Quick Tips: Easy Steps for Starting out on the Right Foot
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We've got a tip for that.

If you missed Money Management 101, consider this your cheat sheet. Whether you’re signing a lease on your first apartment or looking for ways to rein in your spending, we’ve got a tip for that. These bite-size bits of financial advice are designed to help you get a grip on your finances—and then get back to doing something about it.

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When it comes to budgeting, figure out what works for you. Daily? Weekly? Yearly? It all depends on your savings goals and spending habits.

Setting a monthly budget is a very useful exercise, especially because many expenses recur each month. But you don’t have to just think monthly when it comes to budgeting. Try breaking down your budget by day or by week (or by each paycheck)—it might give you a more concrete sense of how much you can safely spend at a time. And if you’re saving for something big, like a car or a home, you can give your budget a longer-term view. The point is to come up with a system that works for you and keeps your spending and savings on track.

If you think a budget’s too much hassle, try this budgeting baby step: Hang on to your receipts.

If you find it tough to make a budget and stick to it, try this instead: For one month, keep all of your receipts in your desk drawer. At the end of the month, tally up the total (don’t forget to add in automatic bill payments and anything else you buy online). Single out smaller expenses, like ATM fees or music downloads, which can really add up, and look for any obvious places to cut back.

Take a week off from spending. Think of it as a vacation for your debit card.

One way to rein in overspending is to, well, stop spending altogether. Going on a weeklong cash-fast is a good way to remind yourself that you are in control of your budget. Pay for what you have to, of course: bills, groceries, rent, etc. But as for everything else? Look for free alternatives, or just say no. When you go back to spending, you may find it easier to pass on whipping out the credit card for that [insert your weakness here] you don’t really need.

How much do you spend on eating out? Cutting out one trip a week to your favorite lunch spot can add up to a lot of savings.

Even at the cheapest sandwich place, it’s hard to get a decent lunch for less than 10 bucks. If you were to put that $10 into an interest-bearing account every week instead, you would have more than $5,000 within a decade (assuming a 1% interest rate). And if you increase that amount to $25 a week, your savings could grow to nearly $14,000 in 10 years. We’re not saying you should never eat out—but cutting back on even the smallest discretionary spending does add up.

Charities need help year-round, not just at the holidays. Try to work a small donation into your monthly budget.

On average, Americans give 3.2% of their income to charity. That may not seem like much, but it can feel like a lot when you factor in your expenses. Determine what you feel comfortable giving, and work it into your monthly budget for this coming year. If you can’t find a way to fit in a monetary donation, volunteer instead. Time really is money—and most charities need as much as they can get.

You don’t have to be an accountant to make a budget. Just sort your spending into basic categories, and get on with your life.

Many online budgeting tools will ask you to list practically every expense, from rent and utilities to that vintage sweater you couldn’t live without. But don’t get overwhelmed if you can’t come up with exact dollar amounts—the idea isn’t to add up every receipt in your wallet. The goal is to find areas where you can spend less—and gain a better understanding of what you can really afford to buy.

If you get a raise or promotion—AWESOME! Now make a plan to stay within your old budget.

It’s easier to maintain a modest lifestyle than cut back once you’re used to splurging. If you get a nice raise, resist the urge to move on up to a two-bedroom of your own. Living within your old budget and saving or investing at least half of your extra cash can help you reach your savings goals faster. Consider increasing your retirement account contributions or setting up a monthly automatic transfer from checking to savings.

Create savings buckets for your various goals. It might help you stay on target.

If you’re saving up for multiple goals, consider setting up different accounts for each one (or using a bank that lets you put your savings into subaccounts) instead of lumping everything together. Being able to see the amounts you’ve saved for each goal may help you more easily track your progress, and prevent you from dipping in for other expenses. This setup doesn’t work for everyone, though. One consolidated account is often better if you’d rather streamline the process of managing your money—and it could earn more interest in the long run.

Go plastic-free for one week.

Here’s one way to cut back on spending: Kick it old school for a week and leave your plastic at home—credit and debit. Go to your bank today and withdraw the amount of cash you think you’ll need to cover your expenses for the next seven days. A set limit on your spending can make you think twice about making that purchase you "can’t live without".

Create a game plan for your holiday gift giving

Whether you line up at daybreak for Black Friday deals or spend weeks searching for the perfect gift, make a plan and stick to it.
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Moving your debt around doesn't make it go away—consider balance transfers carefully.

If you're carrying a balance on a card with a high interest rate, a balance transfer can be a great way to save money. But while zero percent APR can seem enticing, a habit of transferring balances can be a red flag to credit bureaus that you can't manage your debt. And remember—even at its best, a balance transfer is an aid, not a cure. You still need to work to stay on top of your payments and try to pay down more than the minimum each month. If you're late even once, it's a good chance that your new interest rate will surge and you'll be back where you started.

Create a spending plan and put it on automatic.

Most online bank accounts allow you to put all your recurring monthly bills on autopilot, helping to prevent late fees, and sometimes even reaping points and cash rewards. Just don’t forget that due dates and minimum payments can change, so continue to monitor your bills even when they are on automatic payments. In addition, you can also make saving automatic, with auto-deposit into your IRA, savings or brokerage accounts.

A credit card that offers rewards can be pretty sweet—but it’s only worthwhile if the terms align with your spending habits.

To choose a rewards card wisely, look at the fine print. How many points do you get per dollar spent? Do the points expire or only accrue on certain types of purchases? Are there limitations on what you can buy with them? Look for a card that will reward you for purchases you regularly make. And remember that steep fees—or interest payments—can cancel out the value of your points. If that’s the case, you’re probably better off forgoing the rewards for a card with a better rate and no annual fee.

Zero-percent financing usually has a catch. Proceed with extreme caution.

When you need to buy a big-ticket item (a fridge or a car, say) and can’t pay in cash, 0% offers can be pretty darn attractive—but they can also come with some pretty ugly terms. Because the payoff period is often shorter than that of a traditional loan, monthly payments on a 0% deal can be quite steep. And if you miss a payment, you could get stuck with a late fee the size of your cable bill. If you know you’ll be able to pay off the item before the 0% rate expires, then it’s worth considering. But if you’re not sure you can, stay clear. Once the 0% financing ends, the interest rate usually goes way up—and that’s just not worth it.

Consider dipping into savings to pay down high-interest debt. It can save you money.

While it's always important to build up a savings, it's even more important to pay off nondeductible, high-interest debt like that pesky credit card balance. Compare the interest you're paying on debt with the interest you're earning on your savings, and you may find that you’re paying more than you're making. For example, let's say you have a $1,000 balance on a credit card with an 18% APR and $1,000 in a savings account earning 1% interest annually. Over the course of a year, you'll pay about $100 to your credit card company while earning only $10 in your savings account.

Applying for new credit can affect your credit score. Choose wisely.

Applying for a credit card just for the incentive is usually not worth it. You may get a bunch of airline miles, but this type of card often has a higher APR than other cards you may qualify for. Plus, applying for multiple credit cards can lower your credit score. Each application triggers a credit report inquiry, which gets logged on your report—and a lot of inquiries can have a lasting effect on your score.

If you have a credit card with a high interest rate, ask to lower it.

If you’re carrying a balance on your card with a high APR, you’re losing a lot of money. The best way to deal with this—short of paying off what you owe—is to simply call up your credit card company and ask for a lower rate. Surprisingly, many credit card companies will lower their rates if you just ask—because if you’re a good customer, they won’t want to lose you. For leverage, you can mention the lower offers you’ve received in the mail from other companies.

Using a credit card to withdraw cash is just a bad idea. Do this only in an emergency situation.

We know the scenario: You’re in a pinch, you’re at a cash-only joint, and your checking account is running dangerously low. There’s an ATM in the back; you use your credit card to withdraw a couple twenties. Problem is, you can have multiple interest rates with the same credit card, depending on the type of transaction, and cash advances are usually the most expensive. So the interest you’ll pay on that cash is going to be way higher than if you’d swiped the card for a purchase of the same value.

Why should you pay money when you don’t have the money to pay? Say no to overdraft fees.

Thanks to new legislation, banks can now charge you overdraft fees only if you opt in to them. One word: don’t. Saying no means your debit card will be declined if you’ve got a negative balance—but we think that beats paying a $35 fee for overdrawing your account by a dollar.

It’s usually not worth applying for a credit card just to get 10% off a new pair of jeans. Look past the incentives.

Avoid the temptation to sign up for a new card at the cash register. Store credit cards usually carry higher interest rates and fees than traditional cards, so you could end up paying for that 10% discount pretty quickly. Instead, shop around for the right piece of plastic—the one with the lowest APR and penalties.

Applying for new credit can affect your credit score. Choose wisely.

Credit card debt and auto loans are high-cost and not tax-deductible, which means the faster you can pay them off, the sooner you’ll have extra cash for that new smartphone. Compare your statements to find out where you’re paying the highest interest. Then make it a priority to pay off that debt first.

Just say no to charging less than $10. Carrying cash may actually help you to spend less.

Nowadays even the taco truck takes plastic. Problem is, credit cards make it even easier to spend money without thinking about it. One study even found that people paying with credit were willing to spend twice as much on Boston Celtics tickets. This week: Try carrying a set amount of cash each day, and when you spend it, it’s gone. It’s just not worth adding to your credit card balance for something less than 10 bucks.

Don’t let that trip to the emergency room send you to collections. When it comes to your medical bills—negotiate.

Here’s the thing: Doctors and hospitals negotiate with insurance companies all the time—they get paid different amounts for the same procedure based on the type of insurance the patient has. Don’t be afraid to have a polite discussion with the billing department about your financial situation. You may be able to negotiate a lower rate, or, at the very least, work out a monthly payment plan—though most places will give you a significant discount for paying in full up front.

Boost your credit score by clearing out old or inaccurate black marks.

Having a good credit score is the key to securing a car loan, mortgage or other funding. And since your entire financial history determines this score, even small mistakes you made in the past can bring your number down. To fix those, and bump up your credit score, start with your yearly free credit reports from www.annualcreditreport.com. If you find inaccurate or unflattering entries from more than 7 – 10 years ago, like late payments, your spouse's debts, or credit applications, request the credit reporting agencies to remove them. Even having one blemish removed can bump up your credit score significantly.

Closing extra credit card accounts might hurt your score

Closing a credit card account or two might seem like an easy way to improve your credit score, but the opposite is often true. Your overall credit score is partially based on your utilization ratio, which is the amount of debt you have compared to your available credit limits. The lower your utilization rate, the better. So, if you close cards but still carry the same amount of debt, your utilization rate will go up and your credit score may go down.

If you’ve got a good reason to ask for a raise, do it. Even in a tough economy.

In this economy, you may feel lucky just to have a job, let alone get paid what you deserve. But if you’ve taken on more responsibilities and your company is financially stable, it may be worth asking for more money. Set up a meeting with your boss and point out how you’ve benefitted the organization and its bottom line. Avoid mentioning personal financial problems or threatening to leave—keep it positive instead. Let your boss know the dollar amount you’d like, and be prepared to go lower if necessary. If a raise isn’t in the cards, you may be able to negotiate another perk in its place, like extra vacation time.

Relocating to a new city without a job lined up can be financially risky. Save up some cash before you move.

If employment prospects aren’t so hot in your area, the greener grass of another city (and its more promising job market) can be tempting. But before you break your lease and box up your belongings, focus on building up a cash cushion. Try to save enough to cover three to six months of living expenses while you look for work and a permanent place to live in your new town. Starting off on a clean slate may be exactly what you need—just make sure you’ve got something to lean on.

Springing for a transit pass or gym membership? Find out if your employee benefits will cover part of your purchase.

If your employer makes a financial contribution to your health plan and keeps your salary going when you’ve got the flu, chances are good it offers a few nice quality-of-life perks, too. If you’re considering a car-sharing membership, donating to charity, taking a class, joining a gym, or shopping for a big-ticket item, remember to check your benefits package first. Some employers provide reimbursement offers, store discounts, and matching gifts. Don’t go it alone if you’re lucky enough to work for a company that will share the expense.

Update your resume—even if you’re not actively looking for a new job.

This week, spend an evening updating your resume. It’s not as fun as watching reality TV, but it’s important to have a current resume on hand just in case you find yourself needing it. Look for ways to expand your network: Connect online with people in your field and stay in touch with contacts at companies you’d like to work for. Even if you’re not looking for work, it can pay off to do this legwork now. If you do suddenly find yourself without a job, you’ll have contacts you can call upon for leads and potential opportunities.

If you get a raise or promotion—AWESOME! Now make a plan to stay within your old budget.

It’s easier to maintain a modest lifestyle than cut back once you’re used to splurging. If you get a nice raise, resist the urge to move on up to a two-bedroom of your own. Living within your old budget and saving or investing at least half of your extra cash can help you reach your savings goals faster. Consider increasing your retirement account contributions or setting up a monthly automatic transfer from checking to savings.

Even if you’ve been fortunate enough to stay employed through the downturn, it’s always good to prepare for the unexpected.

If you’ve noticed a lot of layoffs lately—or if you have reason to fear losing your job—it might be a good time to take a few steps to protect yourself. For starters, look for ways to cut back on discretionary spending so that you are prepared in case you have to rely on unemployment checks or a partner’s income. Then, pad your emergency fund with the money you’re saving—with the goal of building up your emergency fund so that it can cover three to six months of living expenses, should you ever need it.

If you usually get a fat tax refund—or the other way around—it might be time to adjust your W-4.

It may feel like a win to get a $400 refund from the government every April, but it just means that you’re overpaying to begin with. Withholding less from your paycheck will give you extra cash on payday. On the other hand, if you withhold too little, you could find yourself owing a whopper at tax time. For this coming year, take a good look at your W-4 and figure out if you should make any changes.

This year, boost your saving for retirement by 1% of your salary—and boost it another 1% next year.

Endless rounds of golf and early-bird specials may seem far away, but paying for your golden age needs to happen now. And the sooner you start, the better: If you begin saving in your 20s, you’ll need to save 10–15% of your annual salary to have enough to retire in your 60s. Wait until you hit 30 to start saving? You’ll need to put away 15–25%. A good goal: Increase what you save by 1% of your salary every year. Because the more you save now, the less you’ll need to work later.

A second job can help make ends meet, but first weigh the pros and cons.

Moonlighting has become the new normal for a growing number of employees. But before you add another day's work to your 9-5 routine, make sure it's really your best option. Get clear about why you're looking for a second job—if it's just for the cash, consider asking your current employer about taking extra shifts or responsibilities. If you're looking for new experiences or considering a career transition, look at finding short-term work—it might be easier to avoid job burnout. But before you do anything, make sure that doing outside work won't endanger your primary position—and that there isn't a conflict of interest.

Build up enough savings to float your new business through the first year or two.

It might seem like common sense, but before you launch a new business, make sure you have money in the bank. Don't count on personal or bank loans to see you through—most new businesses don't start turning a profit for months, or even years, and you'll need to start payments as soon as possible. Instead of finding yourself in the position of shifting debt by using credit cards or HELOCs to pay off loans, take the time you need upfront to build out your savings, so you can start your business on solid ground.

Donating to a great cause? See if your employer offers a match

Whatever your charity of choice, it can almost certainly use every donation it can get. Make your contributions go further by inquiring about a possible employer match. Many employers offer charitable matching gifts or volunteer programs as part of their benefits package.

Take advantage of all your employee financial benefits

Financial planners can give you a holistic financial picture and help you get on track toward meeting multiple goals. And some employers offer fee reduction on financial planning services as a part of employee benefits packages. Whether you're starting a new job or simply haven't reviewed your benefits in a while, carefully go over your package to make sure you're not missing a valuable perk.

Looking into a business loan? Make sure you get the details.

Starting a small business is exciting. But before you sign for a loan, consider getting in touch with an accountant or attorney to ensure you're getting the best terms for your situation. Also ask if you qualify for tax benefits that could offset costs.

Self-employed? Deduct your home office expenses.

If you work for yourself, you're entitled to a business deduction for the expenses it takes to keep your workspace running. Be sure to track all the expenses associated with maintaining your home office. These can include utilities, equipment such as computers used exclusively or nearly exclusively for business, some furniture, and more. Check the IRS home office deduction guidelines for a complete list of what qualifies.

Saying "I love you" doesn’t mean you have to spend a lot of money. Make frugal the new romantic.

Dates don’t always have to involve fancy restaurants—there’s no shame in cuddling on the couch and watching three consecutive episodes of The Wire. Or hitting up a happy hour for food and drink on the cheap and then heading to a free concert. Other ideas: bowling night, a hike, an art gallery crawl, a home-cooked soup and a cheap bottle of red. The possibilities are practically endless, and they don’t need to include a $22 entrée.

If you’re thinking about adding a pet to your household, make room in your budget for all of Rascal’s expenses.

According to the ASPCA, basic care for a canine pal can cost you $580–$875 annually. But it’s not just dogs. Cats have an annual cost of about $670, and even a hamster will set you back $300 per year. Pet ownership is kind of like parenthood—it's a major lifestyle change that comes with years of responsibility. Worth it? Sure. Just make sure there’s room in your budget before you head to the animal shelter—it’s much harder to say no once you get there.

Keep your love life happy—have the who-pays-for-what talk tonight.

Splitting up the bills may not be the best date-night activity, but if you’re considering living together, you need to address who will pay for what. Details like how to split rent and utility bills can strain any relationship. Making sure you’re both clear now on shared expenses can save you headaches and conflict later.

Got financial skeletons in your closet? Don’t wait for your honeymoon to break the news. Have the money talk before you get married.

You’ve made time to pick wedding colors and cake flavors, so we know you can make time to talk finances, too. Sit down with your sweetie before the big day and fess up to individual credit histories, assets, and debt levels. Discuss your financial goals and create a plan to get there: Decide on a budget, which accounts you’ll hold jointly (and which you’ll keep separate), and who will pay the monthly bills. Then make a solemn vow to talk regularly about your finances.

It’s never too early to start saving for your baby’s college years.

You may be focused on finding the best preschool, but one day your little one will head off to college—and saving now can help her get there. A 529 college savings plan or an educational savings account (ESA—also known as a Coverdell account) both offer tax-deferred growth. As long as the money is used for qualified education expenses (like tuition, books, computers, and room and board), the money can be withdrawn tax-free. And because the money will count as your assets, not your child’s, it’ll have less impact on her ability to qualify for financial aid. The earlier you start saving, the better—she’ll be out of diapers and off to prom before you know it.

Getting hitched? Before combining your finances, weigh the pros and cons of shared vs. separate bank accounts.

You’ve promised "to have and to hold"—but does that also mean a joint bank account? Joint accounts can encourage you and your partner to talk about your financial goals and work together to achieve them. Of course, the drawback is that there’s no spending privacy. With separate accounts you gain independence—making it easier to surprise your honey with a slick new gadget—but you’re also likely to spend a lot of time deciding who pays for what. Some people prefer a hybrid option: using a joint account for shared expenses and separate ones for personal spending.

If you don’t have a mother-in-law begging to watch the baby, get creative to save a little on childcare.

See if you can cut back on childcare expenses by tapping in to local parenting networks to find a playgroup near you. And depending on where you live, you may be able to join an organized babysitting co-op, which allows you to accrue babysitting credits in exchange for watching other members’ kids. Sharing a nanny with another family may also be an option. And consider talking to your employer about tweaking your hours—if you can start work earlier, you may be able to better match your schedule to your partner’s time off or your kid’s daycare hours, reducing the need for a babysitter.

Ask your parents about their end-of-life wishes. It’s not a fun topic, but it’s important.

Having the talk with your parents won’t be easy, but it’s better to do it than to assume your parents have all of their affairs in order. Ask them about their overall financial picture (income, assets, and expenses) and where their accounts and official documents are held. Find out whether they’ve granted power of attorney to someone to manage their finances and health care. And make sure they have a properly executed will and a plan for later-life care, including a living will (which covers wishes regarding resuscitation in case of a medical emergency).

New baby = endless new ways to spend money. Keep yourself in check—try hand-me-downs instead.

We get it—now that you’ve got a baby, you’ve developed an obsession with adorable onesies, booties, and mini basketball jerseys. But the splurges add up even faster than your baby will grow out of those tiny clothes. Hand-me-downs and secondhand apparel can save you a bundle—this goes for items like toys and books as well, which are expensive to buy new and are often age-appropriate for all of six months.

Obsessively using hand sanitizer doesn’t count as health insurance. Get real coverage—affordable options are out there.

We know, we know: You’re healthy, so you don’t need health insurance, right? But a trip to the emergency room can wreak havoc on your finances—more than 60% of bankruptcies in the U.S. are caused by medical bills. If you can’t get health insurance through your employer, consider a short-term health plan or high-deductible individual insurance. Some basic health plans can run as low as $50 to $60 a month.

You save, your spouse spends—how do you compromise on finances?

No single tactic is going to work for every couple. Some hold completely separate accounts, others set monthly meetings to review their budget. But the first step should always be the same—talk it out. Figure out your individual and shared financial goals, discuss what drives your financial behaviors, and move on from there. Ultimately, you may benefit from meeting with a financial advisor to help create a workable plan.

When an elderly parent requires care, get the whole family on the same page

If your parent needs medical, financial, or living assistance, get the whole family on board. Talk to your siblings or other family members about sharing the personal and financial responsibility.

Don't put your own financial stability at risk to help your adult children

As a parent, you always want to be there for your kids—no matter how old they are. But if you find yourself constantly funding or bailing your adult children out of financial difficulties, you may be jeopardizing your own retirement. Think of it as the financial version of the airplane emergency policy—be sure your own oxygen mask is secure before you take care of those around you.

Set a savings goal—then put it on autopilot.

Whether you’re saving for a Wii, a backpacking trip in the Andes, or a car that starts every time, determine the dollar amount you need and break that into doable monthly chunks. Then put it on autopilot—for instance, set up your checking account so a chunk goes directly into your savings every month. It’s like cruise control for your bank account.

Create savings buckets for your various goals. It might help you stay on target.

If you’re saving up for multiple goals, consider setting up different accounts for each one (or using a bank that lets you put your savings into subaccounts) instead of lumping everything together. Being able to see the amounts you’ve saved for each goal may help you more easily track your progress, and prevent you from dipping in for other expenses. This setup doesn’t work for everyone, though. One consolidated account is often better if you’d rather streamline the process of managing your money—and it could earn more interest in the long run.

Writing down your financial goals is a great way to help you reach them, but telling a friend is even better.

Dreaming of a 2-week safari, but can’t seem to save for it? Putting pen to paper forces you to think through—and commit to—the things you want to accomplish. To help you make daily progress, break your goals down into lists of the specific steps you need to take. Then, because nothing works better than peer pressure, take your commitment a step further by sharing your goals with others—and updating them on your progress. It seems cheesy, but the extra accountability has been shown to make a real difference when it comes to reaching goals.

Getting a bonus this year? Step away from those plasma TVs.

Your bonus is your money, and you worked hard to earn it. But before you blow it all on a new TV or a weekend in Vegas, consider some more fiscally responsible alternatives. If you haven’t already captured all of your employer’s matching contribution to your retirement plan, consider putting your bonus money toward that. Or, use it to pay off debt, starting with any that’s high-interest or isn’t tax deductible. But it shouldn’t be all business—reward yourself by putting a small portion into savings so you can buy that giant flat screen in a few months.

If you’re thinking about investing, don’t put your nest egg in one basket. Spread the wealth instead.

There’s always risk involved in investing, but spreading your wealth around (aka diversification) can help protect you if one of your investments tanks. Unless you’ve got a ton of cash to start with, stick to no-fee diversified funds. You don’t want too big of a chunk of your money riding on a company that posts a first-quarter loss greater than the GDP of a small country.

Wondering where to put your savings? Depends on how soon you’ll need to dip into it. Start by figuring out how long it will take you to reach your goal.

Despite what your crazy old uncle might tell you, there is a better way to save money than hiding it under your mattress. If you’re saving up to buy something in less than five years, put your cash somewhere safe, like a savings account, CD, or money market account. If you’re ready to put money away for your golden years, think about investing in the stock market or opening up a Roth IRA.

It’s never too early to start saving for your baby’s college years.

You may be focused on finding the best preschool, but one day your little one will head off to college—and saving now can help her get there. A 529 college savings plan or an educational savings account (ESA—also known as a Coverdell account) both offer tax-deferred growth. As long as the money is used for qualified education expenses (like tuition, books, computers, and room and board), the money can be withdrawn tax-free. And because the money will count as your assets, not your child’s, it’ll have less impact on her ability to qualify for financial aid. The earlier you start saving, the better—she’ll be out of diapers and off to prom before you know it.

Start your financial life on the right foot

You might be new to living "on your own," but it's never too early to start creating your ideal financial future. Three easy rules to help you on your way: Start saving for retirement now even though that seems like a world away, never fall behind in paying your student loans, and avoid racking up credit card debt.

Create a game plan for your holiday gift giving

Whether you line up at daybreak for Black Friday deals or spend weeks searching for the perfect gift, make a plan and stick to it.

Just say no to charging less than $10. Carrying cash may actually help you to spend less.

Nowadays even the taco truck takes plastic. Problem is, credit cards make it even easier to spend money without thinking about it. One study even found that people paying with credit were willing to spend twice as much on Boston Celtics tickets. This week: Try carrying a set amount of cash each day, and when you spend it, it’s gone. It’s just not worth adding to your credit card balance for something less than 10 bucks.

Avoid making purchases—or any money decision, for that matter—when you’re tired, hungry, or mentally worn out.

Studies have shown that we lose willpower when we’re hungry, tired, or faced with too many decisions, no matter how trivial. We simply cannot sustain our good judgment for too many hours without a break. So if your blood sugar is low or you’ve just faced a series of mentally exhausting tasks, you’re more likely to hit "buy now" on those concert tickets you can’t afford. Next time, instead of making the purchase, get up, walk around, eat a healthy snack—and then decide if the front row is really worth it.

Go plastic-free for one week.

Here’s one way to cut back on spending: Kick it old school for a week and leave your plastic at home—credit and debit. Go to your bank today and withdraw the amount of cash you think you’ll need to cover your expenses for the next seven days. A set limit on your spending can make you think twice about making that purchase you "can’t live without".

ATMs can take a bite out of your wallet. Approach with caution.

You know that ATM in the back of the cash-only pizza joint? The one that charges $3 to dispense a twenty? Stay away. On top of the crazy high ATM fee, you may also be paying your bank a few bucks for using another institution’s machine. Another way to put money in your pocket: Get cash back by making a small purchase at a grocery store with your debit card.

Tuesday night takeout is easy and convenient—but it’s not always cheap. This week, cook an extra meal or two at home.

Yeah, yeah—we’ve heard it before: By the time you buy all the ingredients you need for that General Tso’s chicken recipe, it would’ve been cheaper to just order takeout. But that’s only true if you pick a recipe that calls for specialty ingredients that you’ll never use again—or if you buy eight pounds of cabbage and the leftovers grow mold in your crisper drawer. Stick to simple meals with ingredients you’ll use before they go bad.

What do you pay for cable and Internet? Try to negotiate a lower rate.

The never-ending competition between cable and DSL can work in your favor. Use a competing provider’s promotional rate as leverage to lower your own—or heck, just switch to the competition. Bundling services can also save you some cash.

Take a week off from spending. Think of it as a vacation for your debit card.

One way to rein in overspending is to, well, stop spending altogether. Going on a weeklong cash-fast is a good way to remind yourself that you are in control of your budget. Pay for what you have to, of course: bills, groceries, rent, etc. But as for everything else? Look for free alternatives, or just say no. When you go back to spending, you may find it easier to pass on whipping out the credit card for that [insert your weakness here] you don’t really need.

Are you paying for unused minutes? Call your cell phone provider to see if there’s a better plan for you.

The cell phone plan you signed up for a few years ago may not be the one that makes most sense for you today. If you text a lot more than you used to, you may be able to drop down to a plan with fewer minutes. And if you’ve got a smartphone, check your usage to make sure you really need the unlimited data plan—you may be able to switch to a lower allowance and save some cash.

Getting a bonus this year? Step away from those plasma TVs.

Your bonus is your money, and you worked hard to earn it. But before you blow it all on a new TV or a weekend in Vegas, consider some more fiscally responsible alternatives. If you haven’t already captured all of your employer’s matching contribution to your retirement plan, consider putting your bonus money toward that. Or, use it to pay off debt, starting with any that’s high-interest or isn’t tax deductible. But it shouldn’t be all business—reward yourself by putting a small portion into savings so you can buy that giant flat screen in a few months.

Free trials don’t last forever. Make sure you’re not paying $10 a month for a subscription you forgot about.

We’ve all been tempted by the lure of a free trial subscription. Just remember that many free or reduced-rate trials are set to automatically renew at the regular rate—and some may even lock you into paying in advance for the year. Same goes for that free month at the gym or the promotional rate on that premium cable channel. Don’t get stuck with a bill you don’t want. Set a reminder for the end of the free trial period. Then, if you really want to renew, go for it—at least it’ll be on your terms.

This weekend, have a night on the town without suffering a financial hangover. Leave your credit card at home.

Carry cash instead of a card when you go out with friends. You might not have enough money left to order those cheese fries at closing time, but you won’t add to your credit card debt either. Unless you pay your bill in full every month, save yourself the interest by ditching the plastic. Debit’s OK, too, as long as that basket of fries won’t put you in the red.

Saying "I love you" doesn’t mean you have to spend a lot of money. Make frugal the new romantic.

Dates don’t always have to involve fancy restaurants—there’s no shame in cuddling on the couch and watching three consecutive episodes of The Wire. Or hitting up a happy hour for food and drink on the cheap and then heading to a free concert. Other ideas: bowling night, a hike, an art gallery crawl, a home-cooked soup and a cheap bottle of red. The possibilities are practically endless, and they don’t need to include a $22 entrée.


Charities need help year-round, not just at the holidays. Try to work a small donation into your monthly budget.

On average, Americans give 3.2% of their income to charity. That may not seem like much, but it can feel like a lot when you factor in your expenses. Determine what you feel comfortable giving, and work it into your monthly budget for this coming year. If you can’t find a way to fit in a monetary donation, volunteer instead. Time really is money—and most charities need as much as they can get.

Before you donate, get the facts so you know where your money is going.

Find out where your money is going before you donate to a charity you’ve never heard of. Confirm the organization’s 501(c)(3) status and try to determine how much of your donation will go to program services versus administration and fundraising (sites like charitywatch.org and charitynavigator.org can help you with this). General rule of thumb: Steer clear of organizations that spend less than 60% of their cash on directly serving their cause. This is not to say that charities asking you for money on the street corner are not trustworthy—it’s just important for you to understand exactly what your $10 pays for.

Don’t be a Scrooge. Give what you can to charity, whether it’s time or money—or both.

You don’t have to be a zillionaire to donate to charities—for many, even a $10 donation helps. But there are many other valuable ways to give back: Sort and wrap toys for a holiday drive, donate blood, or mentor a student, to name a few. Or, gather up those winter clothes that don’t fit anymore and bring them to an organization collecting warm gear. Trust us, if you didn’t wear that sweater last year, you probably won’t wear it now.

Don’t let guilt put you on the spot. Donate only to the causes that mean the most to you.

It’d be awesome if you could buy a whole table at your friend’s charity dinner, or chip in for every 5K fundraiser. But when you don’t have an endless supply of cash, giving out of guilt can mean you have less for an organization you’re really passionate about. Create a charitable giving budget for the year, and once you’ve hit your limit, don’t feel guilty about saying no. Giving back to your community is important, but when resources are tight, you can only give so much.

Donate! You'll feel great—and you may even get a tax write-off.

A tax-exempt donation is a charitable gift you can claim as a tax write-off. It can be anything from used clothes to Goodwill, to a cash donation to a charity or organization with 501(c)(3) status, as long as you follow a few simple rules. First, when donating money or property, be sure to get a receipt detailing the name of the recipient, the date, and the value of the donation. To write off donations, make sure their total exceeds your standard IRS deduction for the year, and use the Schedule A form to save money on your tax return. For more information on which contributions are tax deductible and which aren't, check out these tips from Carrie Schwab Pomerantz.

Consider donating appreciated assets

If you are thinking about making a substantial contribution to a charity or organization, consider donating appreciated stock from your investment portfolio instead of cash. If you donate appreciated stock that you've owned for more than a year, you'll not only avoid paying capital gains taxes but also be able to deduct the fair market value. And, of course, the organization benefits from having the full current value of the stock.

Do your research before donating

It's good practice to thoroughly research a charity before making a donation. Think of your donation as an investment. Find out what impact your money can have on the organization's cause, and evaluate how efficiently the organization operates. It's all part of being smart while doing good.

Donate your time instead of, or in addition to, your money

Nonprofits depend on volunteers as well as dollars to accomplish their goals. And if you really want to learn about an organization, there is no better way than by spending your time with its staff and clientele. Volunteermatch.org is a great place to find organizations that will welcome your very personal contribution.

"Voluntourism" can do a lot of good—just be sure to vet your program

You can see the world and give back at the same time. Just make sure that the organization you select engages in practices that directly benefit the host community in every way possible. For example, rather than bringing in school supplies from overseas, some organizations purchase supplies from local vendors, which benefits both the schools and the local economy.

Donating to a great cause? See if your employer offers a match

Whatever your charity of choice, it can almost certainly use every donation it can get. Make your contributions go further by inquiring about a possible employer match. Many employers offer charitable matching gifts or volunteer programs as part of their benefits package.


Don’t get stuck with the bill—make sure your car insurance gives you enough coverage.

Even that clunker you inherited from your grandfather needs plenty of insurance. State-mandated premiums often aren’t enough, especially if you hit an expensive car—or, worse—seriously hurt someone. Think about upping your liability coverage, which covers bodily injury and property damage to others. It may mean more out of your pocket every month, but it’s way better than having to foot the bill for totaling a Benz.

Tired of that 5th-floor walk-up? If you’re thinking about buying a home, check your credit report.

Getting a mortgage these days isn’t easy, and lenders have access to information that you’d rather forget—like that irksome hospital bill that went to collections. If you haven’t run your credit report in the past year, start by visiting annualcreditreport.com and making sure there aren’t any surprises.

Give car-free living a serious look—if you can swing it, you can end up saving a lot.

If you’re looking to cut back on expenses, explore your options for going car-free, especially if you live in a community with reliable public transit. Compare the cost of a monthly public-transit pass to what you spend on gas, insurance, and car payments—chances are, it’s cheaper to take the bus. And car-sharing companies (now in many U.S. cities) offer short-term access to wheels for about $8 an hour. Plus, several new social networking sites make carpooling a more viable alternative. And if bike commuting is an option, heck, you might even be able to give up that costly gym membership.

Take some of the uncertainty out of saving for your first home—calculate how much dough you’ll need.

Fed up with your crazy landlord? Use an online mortgage calculator to see if buying is an option. Get a sense of your price range and figure out how much you’ll need for a down payment. Many conventional loans require you to put down at least 20% of the home’s value, but some—such as an FHA loan—may ask for as little as 3.5%. (The less you put down, the bigger your monthly payments will be, so you may want to keep saving until you have 20%.) Once you know how much you’ll need, break it into a monthly goal. For example, to save $15,000 to buy a home in five years, you’ll need to put away about $250 each month.

If you’re buying a car, be sure to think beyond the sticker price. Add up all the costs of keeping it running.

Need a new set of wheels? Remember to factor in the costs that go beyond your car payment—insurance, registration, maintenance, repairs, and gas. Consider buying a more economical car and putting the money you save on payments into a savings account. You’ll be thankful for your nest egg later when it’s time for new tires.

Your landlord’s property insurance only covers damage to your apartment—not your stuff. Think about getting renters insurance.

If someone breaks into your apartment and steals your valuables, can you afford to replace them? Or, worse—could you live without your laptop? If the answer is no, consider renters insurance. For about $25 a month, you can get up to $25,000 of coverage in case of vandalism, fires, and theft—even if your laptop gets stolen at the coffee shop.

If you’re thinking about buying a house, remember to calculate all of the expenses associated with it.

When it comes to figuring out whether you can afford to buy your first house, there’s more to consider than the cost of the mortgage. There are also property taxes, home insurance, and possibly home owners association dues—all of which can add up fast. And if the furnace goes out, you won’t have a landlord to call to replace it. On the plus side, you can usually deduct mortgage interest payments and property taxes on your tax return—which can turn into a nice refund.

Get a car loan before you start haggling over the price of your new ride.

Get preapproved for a loan before you start looking for a new car—regardless of whether you’re buying it off the lot or from some dude on Craigslist. Knowing exactly how much you can spend helps you negotiate a better price. Start by visiting your bank’s website to get a quote and then check other banks and credit unions to find the best rate. Avoid dealership financing, which tends not to be a deal at all.

If you’re not able to buy a house yet, don’t despair. Not owning a house can be pretty great, too.

Common wisdom tells us that we should all strive to become homeowners, but there are some awesome perks to renting, too. As a renter, it’s a lot easier to pull up roots and accept a sweet job offer in a faraway city, and you won’t have to waste your weekends pulling up weeds and installing gutter guards. Even better, you’re not on the hook for a new $500 water heater when the old one suddenly goes kaput. Research has also shown that homeowners aren’t necessarily happier than renters—in fact, they’re often more stressed out. So if you’re a renter, you should be feeling pretty good right now.

Buy a house only if you plan to stay there a while

Buying into the housing market when rates are low can be a great opportunity—but mainly if you're in it for the long-term. Ask yourself if you plan to stay in a home for a minimum of five years before you commit. And make sure that you're ready both practically and emotionally to take on this financial responsibility.

Are your property taxes too high?

In general, the property tax you're charged is a percentage of your home's assessed value. However, if that assessment doesn't accurately reflect today's market, you could be overpaying. The first step in finding out if you can lower your bill is to contact your county tax assessor.


Spring cleaning applies to your financial records, too—it’s a good time to deal with that overflowing pile of important documents.

When you get the itch to organize your closet in the spring, channel some of that energy to your financial records. That doesn’t mean you can dump everything into the shredder, though. Keep for seven years: W-2s, 1099s, tax returns, and receipts for anything you’ve deducted. Shred: all non-business-related receipts that you’ve stashed in your desk drawer, plus utility bills and monthly credit card statements.

Review your bills and statements for errors or charges that aren’t yours. It takes just a few seconds, and you never know what you could miss if you don’t.

Take a look at your bills and statements to make sure that you actually owe what they say you owe. Believe it or not, sometimes the companies that send you bills make mistakes. Moreover, an identity thief can use your credit or debit card without physically having it, so pay special attention to your card’s activity—it can be the fastest way to detect an identity breach.

Don’t delay the inevitable—open official-looking letters and bills ASAP.

Yes, snail mail is a little outmoded, but most important and time-sensitive information still arrives in your physical mailbox—even if you pay all of your bills online. Think: collections notices, changes to an insurance policy, overdraft notices, or even that refund check you weren’t expecting. It can be tempting to recycle unopened mail or let it pile up on the counter, but it’s better to discover that your auto insurance has lapsed before you get into a fender bender.

Identity theft can cost victims thousands of dollars. Make sure your time online isn’t putting you at risk.

Are details like your birthday, address, and email visible to the public on the social networking sites you frequent? If so, strengthen your security settings or limit what you share. Remember: If you list your high school on your public Facebook profile, but your security question for your bank’s website is "Where did you go to high school?" you’re not exactly doing yourself any favors.

Don’t be afraid of your credit report—even if it brings up bad memories. Get yours this week. (It’s free.)

Bad credit can keep you from nabbing that perfect one-bedroom you found on Craigslist. It can also affect your ability to get a car loan, a mortgage—even a job. Knowing what’s on your report is the first step to fixing your credit. You can get your report for free once a year through annualcreditreport.com. It won’t give you your credit score, but if you’re dying to know what that is, you can get it for a small fee at myFICO.com.

You still owe the money even if the bill doesn’t make it to your mailbox. Be sure to officially change your address when you move.

Let’s face it—moving is a big pain. Don’t make it worse by missing bills and your favorite magazines. Before packing up, change your address with as many organizations as possible—like your bank, your cell phone carrier, the DMV, and insurance companies. Change your address at USPS.com, too, and they’ll forward your first-class mail for a limited time. This will save you a number of hassles once you’re settled—and help you make sure you don’t miss any of those treasured $10 birthday checks from Grandma.

Why should you pay money when you don’t have the money to pay? Say no to overdraft fees.

Thanks to new legislation, banks can now charge you overdraft fees only if you opt in to them. One word: don’t. Saying no means your debit card will be declined if you’ve got a negative balance—but we think that beats paying a $35 fee for overdrawing your account by a dollar.

Obsessively using hand sanitizer doesn’t count as health insurance. Get real coverage—affordable options are out there.

We know, we know: You’re healthy, so you don’t need health insurance, right? But a trip to the emergency room can wreak havoc on your finances—more than 60% of bankruptcies in the U.S. are caused by medical bills. If you can’t get health insurance through your employer, consider a short-term health plan or high-deductible individual insurance. Some basic health plans can run as low as $50 to $60 a month.

Want to keep track of your money? Your smartphone can help.

Staying on top of your personal finances can feel like a daunting task, but with the right technology, you can let your phone do a lot of the work. Look for apps that help you track spending, set goals, manage your accounts, create a budget, and watch your investments. You can even find apps that let you scan receipts and record mileage, which makes budgeting and tax time that much simpler.

Review and update your beneficiary forms regularly

If your life situation changes, your beneficiary designations may have to change as well. Should something happen to you, these designations on your retirement accounts or insurance policies will outweigh the directions in your will. Take some time this month to review your forms and make sure they're up to date.

If you have dependents, you should have a will

No one relishes the thought of drafting a will, but if you have minor children, a will is a must in order to designate a guardian. And realize that whenever it comes to estate planning, it's essential to consult with an experienced estate planning attorney—a will is not a DIY endeavor.


How much you need to save for retirement depends on how old you are when you start. Find out your target percentage.

Thanks to compound growth, your savings will build faster the longer it’s invested or sits in an interest-bearing account. The earlier you start saving for retirement, the less you’ll have to squirrel away in the long run. If you begin in your early 20s, you can put away about 10% of your annual salary each year and be on track for retirement. But wait to start saving until you’re 29 and you’ll have to put away at least 15% every year. First, find out how much of your salary you should save, and then set your contribution to your retirement plan to at least that amount.

You don’t need an employer-sponsored retirement plan to start saving for your future.

For all of you freelancers, hourly workers, and small business owners: You don’t need a 401(k) to have a tax-advantaged retirement plan. Anyone with an income (who hasn’t reached age 70½) can open a traditional IRA through a bank, brokerage, or fund company and begin investing money for their golden years. Each year, you can add earnings up to $5,000 (until you reach age 50, when that limit goes up to $6,000). If you’re self-employed or own a small business—consider a SIMPLE IRA, individual 401(k), or SEP-IRA.

Convince yourself that retirement funds are untouchable.

For most of us, an early withdrawal from our retirement savings is a bad idea. Kinda like eating those questionable week-old leftovers—there’s usually a price to pay. Outside of a few special cases, there’s a 10% penalty to partially or fully cash out a retirement account before you’re 59½. And unless you have a Roth IRA, these withdrawals are immediately subject to income tax, so you’ll be paying a lot up front. If you reallllllly need the funds and you have a 401(k) that allows it, you can consider taking out a penalty-free loan. But if you leave your current job, you’ll have to pay back the full amount or it’ll be subject to the 10% penalty—and you may be able to find a better rate on a conventional loan anyway.

You’re young. That’s a pretty good reason to open a Roth IRA.

There are two kinds of IRAs in this world: the kind that are tax-deferred and the kind that aren’t. A Roth IRA isn’t, which means you’ll pay taxes on money you contribute now, but not on your withdrawals when you retire. That’s a good thing if you’re just starting your career, because you’re more likely to retire at a higher tax bracket.

This year, boost your saving for retirement by 1% of your salary—and boost it another 1% next year.

Endless rounds of golf and early-bird specials may seem far away, but paying for your golden age needs to happen now. And the sooner you start, the better: If you begin saving in your 20s, you’ll need to save 10–15% of your annual salary to have enough to retire in your 60s. Wait until you hit 30 to start saving? You’ll need to put away 15–25%. A good goal: Increase what you save by 1% of your salary every year. Because the more you save now, the less you’ll need to work later.

Consider the pros and cons of long-term care insurance

Long-term care—help with the "activities of daily living" such as bathing, dressing, and eating—is not covered by Medicare or other health insurance. While an estimated 70% of people over age 65 will require this type of care at some point, only about 10% of the elderly are currently covered under a long-term care insurance policy, according to a 2013 report by the National Bureau of Economic Research. Both long-term care and long-term care insurance are quite costly, so examine your situation carefully, preferably with the help of an independent financial advisor. If you decide to purchase a policy, be sure to comparison shop and understand all of the fine print. In general, the most cost-effective time to purchase a policy is between the ages of 50 and 65.

Save for your kids' college without derailing your retirement

Of course you want to help your kids pay for school, but you need to keep your financial future intact at the same time. The key is to stay true to your retirement savings plan while taking advantage of tax-advantaged college savings options such as 529 plans and Coverdell accounts. By all means, help your children, but make sure that after graduation, they can feel confident that you‘ve taken care of them—and yourself.

Contribute to your 401(k) and an IRA 

Supplementing your workplace retirement account with an IRA can be a great way to boost your retirement savings. There are contribution limits and deductibility issues to consider, but you can potentially decrease your tax bill at the same time that you help strengthen your future.

Diversify your tax liability 

If you expect your income tax bracket to be lower when you eventually make withdrawals from your retirement account, a traditional, tax-deferred 401(k) or IRA might make the most sense. On the other hand, if you expect your bracket to be higher, a tax-free Roth might make the most sense. And if you’re not sure, why not hedge your bets by contributing to both? That way, you’ll have maximum flexibility come retirement.

Delay Social Security benefits—and reap the rewards 

Early retirement might sound appealing, but claiming your Social Security benefits before you need to might mean less money in the bank during your later years. If you are able to hold out on taking your Social Security benefits until age 70, you’ll collect a check that is 76% bigger than if you took it at 62.

Which comes first—student loan repayment or 401(k)? 

If you’re carrying a lot of student loan debt, it makes sense to want to pay it off as aggressively as possible. Realize, though, that student loans can be considered "good debt," in that they generally carry a low interest rate, the interest may be tax-deductible, and they won't be a ding on your credit rating. It's important to make your payments on time each month, but beyond that, don't let your repayment interfere with retirement savings.

Always contribute enough to your 401(k) to capture the maximum match 

If your employer matches a portion of your 401(k) contributions, do the math, and at a minimum contribute enough to capture the max. Otherwise, you're walking away from free money.

If you can’t make a student loan payment, take a deep breath and call your lender.

If you’re having trouble making payments, talk to your loan servicer—you may qualify to defer your loans if you’re unemployed, back in school, or facing economic hardship. With a subsidized Stafford or Perkins loan, you won’t accrue interest while you’re in deferment. If deferral’s not an option, ask about forbearance, where you make reduced payments for a period of time while accruing interest. No matter what you do, the important thing is to talk to your lender now, because once you go into default, many of these options will no longer be on the table.

Grad school is a big investment—make sure you consider your plan carefully.

In a tough job market, graduate school is an appealing option if you can’t find work with the degree you already have. But before you dive into the application process, make sure you know what you’re getting into. Is there demand in the marketplace for the degree you want? How much will it cost? And how much financial aid will you qualify for? The last thing you need is more debt than you can handle. Talk to folks in your field about how much their degree boosted their opportunities and earning potential. For certain careers, an advanced degree is a necessity—for others, it can be a financial burden that's worth thinking twice about.

Deduct your student loan interest. You deserve the break!

Paying for your education can really break the bank, but the good news is that you can deduct up to $2,500 in student loan interest from your taxes (assuming your modified adjusted gross income is less than $75,000 a year). Even better, you don’t have to itemize to get this deduction. Make sure you received Form 1098-E, which states how much you paid in interest last year, from your lender. Enter that number into the Adjustments to Income section of Form 1040 or 1040A. This lowers your adjusted gross income—which means your tax liability goes down.

Setting up your student loan payments to debit automatically can reduce how much you pay over time.

Student loans can be great … until it’s time to pay them back. Luckily, many lenders offer an interest rate reduction if you sign up for automatic debit payments. It’s usually 0.25–0.5%, which can save you a couple thousand dollars over time, depending on your loan amount and interest rate. Plus, auto-debit helps you keep your payments on schedule, which can lead to an additional rate cut down the line. Just make sure you always have enough money to cover the debit—one bounced payment and you may lose the reduced rate.

Keep it together—consider student loan consolidation.

Paying off multiple student loans can be a major hassle. Consolidating lets you roll them all up into one and lock in a fixed rate. You can also extend the payoff period to lower your monthly payments. That said, this usually only makes sense if you can lower your rate and save money. If you’re almost paid off, it’s probably not worth it. And look closely at the terms: Private consolidation loans can come with fees and variable rates. Federal consolidation loans, on the other hand, have no fees or prepayment penalties, and are covered by terms set by federal law.

Watch out for financial aid and scholarship scams. Hint: You should never have to pay money to get money.

Figuring out how to finance college can be confusing enough, without having to worry about scholarship fraud. But hundreds of thousands of students and parents collectively lose more than $100 million to these types of scams annually, according to FinAid.org. Rule of thumb? If it sounds too good to be true it probably is. No legitimate service can guarantee a scholarship to students, and you should almost never be asked to pay any more for your application than the price of postage. Luckily, there are a lot of resources available to help you verify offers. Start with the Better Business Bureau, the Federal Trade Commission, and the National Consumer Leagues Fraud Center.

If your income level changes, maybe your loan repayment plan should too.

When you land a raise or a higher paying job, take a minute to revel—then consider contacting your lender and switching your student loan repayment to account for that additional money. A Standard repayment plan is made up of level monthly payments over the shortest amount of time so you pay less in the end. On the flip side, if your income has decreased for any reason, an income-sensitive option can lower your monthly payment to reflect that change. You’ll pay more interest over time, but it can ease the burden during the tough time and give you peace of mind.

Don’t wait until the last second to file your taxes. The earlier you get started, the better.

Filing your taxes early instead of at the eleventh hour won’t save you any money, but it will prevent anxiety—and, if you’ve got a refund coming, you’ll get your money sooner. If you’re not ready to file, and you think you’re likely to owe, plan ahead and set some cash aside now. At the very least, make sure you have the paperwork you need to file.

Itemizing your deductions is worth it only when they’ll exceed the standard deduction. Otherwise, keep it simple.

There are people out there who meticulously keep receipts for every charitable donation and every paper clip purchased for their home office. But itemizing doesn’t make sense for everyone. A rule of thumb: If your donations, business expenses, and other deductions (not including student loan deductions) don’t add up to more than the standard deduction, itemizing won’t bring tax savings. In other words: If you don’t have much to deduct, don’t stress about tracking down that lost receipt—you don’t need it.

Deduct your student loan interest. You deserve the break!

Paying for your education can really break the bank, but the good news is that you can deduct up to $2,500 in student loan interest from your taxes (assuming your modified adjusted gross income is less than $75,000 a year). Even better, you don’t have to itemize to get this deduction. Make sure you received Form 1098-E, which states how much you paid in interest last year, from your lender. Enter that number into the Adjustments to Income section of Form 1040 or 1040A. This lowers your adjusted gross income—which means your tax liability goes down.

If you usually get a fat tax refund—or the other way around—it might be time to adjust your W-4.

It may feel like a win to get a $400 refund from the government every April, but it just means that you’re overpaying to begin with. Withholding less from your paycheck will give you extra cash on payday. On the other hand, if you withhold too little, you could find yourself owing a whopper at tax time. For this coming year, take a good look at your W-4 and figure out if you should make any changes.

Lower your tax bill—with a little help from your 401(k).

Saving for retirement isn’t just about planning for your future—it can also help you at tax time. Reduce your tax bill by putting aside some money in your 401(k)—and that can translate to a bigger refund. What’s more, if your employer offers a matching contribution, contribute at least enough to get the full match. Otherwise, you’re basically turning down free money.

Spring cleaning applies to your financial records, too—it’s a good time to deal with that overflowing pile of important documents.

When you get the itch to organize your closet in the spring, channel some of that energy to your financial records. That doesn’t mean you can dump everything into the shredder, though. Keep for seven years: W-2s, 1099s, tax returns, and receipts for anything you’ve deducted. Shred: all non-business-related receipts that you’ve stashed in your desk drawer, plus utility bills and monthly credit card statements.

Moving for a new job? Those expenses might be deductible.

Moving, even for a great new job, can be a pain. But, depending on your situation, you might be able to deduct some of the costs of moving on your tax return. These can include gas mileage, U-Hauls, storage, and hotel costs. To be eligible to claim, you need to work full-time for at least 39 weeks in the 12 months after your move—and your new job has to be more than 50 miles from your old home. Just remember to track your expenses.

A new baby is great news—for you and your tax bill!

The first time you look at your little one, taxes are probably the last thing on your mind. But children do give you certain tax benefits that you'll want to take advantage of. The first step is getting your newborn a social security number—it's required if you're planning to claim her as a dependent. Then, when tax time rolls around, look at claiming the Child Tax Credit—up to $1,000. Single parents may also qualify as "head of household", which can mean a larger standard deduction. You should also check to see if you qualify for any additional deductions or credits, such as childcare, or the Adoption Credit if you adopted.

If you really can't pay your taxes, talk to a tax advisor and file anyway.

While the IRS encourages you to pay your taxes any way you can—whether that means credit cards, or other lines of credit—sometimes even that's not a viable option. So what happens if you truly can't pay? Because everyone's situation is different, be sure to talk with a tax advisor about your options—which might include arranging an installment plan. Free tax help is available through the IRS at www.irs.gov, and many communities offer in-person tax assistance through Volunteer Income Tax Assistance (VITA). (Call 800-906-9887 for VITA site locations.) But whatever you choose to do, you absolutely must still file your return. No exceptions. If not, you'll only be adding a hefty penalty on top of your outstanding payment.


 

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The information on this website is for educational purposes only. It is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager.