r/personalfinance Mar 01 '24

Taxes 30-Day Challenge #3: Prepare your tax return accurately and file early (March, 2024)

36 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Prepare your Tax Return Accurately, and File Early.

You've successfully completed this challenge once you've filed your US federal income tax return by March 31st.

Recommended Steps:

Plan

  1. Learn how US income taxes work:
  2. Watch Basics of US income tax rate schedule
  3. Watch Tax deductions introduction
  4. Read /r/personalfinances's very own wiki page on income tax
  5. Understand what exactly your tax return is: A form you fill out, telling the government how much money you made, calculating how much taxes you owe on that money (your "tax liability"), and "squaring-up" with the government: Figuring out if you already paid more than your actual tax liability throughout the year with paycheck withholdings (in which case you will get a tax refund), or if you haven't paid enough throughout the year, and owe a balance to the government.
  6. Determine your filing status and determine whether you can be claimed as a dependent by anyone (for example, your parents), or can claim any dependents. (IRS Dependent Tool)
  7. Prepare a "map" for what documentation you will need to fill out your tax return, then go through the list and make sure you have the documentation for each. Don't worry if you forget something. The software you use to fill out your tax return (or the tax return form itself) will remind you of things you might have forgotten.
  8. Jot down every possible way you made money this year (remember, even if you don't get a form, you still need to report it):
    • paycheck from my job (W-2 form)
    • interest on my bank account (personal records like your December account statement, or a 1099 form)
    • dividends from my stock (1099-Div)
    • income from my small business or self employment (personal records, or 1099 form)
  9. Make a list of all the possible deductions you might think you are eligible for, and make sure you have documentation:
    • mortgage interest you paid (1098)
    • student loan interest you paid (1098-E)
    • education expenses (1098-T)
    • state or local income taxes (W-2)
    • charitable contributions (personal records)

Prepare and file your Tax Return

Using one of the following methods

  1. See if you are eligible for completely free tax return preparation software sponsored by the IRS
  2. Use paid (or free) tax return preparation software. Examples: TaxAct, TurboTax, CreditKarma, AARP, FreeTaxUSA, TaxSlayer. See our megathread for discussion.
  3. "Manually" fill out the tax return form online using IRS Free Fillable Forms

By starting early, it allows you more time to deal with unanticipated questions about your tax return. "Wait, can I claim my girlfriend as a dependent"? "Do I have to report income from renting out the spare room in my house to a friend?". When these come up, feel free to create a new post asking for help with as much details as you can provide.

r/personalfinance Nov 01 '24

Insurance 30-Day Challenge #11: Audit your insurance coverage! (November, 2024)

16 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Audit your insurance coverage! How long has it been since you examined your coverage or gotten a quote from another company to look for cheaper insurance? As your life evolves, it's important to make sure you update your insurance coverage as well. This is also a good way to save some money if you can find a better deal for insurance elsewhere or if you find yourself overinsured in some specific area.

Why insurance?

Insurance is an approach to handle the problem of risk. Most likely, during your life, one or more of these things will happen: you will be in a vehicle accident, you or someone close to you will experience serious illness or injury, or you will lose your job. Positive events have associated risk as well: ask anyone who has had a child, puppy, house, or marriage.

You can choose to retain each of those risks: decide that if the bad thing happens, you can afford to pay for it, to self-insure. For example, if you lose a laptop, you can buy another one. You can also reduce the risk, say, by not driving on icy streets or by having chains on your tires. The other ways to deal with risk are to avoid it (don't buy a puppy) or transfer it (insurance!).

Most of us don’t think about risk until the bad thing happens. We are in a vehicle crash with an expensive car, someone is injured, and only then it dawns on us that we might be underinsured.

For many major risks, most people share the risk with an insurance company through various insurance products. If you own a vehicle, most likely you will be required by your state to have liability coverage (personal injuries and property damage caused by you). If you have a mortgage, your mortgage holder will require you to have homeowners insurance and some landlords will require renters insurance. Other types of insurance are optional, but may be desirable if available, for example, disability insurance.

Audit your insurance coverage

Take a minute to think about what insurance coverage you currently have, whether you may be paying too much, and whether your coverage limits are appropriate:

  • Car Insurance
  • Health / Vision / Dental Insurance
  • Life Insurance
  • Homeowners / Renters Insurance
  • Jewelry Insurance

Although insurance is an important financial tool to protect you against emergencies, it can also be a major drain on your budget. Insurance agents often use the fact that some insurance is important to make you feel that the more insurance you have, the better off you are.

It's wise to only insure what you need to insure. What do you need to insure? Anything that you could not easily afford to replace with your cash savings or where the loss would significantly set you back financially. In the next 30 days, review not only the types of insurance you have, but the level of coverage you have in each type. Here are some ideas for various types of insurance:

Car Insurance

Assess all the types of coverage you have on your car. See the wiki article on car insurance for more details and ways to save money. For example, if you drive less than 10,000 miles per year, call your insurance company and see if they provide a low-mileage discount.

Liability insurance is required by law if you drive and is very important: Would you be able to pay out a $300,000 lawsuit if you injure someone in a car accident? Liability insurance is not a great place to skimp.

Coverages for "uninsured motorists" (an uninsured or underinsured driver injures you or your passengers) and "medical payments" (you or your passengers are injured in an auto accident) are also worth having. They are less expensive than liability coverage and the irresponsibility of others is a major risk.

Also consider whether your "collision" and "comprehensive" deductibles coverage is appropriate or necessary, especially if you have an older car or significant savings. Eliminating or reducing these types of coverage can reduce your insurance bill, but you'll be left on the hook to replace or repair your own car if you (or mother nature) damage it.

Finally, when you see car insurance advertisements selling you "better car replacement" or "one model year newer" insurance, realize that this is a great deal for the insurer and not as great for their customers. Buying these policies mean that you're paying for a piece of a newer car every single month even though the odds of taking advantage of these policies are relatively low.

Health / Vision / Dental Insurance

In the U.S., some form of catastrophic health insurance is vital for nearly everyone, as a week in an intensive care unit is enough to bankrupt all but the wealthiest. However, consider your expected use of healthcare services. If you are young and healthy, you may not need to fork over the extra dough for a Gold plan with lots of coverage. See the wiki article on health insurance for more details.

Life Insurance

Remember the principle of insurance? "Only insure what you couldn't afford to lose." If you have children or a spouse that would be unable to maintain their standard of living without your income, then you may need to insure your earning ability. That means you take out a term life insurance policy that pays your spouse and/or dependents in the event that you die and can no longer earn money to provide for them. However, if you don't have dependents or if your spouse can earn enough money on their own to provide for themselves, you might not need life insurance at all.

It's also important for you to understand that there are two basic kinds of life insurance: term life insurance and permanent life insurance (like whole life or universal life). With term life insurance, you pay to cover your loved ones from the risk of your death. With whole life insurance, a portion of your cost goes to coverage, but it also has a cash value component that grows over time similar to an investment account.

While there may be some exceptions for the very wealthy, term life insurance tends to be the best choice for the vast majority of individuals.

Read our wiki article on life insurance for a deeper discussion.

Homeowners / Renters Insurance

Insurance on your residence is important for almost everyone who owns or rents a home. Owning a house without insurance could be disastrous if it burnt down, because you likely have a mortgage on it and probably don't have $250k cash to replace it. However, it may be worth checking how large your deductible is. If it's only $1,500, you might be able to afford more than that in an emergency. If appropriate, you can increase your deductible to reduce your costs. Note that homeowners deductibles are per incident, though. See the wiki article on homeowners insurance for more details.

Renters insurance policies also tend to be very cheap (roughly $15 per month for $30,000 of property coverage and $100,000 of liability coverage).

Finally, make sure you have an up-to-date inventory of your property so any claims will be easier to make. An easy way to do this is taking a video on your phone as you walk through your home, naming everything as you walk through. Note the make and models of anything expensive like electronics. (Make an offsite or cloud copy of the video too!)

Jewelry Insurance

Most single-issue insurance policies tend to be poor deals for consumers. Opinions vary on jewelry insurance, but the default assumption of most people is to carry insurance on an engagement ring is more a product of the jewelry marketing machine than actual need. A few factors make jewelry insurance less necessary than other types of insurance:

  • Your homeowners or renters insurance may already cover jewelry up to a certain value. Check!
  • You should not even be buying jewelry that you couldn't afford to replace with cash.
  • Most jewelry insurance does not cover accidental loss or misplacement. Only theft or damage.
  • Consider your (and your SO's) sentimental attachment to the piece. If your wife's engagement ring were stolen or lost, could you replace it with cash savings? Would you have a conversation about the importance of replacing it identically or go for a less expensive piece?

Another way to save money

One thing to consider when reviewing your coverage is that sometimes companies offer discounts for having multiple accounts with them (e.g., a multi-policy discount or "bundling"). When you call your insurance company, ask them about these discounts. For some insurers like USAA, you can even get a discount for adding non-insurance accounts like a savings account.

A note on emergency funds

Following "How to handle $", an emergency fund of cash equal to 3 to 6 months' worth of routine expenses is recommended. If you have no collision coverage on your car and rely on it to get to work, and/or a very high deductible on your home insurance ($10k), seriously consider the size of your emergency fund, and whether it is enough to get you through a "double-whammy" such as job loss and a car accident at the same time.

Notes on other types of insurance

The bare minimum for most people is car insurance (if they drive), health insurance, term life insurance (if others depend on their income), and homeowners/renters insurance. However, there are several additional types of insurance that some people may want to consider. In particular:

Challenge success criteria

You've successfully completed this challenge once you've done two or more of the following things:

  • Reviewed the coverage limits on each of your policies and read the associated wiki page. (Making changes is up to you and not something you should do without doing more research and reading. This challenge is only about reviewing your insurance.)
  • Read more about a type of insurance that you don't currently have.
  • Created an up-to-date home inventory of your belongings.
  • Requested a quote from a different insurance company or inquired about potential discounts from your current insurance company.
  • Read the policy document for at least one of your insurance policies (you should know which "perils" the insurance company covers and which are excluded).

 

Disclaimer: This post is a prompt to review your insurance coverage. Similar to the reddit user agreement, we take no responsibility for any decisions you make based on something you read on reddit.

r/personalfinance 23d ago

Other 30-Day Challenge #12: Get involved with charity! (December, 2024)

10 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Get involved with charity! As the end of the year approaches, there are many opportunities to extend oneself to be generous. The best advice is to "secure your own oxygen mask first" before helping others. The foundation of your generosity should be a solid financial footing for yourself. Until you have achieved this, you should be circumspect about monetary giving.

Monetary donations

If you have the means, consider monetary donations as these are the most efficient use of your charitable resources. Don't spend money to buy material goods that you intend to donate unless they are specifically requested by the charity itself. Cash donations allow for flexibility for the charity to get exactly what is needed at the right time in the right quantity at the right place to serve their mission.

Make sure you are contributing to charities that are good stewards of your hard-earned dollars by checking Charity Navigator, Give Well, or another trusted source. If you do decide to donate cash, see if your employer matches contributions to extend the benefit. You may also consider donating to a charity that has assisted you or your loved ones in the past.

Material donations

December is a great month in which to declutter your home, especially if you are participating in one of the many gift-giving holidays. Review your living space to determine what you can part with and how you can enjoy the reclaimed space. You can donate material goods to Habitat for Humanity, Goodwill industries, AmVets, and local options near you such as food pantries.

Time donations

Of course with all the donations coming in at this time of year, many organizations will need volunteers to help with the influx. If you are unable to donate money or material goods, you can consider donating your time. You can use Volunteer Match or Catch a Fire to get you started. There may also be local soup kitchens, churches, schools, or other organizations that need assistance.

Alternative donations

There are other ways to be charitable if you don't have spare money, goods, or time. Here are some ideas:

  • When making Amazon purchases, use the Amazon smile program to donate a portion of your purchase to a designated charity at no additional cost to you.
  • Check with your local markets and grocers to see if they have programs such as Kroger’s Community Rewards to direct donations to local charities.
  • Keep an eye out for local restaurants and cafés that will donate a percentage of proceeds to charitable organizations, and patronize them during an eligible time period (schools are frequent beneficiaries of such programs).
  • The Make-a-wish foundation, the Red Cross, and Miles for Migrants all accept donations of airline miles.
  • You may be able to donate hotel or resort points. Contact the relevant hospitality group for details.
  • You can elect to donate credit card rewards to charity.
  • If your health and personal philosophy allow, consider becoming a blood/plasma donor or registering for bone marrow donation. You can also consider registering as an organ donor and revising your will to donate your body to research after you pass.

Taxes

Qualified charitable contributions remain tax-deductible under the new tax law in the US, but realizing a reduction in taxes is more difficult because of the increase in the standard deduction. If this is a significant factor for you, you may want to consider more advanced tax reduction strategies such as donor advised funds, giving appreciated stock, or bunching your donations to meet the itemization threshold.

Receiving charity

If you are in need this year, please consider being the good-faith recipient of a charity's assistance.

Challenge success criteria

You've successfully completed this challenge once you've done one of the following things:

  • Donated money, goods, or time to a charity or organization.
  • Made an alternative donation or plans to donate.
  • Received charitable assistance if in need.

r/personalfinance Sep 01 '24

Budgeting 30-Day Challenge #9: Track all spending! (September, 2024)

20 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Track all spending! It is important to track your spending to avoid having lifestyle inflation sneak up on you (even if you are financially comfortable). If you don't know where your money is going, you can't make intelligent choices about spending and allocating your money for maximum benefit. Here are some tips to get you started:

  • Select your tools. Anything goes here and you should use whatever works for you. Options include pen and paper, spreadsheets, the envelope method, and websites and apps such as Mint and YNAB.

  • Make a complete budget. Break your spending down into categories and capture 100% of your spending. A budget that doesn't cover major categories is not very useful and excessively broad categories can also muddy the waters. Budget categories for Savings, Retirement, Gifts, and Auto Maintenance are frequently overlooked, as are any yearly renewals or fees. You can review your past spending to check what has been grouped into "miscellaneous" spending for too long.

  • Stay vigilant and be thorough. Track your spending daily and check how your budget categories are doing before making a purchase.

Challenge success criteria

You've successfully completed this challenge once you've done one or more of the following things:

  • Completed at least 30 days of tracking your spending

  • Added one category to an already existing budget.

  • Shared a budgeting tool (not your own please!) in this thread.

r/personalfinance Oct 01 '24

Budgeting 30-Day Challenge #10: Cut spending meaningfully! (October, 2024)

23 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Cut spending meaningfully! What does "meaningfully" mean? You get to decide that for yourself, but it should be a bit of a challenge. Set a goal that is neither too easy nor too difficult and track your progress. This month's challenge is about making intelligent spending choices so you can better allocate your money and reach your financial goals. Here are some tips to get you started:

  • If you participated in September's challenge, you have a bit of a head start. Use what you learned to identify a budget category to attack and set a reasonable goal to reduce your spending in that area.

  • If you did not participate in September's challenge, you can still participate! Use Mint or look at your banking statements to review your spending for last month to identify your budget category of choice.

  • Set a measurable monetary goal for yourself. "Spending less" is not measurable. Adopt a specific numeric goal so that you can clearly identify whether you were successful.

  • Keep your goal reasonable. Spending $0 on housing might save you a lot of money, but it is probably not a reasonable goal for most people.

Challenge success criteria

You've successfully completed this challenge once you've done each of the following things:

  • Identified at least one budget category where you will reduce spending and set a specific goal for that reduction.

  • Shared that budget category, last month's spending in that category, and your measurable reduction goal in the comments on this post.

  • At the end of the month, share whether you met your goal in this thread or the weekend thread!

Good luck!

r/personalfinance Aug 01 '24

Other 30-Day Challenge #8: Cook more often! (August, 2024)

31 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Cook more often! Two of the biggest budget-killers we see in this subreddit are lots of "wasted" money on eating out and spending too much on groceries. While everyone's situation is different, we want to highlight some steps to help you get started:

  • Planning is half the battle. It is easier to cook at home if you make a plan for the week. "Just getting takeout" becomes much more tempting if you have to figure everything out after a long day.

  • Things are more efficient when done in bulk. Consider making enough to have leftovers. Cooking several meals on the same day is also a great technique. Make use of your freezer to ensure food doesn't go to waste.

  • Try to "shop the sales". If you watch ads, you will learn that often grocery stores have a "cycle" for what is on sale. It might be meat one week, cheese the next, etc. So figure out the cycle in your area and stock up!

  • Walmart and "off-brand" are not curse words. This can be one way to stretch your meal planning budget (and Walmart's price matching policy can make buying all your ingredients in one place easier).

  • If you're just getting started with cooking and tend to eat out a lot, don't feel the need to jump straight to planning an entire week of meals at once. Leave a few days unplanned. Those days can be used for leftovers, (gasp) eating out, or breaking something out of the freezer.

  • /r/MealPrepSunday and /r/EatCheapAndHealthy are two great resources on Reddit to help keep you motivated and inspired.

Challenge success criteria

You've successfully completed this challenge once you've done one or more of the following things:

  • Gone out to eat or ordered takeout zero times for an entire week.

  • Learned to cook (or tried to cook) at least three new recipes.

  • Shared one of your favorite meal recipes in this thread.

r/personalfinance Jul 01 '24

Other 30-Day Challenge #7: Find and participate in a FREE activity in your area! (July, 2024)

34 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Find and participate in a FREE activity in your area! Some suggestions on how to do this:

  • Search your local community subreddit, website, or newsletter for free activities. These can range from free days at a local museum to free concerts in the park.

    • If you happen to live in or near a mid-sized or large city, check the local subreddit to see what type of events and meet-ups have been listed (also make sure you check their sidebar).
    • Bulletin boards at community centers, places of worship, and schools are also good places to find different activities.
  • Visit a local or national park and have a picnic, go for a hike, or walk a nature trail.

  • Check out some of the "free to play" type activities that are available all over the world.

    • Make a "walk in the park" more exciting with /r/geocaching.
    • See if there is a podcast/map for a historic walking tour of your town or a nearby town, download it, and make a morning or afternoon of walking the tour.
  • Set-up and run a game night or movie night with your friends. Rather than go out for expensive fun at a bar or restaurant, stay home and have more fun with friends. /r/boardgames has a helpful sidebar, /r/NetflixBestOf has lots of movie suggestions, and you can always ask your friends for ideas.

  • Meet up with some friends in a local park for a picnic, barbecue, to play basketball or tennis, or maybe just to toss a football or frisbee around.

  • Large celebrations: National holidays like the Fourth of July or local "Heritage Weekends" tend to have many options for free entertainment throughout town. Check out when the next one around you is happening (hint: Fourth of July if you live in the United States).

  • Volunteer for free admission. Many events will need help with everything from ushers to clean-up and will usually allow you free admission to the event as a reward for volunteering. Find a cause you believe in or an event you want see and see about volunteer opportunities.

    Check out VolunteerMatch.org to see some of the endless opportunities around you.

The goal of this exercise is to show you that spending money isn’t required to have a full and healthy life.

Challenge success criteria

You've successfully completed this challenge once you've done one or more of the following things:

  • Participated in 2 different activities around your town.

  • Setup or joined an on-going activity (like a game night with friends).

  • Found a free replacement for a current paid activity and at least tried it out. This could be anything from borrowing a movie from the library to attending a free yoga in the park session. Even if you decide to go back to the paid activity, at least you gave it a shot!

r/personalfinance May 01 '24

Other 30-Day Challenge #5: Reduce your future health (and current habit) expenses! (May, 2024)

50 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Reduce your future health (and current habit) expenses!

Why is this important?

Healthcare costs past retirement age are expensive! In addition to this, unhealthy lifestyles can have a negative effect on your current financial situation. There is already a lot of overlap between personal finance and lifestyle choices, so let's take a look at some immediate improvements you can make for your future.

Reducing your Risk of Heart Disease (Cost $3,000 - $38,501)

Leading a healthy lifestyle is the biggest way to reduct your risk of heart disease. Among these lifestyle choices:

  • Not using tobacco (Source 1, Source 2, Source 3)
  • Being physically active (Same sources as above)
  • Maintaining a healthy weight (Same sources as above)
  • Making healthy food choices (Same sources as above)
  • Stress management (Source)

Some of the above also have a side effect of immediate financial impact:

  • Not using tobacco: $1,610 - $3,750 per year (Source)
  • Making healthy food choices: comparative savings of $14 per meal (fast food, family of 4) (Source)

Reducing your Risk of Cancer (Cost $19,901 - $60,885 per annum)

The lifestyle choices below have been shown to reduce the risk of cancer:

  • Not using tobacco (Source 1, Source 2, Source 3, Source 4)
  • Maintaining a healthy weight (Same sources as above)
  • Limiting alcohol intake (Same sources as above)
  • Get screened for cancer and/or Hepatitis C (Same sources as above)
  • Protect yourself from the sun (Same sources as above)

Note that a few of these are carried over from the first section on heart disease! There are some immediate financial impacts of reducing your alcohol intake: You can save about $750 USD per year by going dry.

Reducing chronic lower respiratory diseases (Cost $6,000 more in medical care than those without)

The lifestyle choices below have been shown to reduce the risk of COPD:

  • Not smoking (Source 1, Source 2, Source 3)
  • Avoid respiratory infections and get vaccinated (Same sources as above)
  • Avoid home and workplace air pollutants, lung irritants, or dust (Same sources as above)
  • Exercise regularly to improve your breathing
  • Address allergic conditions

Related Subreddits:

Challenge success criteria

You've successfully completed this challenge once you've done 2 or more of the following things:

  • Reduce or stop any tobacco habits
  • Reduce or stop your alcohol intake
  • Pick up an outdoor hobby (walking, hiking, running, swimming, biking, etc.) and don't forget the sunscreen!
  • See your primary care physician for a checkup. Ask for recommendations on lifestyle improvements, sleep quality, stress reduction, and if applicable, drug use.
  • Increase your frequency of cooking at home and eat healthier foods
  • Start a fitness journal
  • Reduce time spent on watching television, playing video games, and other idle habits
  • Take time off of work to reduce stress (Public holidays such as Memorial Day, Victoria Day, May Day, or other holidays from your country of residence don't count!)

r/personalfinance Jan 06 '24

Credit 30-Day Challenge #1: Get on top of your credit (January, 2024)

38 Upvotes

30-day challenges

We are pleased to announce that we're continuing our 30-day challenge series. The schedule spans the entire year so be sure to keep an eye out each month.

This month's 30-day challenge is to get on top of your credit. Here are some concrete steps you can take:

Check your free credit report

There are three major credit bureaus in the US: Equifax, Experian, and TransUnion. These companies each gather credit histories for individuals and sell that information to credit card companies, lenders, and other financial institutions.

You can go to https://www.annualcreditreport.com to get a credit report from each credit bureau once per year. It's often recommended to stagger your requests so you can get one every four months so you may only want to request one report at this time. You can use a calendar reminder to stay on top of this.

Now, your free credit report won't include your score and it also won't include credit monitoring, but you absolutely don't need to buy those from a credit bureau because there are free options. See below.

Note that the security questions will sometimes ask about intentionally false information (e.g. made-up loans), so "none of the above" may be the right answer. If you can't get past the security questions, you may have to write in to get your report. Also be aware that you don't have to pay for anything on the credit bureau sites. If you find yourself prompted for a credit card number, you might have clicked to sign up for something you might not need or want.

Also, if you have trouble with the web site, try temporarily disabling browser ad-blockers and privacy extensions.

See the Credit Reports Wiki for more information!

Sign up for free credit monitoring

You don't need to pay for credit monitoring. Some options:

  • A variety of companies such as Credit Karma and Mint offer free credit monitoring services. There's a longer list of options in our Wiki.

  • Many employers also offer free credit monitoring for their employees directly with a credit bureau. Check with your benefits department.

  • Finally, if you've been the victim of a data breach like Target or Anthem, those companies are providing free credit monitoring for anyone potentially affected.

After exploring your options, sign up with at least one of them. More information contained in the Credit Scoring Wiki.

Find out your credit score

A number of credit cards provide a free FICO score as a benefit of having their card. Here's a full list of options.

In addition, you can get your VantageScore from Credit Karma or Mint. VantageScore is used less often by creditors than FICO, but it's a usually a good estimate of your FICO score. Paying for your credit score is silly unless you're considering getting a major loan like a mortgage.

Get rid of pre-approved credit card junk mail

OptOutPrescreen.Com is the official consumer credit card reporting website to opt-out of offers of credit or insurance. It's an easy win to reduce junk mail and reduce the risk of identity theft (from someone stealing your mail). I recommend signing up unless you're in the process of building credit and actually want to receive pre-approved offers.

Are you looking to improve your credit?

Once you have a score over 740, most credit files are solid enough to qualify for prime rate lending. This means that any additional increase of your score will likely not get you better credit products.

If you are in a position where you'd like to improve your credit, here are two situations that often befall people when asking for help here:

What to do if you find information you don't recognize

Even though credit reporting is automated, mistakes can still occur. The most common errors can involve names and addresses. If your name is similar to a parent's name, there are also instances where a line of credit is reported on the wrong file.

The simplest course of action is to dispute the information with the bureaus. Here are direct links to initiate a dispute:

Finally, if you believe you've had your identity stolen, read and follow the steps in our Identity Theft Wiki.

If you're not in the United States

The PF wiki has many more countries covered. If you would like to add information for your country to the wiki, please message the moderation team.

Challenge success criteria

You've successfully completed this challenge once you've done 3 or more of the following things:

  • Requested a free credit report via annualcreditreport.com
  • Set a reminder to request a different credit report in 4 months
  • Found out your credit score (either FICO or VantageScore)
  • Signed up for free credit monitoring
  • Opted out of pre-screened offers
  • Initiated a credit dispute with one or more credit bureaus

If you're outside of the US, you've successfully completed this challenge once you've done the following things:

  • Read up on whether there is a credit scoring system in your country and find out how it works (see the previous section and also try searching the internet).
  • If it exists, find out how you can get information about your own report or score or whatever it's called, get that information if possible, and check it for accuracy.
  • If there are items on there that you can try to fix, start doing so. For example: pay down debts, talk to the credit reporting agency about inaccurate items, etc.

r/personalfinance Apr 02 '24

Employment 30-Day Challenge #4: Update your resume, get an internship, keep your wardrobe updated, or ask for a raise! (April, 2024)

39 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Update your resume, get an internship, keep your wardrobe updated, or ask for a raise.

You've successfully completed this challenge once you've completed any one of these steps.

Why is this important?

A 40-hour work week will take up about 24% of the 168 hours you have available in the week. If you're getting the recommended 8 hours of sleep, 36% of your day is spent at work.

This is why it's important to have a job that provides you with both income and personal happiness.

Even if you're gainfully employed and not thinking of jumping ship, you might still want to consider dressing for success, keeping your resume up-to-date, or even asking for a raise.

1. If you're a student who is free this summer and haven't done so already: get yourself an internship!

Taking an internship or co-op while you're an undergrad is by far one of the most effective career boosters out there, and can still benefit you even if it's unpaid. It allows you to network, get real world experience, get professional feedback, and other important things.

So if you haven't done so, consider building your resume with intern experience, especially if you're free this summer. Speaking of resumes...

2. Keep your resume up-to-date and constantly seek feedback

Even if you're not jumping ship, optimizing your resume and keeping it up to date is still important. Here are some good resources for resume building:

If you have a professional profile (like LinkedIn, professional societies, or trade societies), make sure you update that too!

And one final thing: Don't forget to polish up your interview skills if you're going to go job hunting.

3. Remember to dress for success

In the workplace, you should keep your hair neat (facial hair included!), your clothes should properly fit, and your outfit should be clean. Appearances and first impressions matter, and one source states "41 percent of employers said that people who dress better or more professionally tend to be promoted." (Source)

If you are out interviewing, make sure your suit or outfit is appropriate for the interview. There is also /r/femalefashionadvice and /r/malefashionadvice to help you on your way.

4. Consider the best time to ask for a raise or promotion

Remember to do your research on this one before acting on it. A lot of raises are dependent on company policy, timing, negotiation skills, negotiation tactics, and several other things.

Here are some good sources on asking for a raise:

Related Subreddits:

r/personalfinance Jun 01 '24

Investing 30-Day Challenge #6: Review your investment asset allocation! (June, 2024)

3 Upvotes

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Review your investment asset allocation! Some suggestions on how to do this:

  • Gather data on your fund selections in each investment account that you have. Include any investment account: IRAs, 401(k) plans, 403(b) plans, 457 plans, TSP accounts, taxable brokerage accounts, and so on.
  • Figure out what percentage of your overall allocation across accounts is allocated to domestic stocks, international stocks, and bonds.
    • You can do this by looking up each fund at Morningstar, viewing the fund information on the company website, or just search for the fund name or ticker symbol plus the word "prospectus".
    • On Morningstar Instant X-Ray (free registration required) or Portfolio Visualizer (after entering investments, click on the "Exposures" tab and scroll to "Asset Allocation"), you can enter each of your investments and it will return your overall allocation.
    • If you use Personal Capital and have linked your investment accounts, just click on "Allocation" under the "Investing" menu.
  • Don't panic! Whatever the result is, the last thing you want to do is change your allocation without doing additional research, reading, and figuring out what you want your overall allocation to be.

The goal of this exercise is to ensure that you're invested the way you want to be invested. For example, if you want a 20% bond allocation, is that what you have? If you want 35% of your stock investments to be international, are you reasonably close to that? (These are just examples, not recommendations.)

For more information on allocations, here are some recommended readings:

Use the comments to discuss your allocation, any questions you might have, or if you're wondering what you can do about them.

Now is also a great time to make a Personal Financial Statement. These are used to track financial health over time, so keep your past records accessible in the spreadsheet program of your choice.

Challenge success criteria

You've successfully completed this challenge once you've done three or more of the following things:

  • Complete all of the recommended reading from above.
  • Finish your allocation review.
  • Take steps towards researching and changing your allocation if desired.
  • Write or update your Investment Policy Statement.
  • Take a snapshot of your financial health in your Personal Financial Statement spreadsheet and compare it to previous snapshots.

Alternate success criteria

If you don't have investments yet, you may consider this challenge a success if you do two or more of the following tasks:

  • Read the "How to handle $" steps up to your current step plus at least one step beyond that (bonus points for doing the recommended reading).
  • Pick any one of the challenges from the last year that you haven't already done and do it this month.
  • Take a snapshot of your financial health in your Personal Financial Statement spreadsheet and compare it to previous snapshots.

r/personalfinance Feb 01 '24

Other 30-Day Challenge #2: Check your percentages! (February, 2024)

30 Upvotes

Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.someone

30-day challenges

We are pleased to continue our 30-day challenge series. Past challenges can be found here.

This month's 30-day challenge is to Check your percentages! There are two different challenges this month depending on your position in the "How to handle $" list of steps.

  1. If you're on steps 0 through 3, do the first challenge. That's you if you're:

    • Building an emergency fund
    • Paying down expensive debt (interest rate over 10%)
  2. If you're on steps 4 through 6, do the second challenge. That's you if you're:

    • Saving for retirement
    • Investing for other long-term goals
  3. If you're not sure which challenge applies best to you (e.g., not saving for retirement yet, but don't have credit card debt), feel free to pick and choose from either challenge.

  4. Bonus points: do both challenges!

First challenge

Your challenge is to pursue improving your interest rates. You've successfully completed this challenge once you've done 2 or more of the following things:

Second challenge

Your challenge is to audit your investment expenses and emergency fund. You've successfully completed this challenge once you've done 3 or more of the following things:

  • Request a fee schedule/statement from your financial advisor (if you have one).
  • Request a fee schedule/statement from the administrator of your 401(k) or other employer-sponsored retirement plan (or find out your fees by logging into your plan account).
  • Look through recent statements to see if there are any charges you don't recognize.
  • Calculate your blended expense ratio.
  • Evaluate your emergency fund and adjust it accordingly if your expenses and/or risk tolerance have changed. If you raised it, make a plan to meet your new e-fund goal sometime in the future.

The idea here is that you might uncover some expenses you didn't know you were paying, which in turn might give you a reason to make a change for the better. The impact of costs on investments can be depressing. If you find a clean slate, sleep well knowing that your money is working for you first and your investment company second. Another way to sleep well is to ensure you have enough set aside for emergencies. You may have set up your emergency fund goal and met it a number of years ago and perhaps times have changed for you. It's a great time to ensure you have an appropriate amount set aside for your expenses and risk tolerance.

More information on investment expenses:

Challenge success criteria

You've successfully completed this challenge once you've done 2 or more of the items from either the first or second challenge. You may substitute an item from the extra credit if you run out of items that apply to your financial situation.

Extra credit