Did you know that simple steps can improve your financial health?
Trying to keep up with all the interesting and valuable news articles that are available each day seems like a full-time job. To be helpful, we have curated a handful of recent news stories that you may have missed but could make your financial life a bit easier.
Obtain Free Weekly Credit Reports
As many Americans face financial hardship, the three main credit reporting bureaus─Experian, Equifax, and TransUnion─have stepped up to offer individuals free weekly credit reports. This snapshot of your creditworthiness allows lenders, such as credit card companies and car dealers, to determine if you are a reasonable risk, and what interest rate you should pay. You should review the information in these credit bureau reports to ensure everything is accurate and up-to-date. It also allows you to flag potential efforts to steal your identity, which can be a major pain to resolve if you fail to act quickly. To get these free credit reports, go to annualcreditreport.com. The free weekly credit reports are available through April of 2021.
Take Advantage of Record Low-Interest Rates on College Loans
As of July 1, the interest rate charged on federal student loans for undergraduates fell to a record low of 2.75% for the 2020-21 school year. That’s down from more than 4.5% a year ago. The rates on other types of college loans have declined as well, but they are not as low. On March 13, as a way of providing relief during the pandemic, interest on most federal student loans was waived, but that expires on September 30, unless Congress extends the temporary relief measure. Refinancing your existing loan now could result in a lower interest rate which can save you thousands of dollars over the life of the loan.
What to Do When Money Is Stuck in Your Dependent Care Account
Many employers offer plans that allow you to set aside pre-tax dollars from each paycheck to use later for childcare expenses. You may have contributed hundreds, even thousands of dollars earlier this year, but have not needed to use those funds because you’re working from home, daycare centers have been closed, and summer camp was canceled. Can you get that money back? No, but there’s still time to use it, and you should make sure that you’re not contributing any more money this year that you won’t be able to spend. Remember, this is a use-it-or-lose-it benefit. Some employers will give you a grace period of one to three months to use the money you’ve contributed. It’s also time to get creative. Remember that you can also use the funds for eldercare. And if your child is under the age of 12 and still schooling from home, you can hire helpers, even relatives, if you do it all above board and provide a reimbursement form with the Social Security number of your helpers.
The Bond Market Turtle Often Wins the Race
You know the parable about the turtle and the hare. The bond market is the slow and steady turtle, and the stock market is the hare. Over the past 20 years, U.S. Treasury bonds of 10 years maturity or more have returned about 8.3%, and long-term, investment-grade corporate issues have returned approximately 7.7%. Over the same period, the S&P 500 stock index, including reinvested dividends, has had an annual return of about 6%. The stock market has set many records over the past two decades, but it has also suffered three massive selloffs – when the tech bubble burst in 2000; in the 2007-09 Great Recession; and February and March of this year. Many investment advisors say the lesson to be learned is you need balance in your portfolio.
Avoid Overdraft Fees
When you opened your bank checking account, you were asked to opt-in or opt-out of overdraft service. Most people choose not to accept this option, but many do take it, seeing it as a way to borrow money when they are short of cash. However, that can be a costly option. Instead of rejecting your check for insufficient funds, the bank will make the payment but charge you a fee, usually $35. And it’s not a one-time fee. Each check that you write but cannot cover will incur the fee, and that can add up quickly. In fact, a consumer advocacy group, the Center for Responsible Lending, says big banks earned $11 billion in overdraft fees last year. You can opt-out of this service at any time, but if you choose to keep it, there are ways to reduce the fees, such as linking your checking account to a savings account or credit card. There may still be a fee, but it will be less than $35. During the current crisis, some banks have waived overdraft fees, but that’s not likely to last much longer. And if you are hit with a fee, it’s worth asking your bank to waive it. They may do that once, but not repeatedly.
Get A Record of Your Digital Self
You probably know that the goliath tech companies know a tremendous amount about you. The question is: do you know what they know about you? Well, you can find out by requesting a record of your digital profile from the Big Four – Facebook, Apple, Amazon, and Google. The information can include everything from your search history to the many advertisers that have your contact information, as well as old pictures of you and conversations with friends and family. Each company requires a different process, but you can make the request with just a few clicks.
Acting on any or all of these six tips can improve your financial health and provide you with peace of mind. Should you have any questions or need assistance in any of these areas, do not hesitate to contact an EKS Associates advisor.