Friday, October 22News That Matters

Tag: Personal Finances

The True Cost of Upgrading Your Phone

Technology
Let’s talk about buying an iPhone for $1,000. Tim Cook, Apple’s chief executive, once compared this eye-popping price tag to buying a cup of coffee a day over a year. No big deal, right?But financial advisers see this differently. By some estimates, an investment of $1,000 in a retirement account today would balloon to about $17,000 in 30 years.In other words, $700 to $1,000 — the price range of modern smartphones — is a big purchase. Fewer than half of American adults have enough savings set aside to cover three months of emergency expenses, according to the Pew Research Center. Yet one in five people surveyed by the financial website WalletHub thought a new phone was worth going into debt for.Tech companies fairly argue that our smartphones are our most powerful tools for work and play a...
F.S.A. Limits in 2022: You May Be Able to Carry Over More Money

F.S.A. Limits in 2022: You May Be Able to Carry Over More Money

Business
With annual open enrollment underway at many employers, workers should log on to their accounts or check with their employer to see how much money is available and decide whether to tweak their paycheck deductions for next year, Ms. Myers said.“Employees need to know their balances,” she said.Employers have generally said they are seeking to hold the line on increases in health insurance costs for employees next year, given a challenging job market because of the pandemic.The average employee contribution to an F.S.A. was just under $1,200 in 2019, according to the Employee Benefit Research Institute, which also found that nearly half of participants have forfeited all or part of their contributions. The median amount lost was $157. But because paycheck deductions are made pretax, employee...

They Want to Hand Your Kid a Debit Card. What Do You Do?

Business
Then, a few basics. If you’re seeking regular allowance distribution and management, most services can handle that. But if you’re paying your children for chores and want to check tasks off on a line-item basis before pushing money onto a kid’s card, that’s a feature that you should select for specifically. Gohenry does this, and FamZoo helped pioneer it.Also, what financial behaviors do you wish to encourage — or change? Many parents like to reward savings with automatic interest-rate boosts or goal-based bonuses. “That allows parents to exaggerate the point to make the point,” said Tim Sheehan, Greenlight’s co-founder. So check for that feature if it’s important to you. Greenlight offers it, and FamZoo has a strong offering, too.Then, there’s the goal of overarching financial literacy. T...
You Can Get Your Credit Score, but You May Have to Pay for It

You Can Get Your Credit Score, but You May Have to Pay for It

Business
A Consumer Financial Protection Bureau study in 2012 found that most consumers who scored well under one scoring model generally scored well on other models. But a “substantial minority” could see large variations, it said, so consumers “should avoid relying on scores they purchase as the sole basis for assessing their creditworthiness when making important decisions about obtaining credit.”The Consumer Reports review examined the five most popular credit scoring apps according to download data. In addition to apps offered by Experian and TransUnion, the report considered apps from Credit Karma, Credit Sesame, and myFICO. (An offering from Equifax didn’t meet the study criteria, Consumer Reports said.) Researchers downloaded the apps early this year, and rechecked them in the spring.Update...
Robinhood Hits College Campuses, Where Credit Card Companies Fear to Tread

Robinhood Hits College Campuses, Where Credit Card Companies Fear to Tread

Business
Robinhood, the free stock-trading app with 21 million active users and counting, is about to hit the road for a college coffeehouse tour to drum up new customers.Now where have we heard this one before? Ah, yes, the credit card industry.The campus antics that the card companies got up to two decades ago were so egregious that they helped lead to a 2009 federal law that made it harder for anyone under 21 to get their products in the first place.There are some important differences. Credit card issuers can put marks on your record that can keep you from qualifying for an apartment or other services years later. Robinhood is handing out a mere $15 to give each student a taste of investing.But here’s what they have in common: Both products are habit-forming, and if you get in over your head, t...

Proposed Tax Changes Focus on the Wealthy

Business
So how do you define who’s wealthy?The latest proposed tax changes from the House Ways and Means Committee essentially say a wealthy individual is someone who earns $400,000 a year or a couple with $450,000 in annual income.“Rich is just the term we use to describe people who have more than us when we don’t think they deserve it,” said Brad Klontz, a financial psychologist in Boulder, Colo. “The definition of rich is entirely subjective,” adding that “$400,000 is just an arbitrary number — it might make you ‘rich’ in Middle America but middle class on the coasts.”Four years ago, when the last changes to the Internal Revenue Code were made, the emphasis was on a lower tax rate for corporations and for super-wealthy individuals, particularly those who owned real estate and could profit from ...
FAFSA Changes Are Coming. Here’s What You Need to Know.

FAFSA Changes Are Coming. Here’s What You Need to Know.

Business
(While there has not been a draft since 1973, men ages 18 to 25 are still required by federal law to register. But FAFSA applicants will now remain eligible for financial aid even if they have not registered, said Mark Kantrowitz, a financial-aid expert.)The FAFSA collects financial details about students and their families and acts as a portal to grants, scholarships and loans for higher education. Last year, Congress approved changes to the form and the financial aid process, trimming the number of questions by about two-thirds and tweaking its underlying formula for determining who receives aid.The approved changes include replacing the so-called “expected family contribution,” which applicants found confusing. Instead, a “student aid index” will be used as a guideline for the level of ...
$10 Billion in Student Loan Debt Erased Under Biden, but Calls Grow for More

$10 Billion in Student Loan Debt Erased Under Biden, but Calls Grow for More

Business
Finally, on Tuesday, an email arrived saying she had receive a 100 percent discharge.“I cried,” said Ms. King, who hopes she can now afford computer classes at her local community college.The department appeared to have notified thousands of people about their loan relief on Tuesday, Mr. Gokey said. But confusion remains: Multiple people received notifications with inaccurate information. One borrower who attended ITT, for example, got a letter saying his loans for studying at the Marinello School of Beauty would be eliminated.The push for widespread debt cancellation has overshadowed calls to mend these and other glaring administrative problems that urgently need to be addressed, advocates say — ideally before January, when borrowers will start getting bills again.“The next few weeks and ...
Your Finances Took a Hit From the Pandemic. Here’s What You Do Now.

Your Finances Took a Hit From the Pandemic. Here’s What You Do Now.

Business
As for that tax return, it never hurts to organize all the tax data you can during the last few months of the calendar year. It’s a record of your recent past and a window into your long-term future (say, via any notation about retirement savings). The process may also serve as a reminder that there is often at least one more thing you could do in the present to help yourself while handing less money over to various governmental bodies.Prepare yourself now and you can file as early as possible in 2022 and quickly get any refund you have coming. One note of caution: Donna Trainor, a financial planner and accountant in Atlanta who has done extensive pro bono work with people in danger of losing their homes, worries that recipients of the new, monthly tax credit payments don’t realize that it...
When to Collect Social Security: Why You Should Wait

When to Collect Social Security: Why You Should Wait

Business
Withheld benefits are not lost forever, however. At the beneficiary’s full retirement age, Social Security will adjust the monthly benefit upward to account for the withheld benefits. The beneficiary will continue to receive the higher payment even after she recoups the withheld benefits, which could take 12 years.This is how it works: Say a person is eligible for a benefit of $24,000 a year at full retirement age but claims at 62 and gets a reduced benefit of $16,800. If the beneficiary earns $25,000, the government will withhold $3,020 for the year, which is half of the earnings above the limit. At full retirement age, the beneficiary will continue to receive the reduced benefit of $16,800 but eventually will get the withheld money back in the former of a higher benefit.James Blair, the ...