years, you will mature in many aspects of it. However, some of us will reach different levels of maturity at different stages of our careers.

Being a grown-up at work is all about attitude and decision-making rather than age and experience. You don't have to wait until you're older to try any of these mature career moves.

1. Asking for a raise or promotion

There are several ways to get a raise or promotion. The first is that you put in the hard work, the boss notices, and you get rewarded. The second is that you are offered a higher paying job somewhere else, and you ask the company to match it. The third is that you sit around hoping you'll get one, and maybe you'll get lucky. And the fourth is to just go and ask for one.

By far the most surefire way to get what you want is to ask for it. If it's been awhile since your last pay bump, you know you're not getting the money you deserve, or you did something outstanding, then collect the evidence, book a time, and make your case to your boss. More often than not, you will get a good result. It also makes you look more confident and professional. (See also: You Should Always Negotiate a Raise: Here Are 10 Reasons Why)

2. Having a career, not just a job

A job is a task that someone is paid for. A career is an occupation with opportunities for advancement. Which one are you currently in?

Some people might say working behind the counter at McDonald's is just a job, but that's not necessarily true. If that person wants to one day run their own franchise, that's a career. On the flip side, you could be sitting in an office wearing a suit and tie and going nowhere fast.

It's all about motivation, resolve, and looking to the future. If you can honestly say that you are focused on that right now, that's a great sign of maturity. If you're coasting and collecting a paycheck without thinking about where you'll be in five years, you may need to reevaluate. Soon. (See also: Don't Let These 6 Common Job Traps Derail Your Career)

3. Making peace with coworkers you dislike

Every workplace has them: It's the guy who points out every mistake you make, but never notices the good stuff. It's the woman who complains every time you raise your voice above a whisper. It's the boss who has office favorites, and you're not one of them. The people we work with are capable of making our work lives miserable. But once you realize that only you have the power to make yourself feel bad, it can be life-altering.

Let the stupidity of their actions roll off your back. Don't contribute to their negative energy. Make an effort to find the nice part of their personality. At the end of the day, you'll be the bigger person and you'll feel better for it. (See also: 12 Ways You're Driving Your Co-workers Insane)

4. Taking genuine responsibility for mistakes

It's not easy to admit to a mistake, especially in a corporate environment. Finger pointing is rife, and assigning blame to other people is commonplace. But as Bruce Lee so famously said, "Mistakes are always forgivable, if one has the courage to admit them." The key word here is courage. It takes real maturity to step up and say something like, "That's my fault, I should have been more prepared." Is it something that could get you in trouble? Possibly. But the other option is hiding from the truth or blaming others, and that's not very mature.

5. Chasing real growth, not accolades

Accolades may come in the form of trophies or awards, or they may be a pay raise or promotion. And while they are certainly nice to have, if they are your only source of motivation, you're missing out on the inner growth necessary to become a better employee. Work is most enjoyable when it's fulfilling, and if you're stuck in a cycle of chasing praise and rewards, it can start to feel very empty. Put those carrots to the side and focus instead on becoming your best self. Then, you'll have really stepped into the grown-up world.

6. No longer engaging in water cooler gossip

Let's keep this one short and sweet, because it's obvious: If you're hanging around the breakroom or water cooler engaging in all kinds of gossip, you're not even close to being a grown-up. Leave that to the kids and concentrate on doing a better job. (See also: 9 Office Politics Goofs That Can Set Your Career Back Years)

7. Asking for help

As much as it takes guts to admit a mistake, it also takes courage to admit you cannot do something that was asked of you. If you play pretend, or spend sleepless nights wondering how on earth you are going to get something done, you're not being very grown-up about the problem.

A sign of real maturity is to look around and see who is actually ideal for this task. You have your own set of skills, other people have theirs. Find someone who can do this job well and ask for help. Or, ask to trade projects if it's feasible. It will be better for everyone. And remember, one day someone will come to you, nervous and unsure, asking for the same kind of help.

8. Offering to help coworkers

Whether you're in an office or working on a factory floor, there are jobs that need doing. And these jobs are usually assigned to specific people. After you've spent a few years in your career, especially in corporate America, it's easy to have a "head down, do my own job, stay out of other people's problems" mentality.

If you can get over all of that and help people out whenever you have the time, it shows real maturity. Sure, the other person may take credit, or may have gotten themselves into the mess they're in. But by being the bigger person, you will shine as a great employee. (See also: 12 Ways to Improve Your Performance at Work)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Common Mistakes You're Making With Your Checking Account

Mikey Rox — Tue, 17 Oct 2017 09:00:06 +0000

Most of us think about our checking account in only one way: Is there enough money in it? While that's certainly the most important piece of the puzzle, there are plenty of other things to consider to ensure that you're getting all the bangs for your bucks. Beware of these common, costly mistakes you might be making with your checking account.

1. Maintaining a lower balance than you need to cover your expenses

Your top concern regarding your checking account should always be that you have enough money in there to cover your expenses — even more so if you subscribe to direct deposit and/or autopay services. By engaging in the latter, you're essentially putting machines in charge of your finances, which, while convenient, are not always accurate. If you don't have enough money to cover your bills, you know what happens — you dip into the negative and you're slapped with insufficient funds or overdraft charges, further dragging you into the red. This oversight also can affect your credit score if you miss the payment for 30 days or more. (See also: The Pros and Cons of Autopay)

The best you can do for yourself is to commit to keeping your bills covered by your checking account and staying on top of your auto-deposit payments to maintain a positive and accurate balance.

2. Keeping more money than you need in your checking account

Keeping enough money in your checking account to cover your expenses should be your main focus, but you also may be doing yourself a disservice by keeping too much money in that account. It's a balancing act, for sure — but if your surplus can benefit you someplace other than your checking account, you need to move it.

Says Michael Banks, founder of personal finance blog The Fortunate Investor, "Money that sits in a checking account accumulates very little in interest. [Some banks], however, offer investor checking accounts that allow you to invest your checking account funds to maximize growth. You don't need to invest all of your money, and it's easy to keep two accounts and transfer as much into your investing account as you feel comfortable with; but the more you invest the more you stand to gain in the long run."

If the idea of an "investment" account gives you anxiety, then consider opening a Roth IRA or at least finding a high-yield savings account instead.

3. Limiting your access to in-network ATMs

When I first moved to Manhattan, there were only a handful of my bank's in-network ATMs on the entire island, none of which were near my apartment. I was never close enough to one when I needed cash, so the fees added up quickly (some out-of-network ATMs charged up to $5 per transaction). This went on for a few months before I wised up, did my research on the most abundant ATM locations in New York City, and switched banks. If you're banking someplace and the ATM locations are prohibitive to you, consider banking elsewhere; you could save a bundle in time and fees. (See also: 8 Ways to Make Sure You Never Pay an ATM Fee)

4. Paying fees just to have a checking account at a particular institution

Some banks charge a monthly checking account fee if you don't keep a minimum balance in it — say $1,500, for example. If you don't like keeping excess funds in your checking account, it does not make sense to pay a premium to bank with an institution that charges you for moving money around. Another option you have is opening a free checking account at a credit union.

According to a 2016 Bankrate survey, 76 percent of credit unions offer free checking accounts. This is good news in a time when free checking at banks continues to decline almost every year. The survey also noted that an additional 22 percent of credit unions are willing to waive their monthly fee for meeting certain requirements such as signing up for direct deposit or paperless statements. (See also: Are You Paying These 6 Unfair Banking Fees?)

5. Spending without checking your balance

Do you know exactly how much money is in your checking account right now? What about a close estimate? If the answer is no, you're not staying on top of your money well enough — and you definitely shouldn't be pulling out your debit card when your balance is in flux. Before you make a purchase that you even think could compromise your balance, log into your account (easy to do with your mobile app; I log into mine with a fingerprint), and manage your money wisely.

6. Ignoring your transaction history

You need to stay on top of what payments are being deducted from your checking account, even if they haven't actually been deducted yet. Continuing to spend when payments are pending could spell disaster.

"Check your account every couple of days to ensure transactions have been posted," advises Natasha Rachel Smith, personal finance expert at TopCashback. "Be aware of holds on your account as a result of a retailer or merchant requesting authorization of a purchase. For example, gas stations and hotels could put a hold on your account until the actual transaction clears, so be mindful of these transactions when viewing your available funds. I also recommend checking on your transactions for fraudulent charges and reporting them as soon as possible."

7. Not subscribing to overdraft protection

Banks typically charge a $35 overdraft fee, and it's important to keep that in mind when you know your checking account is getting low. You also should fortify your account with overdraft protection if it makes sense for you. (See also: 9 Ways to Avoid Overdraft Charges)

"Although opting out of overdraft protection can be ideal to not get hit with overdraft fees on debit card purchases, your bank can still charge you non-sufficient funds fee for checks and bill payments that can be comparable to an overdraft fee," Smith explains. "It is ideal to opt out of overdraft protection when you have a savings account with the same bank. Typically, if you have both, the overdraft fee is less. If you choose to opt in to overdraft protection, always be cautious so you avoid the charge."

8. Assuming that every debit charge is legit

Once a week I go through my checking accounts to make sure all the debit charges are legit. There have been a few occasions where I've noticed an error — a fraudulent charge, a subscription I canceled, an incorrect amount charged for an expense that I authorized, or a price hike in my existing memberships. If I didn't do my due diligence and address these errors, nobody else would have. Check in on your money to make sure the numbers are correct.

9. Linking to online retailers you know nothing about

It's becoming more and more common — especially around the holidays — for shoppers' financial information to be compromised by a security breach. I'm not going to tell you to stop shopping online altogether, because that's just impractical, but I will urge you to be more responsible in where you spend your money and save your banking information.

First, make sure the website is secure. The "https://" distinction designates a secure site, opposed to the more common "http://" protocol identifier for sites that don't require any user information.

Second, use common sense. While it's not impossible for well-known retailers with an arsenal of security resources to get hacked, it's much more likely to happen to the small-potatoes shops that can't afford top notch security. Of course, these smaller retailers don't have as much to offer hackers in the way of identity theft. But in any case, use your best judgment when providing your financial info online to prevent being a victim. (See also: 5 Dangers of Mobile Banking — And How to Avoid Them)

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Read a Credit Report

Damian Davila — Thu, 11 May 2017 08:00:09 +0000

Building and maintaining your credit history takes time and dedication. While there are many things you can do when shooting for that perfect 850 FICO score, checking your free credit report every year from AnnualCreditReport.com is among the best personal finance habits. Once you have a copy of your credit report, let's review step-by-step what to look for.

1. Check your personal information

First things first: Make sure that your credit report correctly shows your name, Social Security Number (SSN), phone number, and address. The three credit bureaus (Equifax, Experian, and TransUnion) keep track of all variations of names and SSNs reported as belonging to you.

You can easily rectify a small error, such as a misspelling, absence of a hyphen in a last name, or transposition of a street number by contacting the credit bureau and providing supporting documentation. Keep an eye out for information that you don't recognize at all — this may be a sign of identity theft. (See also: Don't Panic: Do This If Your Identity Gets Stolen)

2. Verify it's really you

Even after checking that your full name and address are correct, you may recognize some accounts on your report that belong to somebody else in your household. In this case, you may be a victim of a mixed file — when the credit information of two individuals sharing the same name gets mixed up in a single report.

This can be a potential issue in multigenerational homes with several family members sharing the exact name. For example, John Smith Jr. opens a store card but the credit bureaus list the account on the father's report (John Smith Sr.) instead of the son's. That would be a mixed file.

3. Watch out for errors in account ownership

Going back to the example of the father and son, the father may have decided to open the store card in his name, and then add his son as an authorized user, or vice versa. Make sure that reported accounts are only the ones for which you are the owner.

4. Look out for accounts incorrectly reported as late or delinquent

Unless you were more than 30 days past due, you shouldn't have a late or delinquent note on any debt. So, report this right away. (See also: How to Clear Old Debt From Your Credit Report)

If you recently made a payment and your account is now current, keep in mind that there is often a lag when credit bureaus report such incidents. Follow up with the company owning your debt and verify that it has notified the credit bureaus. Keeping your accounts current is critical, because payment history makes up 35 percent of your FICO credit score.

5. Validate key account dates

The most important date to verify is the date that an account was opened, because the length of your credit history accounts for 15 percent of your FICO credit score. Other important dates to verify are date of last payment, and date of first delinquency.

6. Beware accounts listed twice

It can happen! Possible sources of this error are when you upgrade a credit card with the same company, or refinance a loan with the same financial institution. Another possibility is that somebody opened an account on your behalf without your consent.

You also need to watch out for companies transferring the ownership of a delinquent account over to collections agencies. While you're still responsible for paying back what you owe, you're definitely not liable to receive a double (or triple!) whammy on your credit score for the same mistake.

7. Double check credit limits and balances

Double check that your account balances are within a range you recognize, and that your credit card limits are up to date. After all, 30 percent of your FICO score is based on your credit utilization ratio — your total credit card balances divided by your total credit card limits. For example, an outstanding balance of $4,000 with total credit limit of $15,000 would put your credit utilization ratio at 26 percent. The more available credit you have, the lower your credit utilization ratio will be. Most experts recommend this ratio should not exceed 30 percent.

8. Keep an eye on public records

A bankruptcy isn't the only reason you might end up with a public record on your account. Unpaid driving violations, library fines, or other penalties from money owed to the government will come to haunt you on your credit report. Depending on many factors, public records can stay on your report for up to seven years, even after taking care of them. This means that the best time to take care of them is now. (See also: 4 Credit Report Mistakes That Could Be Costing You Big)

9. Corroborate that corrected information has been posted

Chances are at some point, you'll eventually have to report an error. When this happens, always follow up to check that the incorrect information has been replaced and corrected.

What to do if you find an error

If you find any errors in your credit report, refer to the instructions on your credit report to dispute inaccurate or missing data. Here is a useful template from the Consumer Financial Protection Bureau to initiate disputes with the credit bureaus by mail or fax. Or, you can file a dispute online with Equifax, Experian, or TransUnion.

This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Expensive Mistakes of the Newly Retired

Mikey Rox — Wed, 10 May 2017 09:00:07 +0000

Transitioning to retired life on a fixed income will undoubtedly have a few bumps in the road. This is a brand-new chapter of life for you, and it's reasonable to expect some challenges ahead. The last thing you want to do, however, is compromise your nest egg with costly, easily avoidable mistakes. After all, you need that money to get you through the rest of your life.

As such, consider these costly mistakes of the newly retired so you don't follow suit.

1. Not balancing your portfolio

Retiring doesn't mean you have to stop investing. You can still dabble in the stock market, but perhaps not as aggressively as you once did. Risky bets could cost you your life savings, which means that you'll either have to go back to work past age 65, or put your hat out on a street corner. Neither of those options sound great in the golden years of life, so it's important to ensure your retirement portfolio is balanced.

"Annuitizing a significant portion of one's retirement income can complement a portfolio of stocks and bonds," says Jim Poolman, executive director of the Indexed Annuity Leadership Council. "Fixed indexed annuities (FIAs) can serve as part of a balanced financial plan because they do not directly participate in any stock or equity investments and [they] protect your principal from fluctuations in the market."

2. Not changing your lifestyle after retirement

Your spending habits as a retiree will need to change if you're going to make it for the long haul. This is especially true if you're not receiving any kind of monthly payments, like Social Security or disability, to help with bills. You can live off what you have in the bank (hopefully; otherwise you shouldn't be retiring yet), but you may have to downsize and rethink your spending strategy.

This means you need to start learning how to save money on everyday expenses, and re-evaluate your budget to find places for cuts. Don't expect yourself to suddenly drop 30 percent or more of your spending. Work your way to it by making small cuts at a time before you retire.

3. Not evaluating risk

When you start saving for retirement, you may have a certain monetary goal in mind — either based on what financial sources have told you, or what you've calculated you'll need based on your lifestyle. But you may not be accounting for the ups and downs of Wall Street and inevitable inflation.

"Revisit your retirement plan to make sure your savings reflect your new needs, and adjust for market conditions," Poolman advises.

4. Spending too much money too soon

When you retire, what you have is what you have. Unless you still have income coming in somehow, you have to mind your money and avoid the temptation to spend it on splurges, especially if you find yourself bored in the first year of your forever vacation.

"Before finalizing your retirement, you must take into consideration that you will only be living on a fixed amount of money," Andrew Fiebert, co-founder of Listen Money Matters, says. "Oftentimes the amount of retirement savings looks pretty large, but retirees must keep in mind that money will have to last a very long time — hopefully a very, very long time."

The enticement to spend your money can be almost irresistible, but discipline is vital. Depleting your money beyond the interest that it earns will hurt the principal and leave you with nothing after just a few years.

5. Loaning money to adult children

I get it — you love your kids. But at what cost?

According to a 2015 Pew Research Center poll, a whopping 61 percent of parents in the U.S. admitted to helping their adult children financially. That may be well and good if you have that kind of disposable income lying around (though it only fortifies your children's reliance on you; learn to say NO!). However, if you already need to cut back because you didn't save enough to live an easy, breezy retirement — which applies to most Americans — providing handouts, the payback of which you may never see, could put you in a financial pickle.

Don't be afraid to cut your grown children off. If you don't have the extra money, neither do they.

6. Taking Social Security benefits too early

The overriding argument against claiming Social Security benefits too early is that you won't receive your full benefit potential. That could come back to bite you later in life.

If you decide to claim Social Security benefits before you reach your full retirement age, you'll receive a smaller monthly payout — up to 30 percent less. If you absolutely need that money before your benefits fully mature, then by all means do what you have to do to survive. You'll be better off, however, the longer you wait.

7. Not taking required minimum distributions after age 70-½

Starting at age 70-½, you must take required minimum distributions (RMDs) from your traditional, SEP, or SIMPLE IRA each year to satisfy rules set forth by the IRS. If you don't, you'll pay penalties.

You can calculate your required RMD by dividing your IRA account balance as of Dec. 31 of the prior year by the applicable distribution or life expectancy. Qualified charitable distributions can satisfy your RMD, by the way, which you would report on Form 1099-R on the calendar year in which the distribution is made. Do good and save yourself the penalties while you're at it.

8. Falling victim to money scams

Scammers love retirees and the elderly. Why? Because they've usually got money to burn, and they're much easier to fool than the average working-age person. Sad, but true.

There are plenty of scams out there, too, and they're getting more intricate all the time — like one where the scammer poses as the victim's grandchild and begs the grandparent to send money. To prevent yourself from being scammed, remember these two major rules: Never provide personal information over the phone or via email, and never wire any money unless you've spoken directly to your family member or friend who is requesting the transfer. (See also: What to Do When You Suspect a Scam)

9. Failing to account for the unexpected

The reality of retirement is that while you'll certainly have more time to kick back and relax, life isn't necessarily going to get easier — and you have to prepare for that. Everyone will die eventually, and it's smart to plan ahead not only for end-of-life accommodations, but also long-term medical care.

You may live a long and healthy life, but eventually you'll need someone to care for you — whether that's in a family member's home or a professional facility — and that will cost money. Hedge your bets by looking ahead and putting those funds aside now. (See also: Is Long Term Care Insurance Worth It?)

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Things You Should Never Include in Your Cover Letter

Sarah Winfrey — Tue, 18 Apr 2017 08:30:11 +0000

Writing the perfect cover letter is a job skill unto itself. In just a few paragraphs, you need to capture the reader's attention and expertly sell your skills and experience, all while striking the right professional tone.

It's tempting to slap something together and tell yourself that your resume is more important. Truth be told, though, your cover letter is a key part of the package. Avoiding these seven cover letter gaffes will get you through the interview door faster.

1. Wrong information

Make sure that you have all the details right. Double check that you have the correct company name and spelling, the correct job title, the right address, and, where necessary, the correct name of the hiring manager.

If you don't have the name of the hiring manager, you can often find it by calling the company's human resources department. Let HR know which position you're applying for and ask, "To whom should I address my cover letter?" They won't always tell you, but sometimes they will.

Also double check your own personal information, including your name, address, email, and phone number. It may sound like common sense, but you'd be surprised how often these tiny typos cost people a job opportunity. (See also: Almost Half of Job Applicants Make This Same Foolish Mistake)

2. Poor writing

Use complete sentences. Spell words correctly. Check (and have someone else check) your grammar and punctuation. You want this letter to be the best possible reflection of who you are and how you work, and making silly mistakes won't put your best self forward.

3. What you're lacking

Don't mention any skills or qualifications that you don't have. The cover letter is not the place to bring up any shortcomings.

Instead, use this as an opportunity to sell yourself. Tell the potential employer why your skills and experiences are a perfect fit for the position. Remember, your cover letter isn't actually about you. It's about the company you'd like to work for and why you would be a good fit for them. Wow them with what you're offering, and maybe they won't even notice the experience you don't have.

4. Generic, cliché language

Show that you care and that you spent time on your cover letter by eliminating any generic, cliché phrases that could be part of any cover letter, for any job. Don't say that you're a "team player" with "leadership experience" who is also a "hard worker." Nothing about that is unique, and it'll do nothing to differentiate you from other applicants.

Instead, fill your letter with facts that demonstrate your unique skills. Emphasize results whenever possible. Talk about how you led a diverse team to solve a particular problem, or increased revenue by X percent. Then, explain how you would bring those skills to your new job.

5. Lies

Most people who lie on a cover letter don't do so intentionally. They panic — maybe feel inadequate — and then they either make something up or, more often, stretch the truth so it looks like they have more experience or qualifications than they actually do.

The problem is, these things are easy to check, and besides — why would you want a job requiring skills you don't actually have? Instead, focus on qualifications you do have. If you feel tempted to stretch the truth often, maybe you need to look at different jobs or take some online courses so you actually have the skills you need for the work you want to do.

6. Personal information

This is not the time to talk about your dog, or your divorce, or about how you need this job because you have to support your three kids all on your own. Yes, those are important things to you, but they don't belong in your cover letter.

Like I mentioned above, the cover letter isn't actually about you. It's about the company where you're applying, and how you can make it better. Even if your need for work is desperate, or if there are some personal things you think the company should know about you before they make a decision, the cover letter isn't the place to list them. Wait for an interview.

7. Long paragraphs

No one wants to read a wall of text, especially when they are scanning cover letters for keywords. So, keep your paragraphs short and limit your letter to a single page.

This means that you have to be pithy in what you say. Straightforward is usually best. Describe your experience and qualifications, highlight how they satisfy key requirements of the job you're applying for, and then wrap it up. More words aren't necessarily better.

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This article is from Sarah Winfrey of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What to Do When Your Tax Preparer Makes a Mistake

Dan Rafter — Thu, 13 Apr 2017 08:00:10 +0000

You might think that hiring a tax preparer to file your income taxes will guarantee a mistake-free return. Unfortunately, you'd be wrong.

In 2015, the National Consumer Law Center used mystery shoppers to test the work of 29 tax preparers. The results were surprising: Only two of the returns compiled by these preparers came in error-free. That's bad news for a lot of people. USA Today reported in February that almost 79 million e-filed tax returns were completed last year by professional tax preparers.

And here's even more bad news: The IRS says that if your tax preparer makes a mistake resulting in you having to pay additional taxes, interest, or penalties, you are responsible for paying these fees — not your tax preparer.

If your tax preparer does make a mistake on your return, what can you do? Here are five suggestions.

1. Contact your preparer

If the IRS sends you a letter claiming that there are mistakes on your taxes, call your tax preparer for an explanation. Tax preparers who do make mistakes might offer to pay any fees, penalties, or interest charges for you. This might not restore your confidence in their abilities, but it will help save your budget.

2. Pay the penalties

If the IRS is charging you a penalty for a tax mistake, even if that mistake was made by your preparer, pay it. You might be battling it out with your tax preparer in the hope of getting this professional to pay the penalty on your behalf, but the IRS doesn't care. If it doesn't receive its payment, you are the one who will face additional financial penalties.

If your tax preparer refuses to pay for its mistake, send a check to the IRS. Then continue your fight against the preparer.

3. Know your rights

Check any contract you signed with your tax preparer. There might be language in the contract stating what your tax preparer will do in the event of a mistake. Some tax preparers will pay the interest and penalties that result from a mistake, but not any extra taxes you might owe.

Some tax preparation firms, especially the big ones, might offer insurance that you can purchase for an extra fee. If you've bought this insurance, your tax preparer might be obligated to pay any interest, fees, or extra taxes you owe because of their mistakes.

Be aware that tax preparers won't pay any penalties on your behalf, even if you've purchased extra insurance, if the mistakes they've made are because you provided them with inaccurate information.

4. Check the statute of limitations

If your tax preparer made a mistake that caused you to overpay on your taxes, you have three years to request a refund from the IRS. You must provide documentation to back up your claim that you overpaid.

This statute of limitations works in reverse, too. If you underpaid your taxes because of a preparer mistake, the IRS has three years in which they can come after you for the money you owe. If your tax preparer made a substantial error, however (such as omitting 25 percent or more of your gross income), the IRS can go back up to six years. It's recommended to keep your records for at least this long. Be aware there is no statute of limitations for those who knowingly file fraudulent returns, evade taxes, or fail to file altogether.

5. File a complaint

If you discover that your preparer made an intentional mistake, perhaps to boost your return, make an official complaint with the Office of Responsibility at the IRS. If your preparer is a member of the American Institute of Certified Public Accountants, National Association of Enrolled Agents, or a state law association, you can also file a complaint with these organizations. Such complaints could cause tax preparers to face fines or lose their licenses.

Reduce the odds of a mistake by hiring the right professional

Sometimes you can prevent a future mistake by hiring the right tax professional upfront. The truth is, anyone can work as a tax preparer. Preparers must apply for a Preparer Tax Identification Number from the IRS. But getting this number is easy: It costs $50, and the IRS says that applying takes just 15 minutes.

If you're searching for a tax professional, it's best to work with either a certified public accountant with experience completing tax returns, or what is known as an Enrolled Agent. To become an Enrolled Agent, tax preparers must first pass a three-part test given by the IRS that covers the ins and outs of individual and business tax returns. Some certified public accountants will also be Enrolled Agents.

Ask any tax preparer for the phone numbers of past clients. Then call these clients to ask about the work the tax preparer turned in. The IRS also recommends that consumers only work with tax preparers who charge a flat fee. Preparers who charge a percentage of your tax refund might be tempted to fudge the numbers to boost your return.

Finally, make sure that you provide all the proper documents and numbers. The tax preparer may or may not double check your numbers. Maybe you forgot about the antique you sold on eBay. Maybe you transposed a number when adding up your home office deductions. You can't depend on the tax preparer to notice that something is off or verify your numbers. The best professionals will ask you a lot of questions to ensure you've provided all the information. But others may just take your documents and enter the numbers.

The bottom line is if the IRS audits you and discovers that the preparer made mistakes — intentional or accidental — you'll have to pay any penalties and fees.

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

15 Rookie Mistakes New Bosses Make

Paul Michael — Mon, 27 Mar 2017 09:30:34 +0000

Sooner or later in your career (and most likely later, for obvious reasons), you're going to become the boss. Whether it's through a promotion, or a new hire, you will suddenly be in the top spot. Now, the buck really does stop with you. And while it's fantastic to have those new powers and responsibilities, it can also be very difficult to adapt to the new role. Here are 15 rookie mistakes you should avoid when you become the big cheese.

1. Playing favorites with friends

You may be promoted into a leadership role, or hired from the outside, but one thing is certain; either you'll already have friends around you, or you'll make new friends quickly. In either case, be careful with these friendships. It's difficult, and sometimes almost impossible, to separate a great friendship from a working relationship.

If a good friend does something at work that is bad for the company, you have to come down just as hard on that person as any other employee. If they don't deserve a promotion, don't give them one. And remember, friendships will be scrutinized. So if the colleague you play golf with every weekend genuinely deserves that raise or promotion, you better make sure you have everything documented.

2. Trying too hard to be liked

New bosses are sometimes like puppies: They run around the office, happy all the time, desperately trying to get a smile out of everyone. It's not going to work. In fact, it will most likely become annoying after a while, and if you keep going, downright disruptive.

You do not have to be liked, or loved, by your staff. If you do the job well, and treat them as valuable employees, that will come naturally without buying breakfast every morning and telling jokes at the water cooler. Let your skills speak for themselves. You are not there to win a popularity contest.

3. Trying too hard to be feared or respected

On the other side of the coin is desperately trying to be feared or respected. Now, trying to be feared is just not a good idea. Sure, some people love the thought of being the most terrifying person at the board meeting, but does that make that person a good boss?

Respect, on the other hand, is something every good boss should get from the staff. However, it cannot be taken. It has to be earned. Your deeds, decisions, and performance will dictate the kind of respect you get. No one is going to just give you great respect out of the gate (unless they are looking for a quick promotion).

4. Changing everything — even things that work

In sports, when a new manager joins the team, a lot of changes are made. Often, these are unnecessary changes, including axing players who are great simply because they are part of the old regime. The same can happen in a business environment.

As a new boss, you have to look at what is working, and what isn't. There will be systems in place that have taken years to perfect. If they aren't working, fix them. If they are, concentrate on something else. The same goes for people. Know who the bad apples are — don't throw the good ones out as well.

5. Making impossible promises

Presidential candidates who get elected fall afoul of this one all the time. "Elect me, and I'll do X, Y, and Z." Then they get the job and find out there's a lot more involved than they ever considered. The same goes when you become the new boss.

Do not make promises that are impossible to keep. You may think you really can fix the unfixable, or from an outsider's perspective, the very easily fixable — but sometimes there are forces at play that you cannot beat. Get the lay of the land first. Ask around. Find out what the employees want fixed, and then dig into the systems that can make it happen. Then, and only then, can you make promises you have a good chance of keeping. Doing it blindly in your first week will not bode well. You'll be the boss who couldn't get things done.

6. Taking on way too much

Take on too much, too soon, and you could jeopardize the position you just landed. It's better to take on a few tasks and do them well than to say yes to everything and do a mediocre job. What's worse, the employees will think you don't trust them to do the jobs they have been doing for years if you start interfering in their work. So, analyze the tasks available to you, and delegate the jobs you don't need to be involved with. You'll have a lot less stress, and the staff will trust you more.

7. Focusing on short term benefits

In this case, benefits are not health, vision, and dental. Rather, these are immediate benefits to the company and staff. Perhaps you see a few easy fixes, and get them done. However, you may well be throwing duct tape on a much bigger problem. In the short term, yes, people are happy. But if you have simply kicked the can down the road, you will have to pick that up at some point. And by then, the problems will have only grown larger.

Look at the bigger picture. Yes, it may be easy to fix the poor cafeteria choices, or unsightly wallpaper in the break room, but you may be using money that could help a bigger problem; one that will have a much greater impact when it's solved.

8. Refusing to ask for help

You are the boss. You are in charge. But you're not infallible. You don't know everything. And let's be honest, if this is your first week on the job, how could you?

Many managers consider it a sign of weakness to ask for help, but that couldn't be further from the truth. Ask for help when you need it, providing it's something you shouldn't already know (you don't want to ask how to use a spreadsheet if you've just been taken on as head of accounting). If you don't know where a department is, ask for directions. If you don't know how a particular system or process works, call a meeting with the people who do. Then, bring your expertise to the table.

9. Firing and hiring the wrong people

It happens all too often, and it's a blight on corporate culture. A new manager is brought in, and immediately they begin firing people that rub them the wrong way, and hiring people they worked with at other firms. While it's fine to bring in people you know can do the job well, give people a chance to show you what they can do. It should take months to really figure out who is a good employee, and who is treading water. Some people may be excellent, but in the wrong department. Others may have been given inadequate training, or have been buried with enough work for three people. Scope things out before pulling out the pink slips.

10. Micromanaging every single operation

One of the biggest bottlenecks that a manager can create is to insert him or herself into every single transaction. A boss is not supposed to get into the weeds in that way. Rather, a boss sees things from a much greater height, and lets trusted employees get their hands dirty on smaller operations. If you insist on seeing every part of every process, and ask to be CC'd on every email, you will create tremendous animosity. And you'll slow everything to a crawl.

11. Being the center of attention

As far as you're concerned, you did it. You got the job. You got the big promotion. You are the star of your show, your family is proud, and your friends are buying drinks at the bar. Enjoy it, but leave that at the office door. You do not want to have meetings telling everyone all about you, your likes, dislikes, favorite TV shows, preferred color of socks, and all the industry awards you've won. Think of this as a date. You want to spend the first few weeks being insanely interested in your staff. They are your first priority. You want to be fascinated by their issues, and their hopes and dreams. This is not your show.

12. Fearing failure

Failure is essential in every business. You cannot learn how to do something right until you've done it wrong — usually, several times. But managers who are new to the company or the role fear failure. They believe that mistakes are weaknesses, and that can quickly lead to dismissal. Don't fall into that trap.

You have to reach for the stars, and to do so, you must risk falling flat on your face in the dirt. However, you will succeed far more often than you fail, you'll gain the respect of your staff, and you will make great strides for the company.

13. Stalling on big decisions

Your staff knows the big problems that you're facing. They probably know them so well, they're just waiting for you to fix them. But don't lead them on. If you know that someone has to be fired because they are awful at their job, don't stall for months because it's hard to do. If you need to upgrade the equipment, but know it will cost a fortune, address it head on. Let people know you're working on it. By making excuses and stalling, you will lose the respect of your employees, and will become known as all talk, and no action.

14. Ignoring small issues that can make a big difference

You know what they say about a stitch in time. It is just as applicable in the workplace. When you find out about small problems or issues, deal with them. For instance, you may discover that there is animosity between two members of staff. If you ignore it, it grows into a much bigger problem. Perhaps one that can only be solved by letting one of them go. But, by addressing it early, and clearing the air, you can stop that small issue from becoming a big one. Whether it's a system or process, personnel, equipment, or anything else related to the day-to-day operations, don't ignore those small problems. Before you know it, they're enormous.

15. Not getting up to speed on personal issues

A new boss is not expected to know everything about every employee in the first week. But, a quick one-on-one with the team to find out any personal situations that are relevant to the job is essential. For instance, one employee appears to be off his game. He's not attentive in meetings. He's withdrawn from the rest of the office. It seems as if he's just not a good performer. But as it turns out, this is a great employee who just suffered a tragic loss in the family. This is an immediate paradigm shift. Now, this behavior is not only understandable, it's something you can help with. Make it a priority to know your staff, and their problems and concerns, within the first few weeks.

This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Stop Making These 7 Basic Budget Mistakes

Kentin Waits — Fri, 03 Mar 2017 10:00:09 +0000

Budgets are the foundation of frugal living and personal financial success. Clear and realistic budgets help us better understand our financial picture, rein in irresponsible spending, and develop stronger saving habits. If you're having a tough time sticking to your budget, maybe it's not your willpower that's broken — maybe it's your budget. Here are seven important budget mistakes you may be making.

1. Not Establishing a Goal

Your budget should be fueled by a crystal clear purpose. Before you make (or remake) your budget, decide exactly what you want to accomplish. Is the goal to get out of credit card debt? To save more aggressively for retirement? To pay off the house five years sooner? Or to simply develop a greater awareness of where your money goes? Having a goal will help you stay on-track and on-budget. (See also: 5 Tricks to Beating Budget Burnout)

2. Skipping Your Retirement Savings

Saving for the future? If it's not part of your budget, it's probably not happening. Make sure that your monthly budget includes a healthy contribution to a money market account, IRA, or 401K plan. It's one the few expenses that will actually pay you back in the long-term.

3. Relying on Inconsistent or Uncertain Income

Funding your budget with tax refunds, year-end bonuses, and other income you're yet to (and may not) receive, is a bad idea. With one little hiccup, your entire financial plan can be thrown into chaos. Instead, focus on regular and reliable sources of income. When you receive extra cash, funnel it into your savings or retirement account. (See also: Saving for Retirement and Other Long Term Goals on a Variable Income)

4. Not Expecting the Unexpected

Emergencies happen. Cars break down, pipes burst, and appliances bite the dust. If your budget doesn't include a savings plan or emergency fund, it doesn't reflect the realities of life. Avoid blowing your budget or relying on high-interest credit cards when the inevitable happens — make sure your budget has a line item for what-if's and oh-no's.

Most importantly, avoid the temptation to consider this part of your budget negotiable. Often, budgeters will simply pull from the savings column to inflate discretionary spending. As you can imagine, this approach is a slippery slope that can quickly wipe out the best intentions.

5. Ignoring the Small Stuff

Budgets are for major — and minor — expenses. If you ignore the $4 coffees, the $12 movie tickets, and the lunches out twice a week, your budget will quickly become more abstract than exact. Monitor and account for each expenditure to get a clear idea of what you're spending and where adjustments need to be made.

6. Making Things Too Complex

When it comes to household budgets, simpler is better. For most budgeters, a basic Excel spreadsheet will do the trick and allow for easy updates. The old-school envelope system is an even simpler and more direct way to way to track and tally monthly expenditures. (See also: Easy Budgeting for People Who Hate Math)

7. Designing a Budget That Won't Budge

While budgets are designed to impose limits on spending, they should still offer some degree of flexibility. Certain expenses fluctuate around the holidays, during major life events like weddings and graduations, and even in response to changing weather. If your budget doesn't allow for a little bit of responsible wiggle room, it won't be useful and you'll soon abandon it. Remember, your budget is your creation. It should respond to the needs of your life and be able to bend without breaking.

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This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: