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9 Ways to Get Free Tax Help From a Human Being

Tax help can cost a lot of money. Pros charge $150 an hour on average to do a federal and state return, according to the National Society of Accountants. Help with planning, back taxes or audits can cost even more. But there are a few ways to get human tax help for free.

» MORE: Looking for free tax software instead? We cover that here.

1. Volunteer Income Tax Assistance (VITA)

What it is: A federal grant program that helps community organizations provide free tax-prep services to low- and moderate-income individuals, the disabled, the elderly and limited-English speakers.

How it works: Taxpayers can get face-to-face help from local, IRS-certified volunteers. Generally, the income limit is $54,000. Volunteers won’t prepare the Schedule C (sorry, freelancers), the complex Schedule D (sorry, investors) or forms associated with nondeductible IRA contributions, investment income for minors, premium tax credits, requests for Social Security numbers or determinations of worker status.

“In a lot of communities, [people] can just dial 211 to find out information about the nearest VITA site and get more information about whether or not they qualify,” says Rebecca Thompson, project director of the taxpayer opportunity network at the Corporation for Enterprise Development, which focuses on fighting poverty.

Get help from the Volunteer Income Tax Assistance program.

2. Tax Counseling for the Elderly (TCE)

What it is: A federal grant program that gives money to community organizations to provide people with free tax help. Although the program was established to help people 60 and older, and still prioritizes serving them, there’s actually no minimum age requirement. Trained volunteers provide the assistance.

How it works: Similar to VITA, community organizations and nonprofits use the grant money to provide help. Most TCE sites are operated by the AARP Foundation’s Tax-Aide program.

“The TCE program and the VITA program use, as a base, the same training program [for volunteers]. They use the same certification test and, for the most part, the same software,” says Fran Rosebush, deputy director of the Corporation for Enterprise Development.

Get help from the Tax Counseling for the Elderly program.

3. AARP Tax Foundation

What it is: A nonprofit arm of AARP that operates the Tax-Aide network of tax preparation sites for the IRS’s VITA and TCE programs.

How it works: AARP’s Tax-Aide connects taxpayers with tax counselors who have advanced IRS training. It also operates an online FAQ page where you can submit tax questions to IRS-certified volunteers. You don’t need to be an AARP member to get help.

Get help from the AARP Tax Foundation.

4. IRS Taxpayer Advocate Service

What it is: An independent organization within the IRS that protects taxpayer rights.

How it works: You can turn to the Taxpayer Advocate Service if you’ve already tried to resolve your tax problem through normal IRS channels or you think an IRS process isn’t working the way it should. There’s at least one Taxpayer Advocate office in every state.

Get help from an IRS taxpayer advocate.

5. Low Income Taxpayer Clinics (LITCs)

What it is: A federal grant program that gives money to legal-aid and legal-services organizations to help low-income taxpayers or taxpayers who speak English as a second language. Law schools and business schools also are common providers. Some charge nominal fees.

“We don’t prepare tax returns, generally speaking, but if somebody, for example, has their refund frozen and they need help figuring out why, they can call low-income tax clinics,” says Christine Speidel, an attorney at Vermont Legal Aid, which runs clinics in the state.

How it works: The program generally provides representation for people in IRS disputes, including audits, appeals, collections and litigation. It also can help respond to IRS notices and fix account problems. Typically, the income ceiling is 250% of the federal poverty rate, but some programs have a little wiggle room, Speidel says. Sole proprietors are usually welcome, she adds.

Get help from the Low Income Taxpayer Clinic program.

6. IRS Taxpayer Assistance Centers

What it is: Local IRS offices across the country.

How it works: Services vary by office but can include basic tax-law assistance, payment arrangements, procedural inquiries, help with IRS letters and notices and other support. You’ll need to schedule an appointment and provide a valid photo ID and taxpayer identification number, such as your Social Security number.

Get help at an IRS Taxpayer Assistance Center.

7. Military OneSource

What it is: A Department of Defense program that provides financial and legal resources, among other things, to military members and their families. The tax program is called MilTax.

How it works: Trained MilTax consultants are available by phone seven days a week during tax season from 7 a.m. to 11 p.m. ET at 1-800-342-9647. After April 18, they’ll be available Monday through Friday, 8 a.m. to 10 p.m. ET. MilTax is part of the VITA program, which means you also can get face-to-face help on base or nearby.

Get help from Military OneSource.

8. The tax pro down the street

What it is: A certified public accountant, licensed attorney, enrolled agent or someone who has completed the IRS’ Annual Filing Season program. The IRS also requires anyone who prepares or helps prepare federal tax returns for compensation to have a Preparer Tax Identification Number, so be sure to look for that.

How it works: To get free help, all you might need to do is ask. According to the National Society of Accountants, 89% of tax pros offer free client consultations worth more than $100.

Seek help from a credentialed tax professional.

9. Your tax software

What it is: Many versions of do-it-yourself tax software come with free help from a tax pro via phone, chat, email or even face-to-face via your cell phone’s camera.

How it works: Tax software providers frequently offer free help, though it’s more common among the higher-end paid versions. Audit support and audit representation are often provided, though you might have to pay extra.

Where to find: Companies such as TurboTax, H&R Block, TaxAct and TaxSlayer offer free help for all or some of their tax software packages.

Tina Orem is a staff writer at NerdWallet, a personal finance website. Email: torem@nerdwallet.com.

This Student Loan Tip Saves You Money Year After Year

You don’t usually think of your student loan lender as a source to save you money. But by signing up for automatic payments today, you could land a discount and put money back in your pocket.

If you sign up for auto-debit, which most federal and private student-loan lenders offer, you’ll get a 0.25 percentage point reduction in your interest rate and have your bill amount drawn directly from your bank account every month. This nets you savings and prevents you from missing payments, as long as you ensure your bank account can handle the amount being removed.

And if you choose to invest those savings, you could grow your money even more.

Here’s what those savings might look like: A typical borrower who graduated in 2015 owes $30,100 in student loans, according to the Institute for College Access and Success. If this borrower had a 6% loan APR and that was reduced by 0.25 percentage point to 5.75%, she could save about $45 per year. Over the standard 10-year loan period, that would come to around $450 in savings.

Borrowers with higher loan balances stand to save even more. Graduate students, for example, have a median debt of $57,600, and 1 in 4 have debts of $99,614 or higher, according to New America, a public policy think tank. Those with lower balances won’t gain as much in savings, but they will earn a bit back plus the chance to set their payments and forget them.

Auto vs. manual payments Debt APR (with and without auto-pay) Monthly payment Total payment over 10 years Annual savings Savings over 10 years $10,000 6.00% $111 $13,322 -- -- $10,000 5.75% $110 $13,172 $15 $150 $30,100 6.00% $334 $40,101 -- -- $30,100 5.75% $330 $39,649 $45 $452 $75,000 6.00% $833 $99,918 -- -- $75,000 5.75% $823 $98,792 $113 $1,126 $100,000 6.00% $1,110 $133,225 -- -- $100,000 5.75% $1,098 $131,723 $150 $1,502

Note: The above APR reflects a sample interest rate that could be held by borrowers with federal or private loans; some amounts, such as monthly payment figures, have been rounded for use in this table.

If you’re thinking, “Forty-five bucks a year? Who cares?” consider what you could save — and make — by not paying that extra interest.

With an additional $45 per year you could:

  • Pad your Roth IRA. Say you make an initial deposit of $500, then contribute your $45 savings annually. At a 7% fixed rate of return, you could grow your balance to $1,679 in 10 years.
  • Pay off some high-interest debt faster, such as a credit card or personal loan.
  • Reduce your student loan principal by $45 by instructing your lender to apply the amount this way.
  • Donate to your favorite charity or political action organization and possibly get a tax break.
  • Add to your emergency savings to feel even more prepared for that “rainy day.”
Another interest-saving tactic

If you’re looking to shave even more off your interest rates, consider student loan refinancing, in which your current loans are replaced with a new, private loan that has a lower interest rate. Refinance lenders generally look for candidates with a steady income, good credit and a few years of work experience, or a co-signer with those qualifications. Use a refinancing calculator to see how much you might be able to save.

Private loan borrowers are the best candidates to lower their interest rate through refinancing, as they won’t give up certain protections and programs that federal loan borrowers have, such as income-driven repayment plans or federal student loan forgiveness.

Jennifer Wang, director of the Washington, D.C., office of the Institute for College Access and Success, cautions federal loan borrowers who are looking to lower their interest rate through refinancing. “[If] you don’t have the option of income-driven repayment, which private loans don’t, then anyone could struggle to repay their loans and it would be too late to revert back to a federal loan.”

If you’re looking to save money on your loan payments, enrolling in auto-pay is probably a no-brainer. Refinancing will require more consideration, including how the decision might affect you in the future when you might want those federal protections.

Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski

5 Overlooked Small-Business Tax Deductions for 2017

Failing to claim all the small-business tax deductions you’re entitled to is like flushing money down the toilet. Deductions are a legal way to reduce the amount of business income that is subject to tax.

Keeping good records is key to backing up the deductions, says Barbara Weltman, author of “J.K. Lasser’s Small Business Taxes 2017.”

“Keep receipts, invoices and other documentation,” she says. “If you don’t have the proof, you could be out of luck.”

You probably know that you can deduct salaries and wages, mortgage interest and taxes, office supplies, the cost of repairs and insurance, and depreciation on property. But here are some commonly overlooked small-business tax deductions.

1. Home office deduction

Do you use a room in your home as your primary place of business, where you deal with patients, clients or customers? You may be able to claim a home office deduction on your personal income taxes, as long as you use part of your home exclusively for conducting business. But using a room as both an office and a place for guests to stay, for example, probably disqualifies you.

If you qualify, decide whether to deduct actual expenses or use the IRS’ simplified method.

If you deduct actual expenses, only amounts spent solely for the business part of your home will be eligible for full deductions (for example, painting or repairs in the area used for business). Indirect expenses — such as insurance, utilities, rent and general repairs — are deductible based on the percentage of your home used for business. Other unrelated expenses, such as lawn maintenance, are not deductible.

If you choose the simplified method, calculate your deduction by multiplying $5 by the square footage of the area of your home used for business. The IRS limits the area deducted under this method to 300 square feet, so the maximum simplified deduction is $1,500.

More information on qualifying for the home office deduction can be found at IRS Publication 587.

» MORE: Best tax software for small businesses

2. Carryovers

Capital losses, home office deductions and net operating losses are all overlooked deductions that can be carried over into future tax years to reduce taxable income, says Weltman.

“If you work out of a home office and your expenses were actually higher than the income you earned in the home office, you can carry over the deduction to a future year,” Weltman says. However, this only works if you use the actual expense method, since there’s no carryover for the simplified method. Your carryover amount can be found on your previous year’s tax return at the bottom of Form 8829.

If your business wasn’t profitable and you had an operating loss, you actually have the option to either carry back the loss for two years (for a tax refund), or carry forward the loss for up to 20 years to offset your future taxable income, with no limit on the amount you can deduct. Doing a carryforward makes sense if the taxpayer was in a low tax bracket in the carry-back years but expects to be in a higher tax bracket going forward, Weltman says.

Whether it reduces the business’s taxable income or the business owner’s personal income depends on the company’s corporate structure. It’s best to consult an accountant or a tax professional for further guidance.

3. Startup expenses

You may be able to deduct the expenses paid to start your business, such as advertising, transportation, consultant fees, travel, employee training and wages, and legal and accounting fees.

You can deduct up to $5,000 in qualifying startup costs and up to $5,000 in organizational costs. Both deductions phase out when your total startup expenses or organizational costs hit $50,000. Each $5,000 deduction is reduced by the amount in startup costs that exceed $50,000.

If you have more than $55,000 in expenses, no first-year deduction is allowed and you’ll need to amortize all your startup and organizational costs over the next 180 months of operation, according to the IRS.

NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. Start here to maximize your rewards or minimize your interest rates. Steve Nicastro Get Your Free Personal Credit Score Every Week from NerdWallet Open more doors for financing your business.Set your goals and track your progress.Signing up won't affect your score. Get your free credit score 4. Losses on bad debts

Is there any money owed that your business can’t collect, such as unpaid accounts receivable or advance wages to an employee who quit? It may not be a total loss for your business because it may be a deductible expense.

The IRS defines a bad debt as one that was created or acquired in your trade or business, or closely related to your trade or business, when it became partly or totally worthless. Types of bad business debts include loans to clients, suppliers, employees or distributors, and debts of an insolvent partner. They become bad debts only after you’ve tried to collect on them for a reasonable period of time and you’ve taken “reasonable steps to collect the debt but were unable to do so,” according to the IRS.

You can claim a deduction for a bad business debt only if you previously included the amount owed to you in your gross income, according to the IRS.

5. Tax, legal and educational expenses

In general, the fees paid to your accountant, lawyers or business consultants that are “ordinary and necessary expenses directly related to operating your business” are deductible in the tax year they were paid, according to the IRS. However, legal fees that are paid to acquire business assets are not deductible.

Other eligible deductions may include tax-preparation fees paid in the previous year, licenses and regulatory fees paid to state or local governments, and expenses paid for the cost of education and training for your employees.

Insider tips: Sign up for our monthly small-business newsletter.

Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

For steps on how to turn your business idea into reality, read NerdWallet’s Starting a Business guide.

Updated Feb. 21, 2017.

Cashier’s Check: When You Need One and How to Get It

Cashier's check: Summary A cashier’s check is a check guaranteed by a bank, drawn from its own funds and signed by a cashier or teller. It’s one of the safest ways to make large payments on purchases. The most important difference from a regular check is that the bank guarantees its payment, not the purchaser.

 

You’re about to make a big purchase — maybe your first house, or a car — and even though you saved enough money for a down payment, the seller requires a cashier’s check. If you’ve never purchased a cashier’s check, you might be wondering why a personal check isn’t OK, and what kind of fees you’ll have to pay.

Here’s how cashier’s checks are used and how you can get one when you need it.

What are cashier’s checks?

A cashier’s check is a draft guaranteed by a bank, drawn from the bank’s own funds and signed by a cashier or teller. It’s used in place of cash, personal checks, credit cards or money orders.

People also use: • Money orders • Certified checks

The most important difference with a regular check is that the financial institution that issues a cashier’s check covers its face value instead of the purchaser. Sellers ask for this kind of payment because it’s guaranteed, since the funds are drawn against the bank rather than a personal account.

How can you get a cashier’s check?

A teller ensures that the purchaser has the cash to pay for the check or, if the funds being used are in an account at that bank, that there is enough there to pay for it before issuing a cashier’s check. The full amount of the check will be frozen in your account or withdrawn when the check is issued.

Fees and bank policies

Many banks charge a fee of around $10 to cut a cashier’s check, but some offer them for free to customers, depending on the type of account a customer has. At least a few charge a percentage of the check amount. Information about these fees and related policies can usually be found in the checking rates and fees pages that most institutions publish on their websites.

If you’re traveling, or in a pinch, and you can’t find a bank that will issue you a cashier’s check for cash, you may need to open an account. Our checking tool can help you compare the costs and possible charges associated with free or low-fee checking accounts.

Identification required

You’ll need to talk face to face with a teller to get a cashier’s check. You’ll have to show identification, supply the exact amount of the check you need and provide the name of the payee. You can’t get a blank cashier’s check; you must furnish the name of the payee when you purchase the check. Once the teller confirms you have the funds to cover the requested amount, the check will be written for the amount you requested, and the teller or a bank officer will sign it. NerdWallet is a free tool to find you the best credit cards, cd rates, savings, checking accounts, scholarships, healthcare and airlines. Start here to maximize your rewards or minimize your interest rates. Bev O'Shea Get Your Free Credit Score Get your free score every week.Set goals and see your progress.Signing up won't affect your score. Get your credit score

Security protection

Although funds from a cashier’s check deposited into a bank account are usually available the next day, many banks place a hold on amounts over $5,000 until the check has been cleared by the issuing bank. In some cases this can take days, but that helps protect against cashier’s check fraud. Cashier’s checks contain additional security features that make counterfeiting more difficult, and this also helps prevent scams. Try not to take a cashier’s check from someone you don’t know, and if you do receive one, wait to use the funds until several days after the check has been deposited, or check with your bank to make sure it has cleared.

If a cashier’s check is lost, banks may require the purchaser to get an indemnity bond for the amount of the lost check before issuing a replacement, according to the U.S. Office of the Comptroller of the Currency, a bank regulator. This bond ensures the purchaser is liable for the replacement check.

Cashier’s check vs. certified check vs. money order

A cashier’s check isn’t the same as a certified check, which is a personal check written by a bank customer and drawn on the customer’s account. The bank certifies the signature is genuine and that the customer had sufficient funds to cover the check when it was issued.

Why use a cashier’s check instead of a money order? Money orders are inexpensive, and you can purchase them with cash or a debit card, but there may be limits, such as the U.S. Postal Service’s $1,000 cap on the amount. Also, money orders aren’t considered guaranteed funds, since they aren’t covered by another institution.

The bottom line

Cashier’s checks are one of the safest, most practical and increasingly preferred ways to make large payments on purchases. If you have a big purchase to make and can’t use a debit or credit card, a cashier’s check can be a great way to pay a large amount of money. When you purchase one of these checks from a bank or credit union, all parties can be confident that the transaction is secure and the risk of theft or fraud is minimal.

Updated Feb. 21, 2017.

LendingPoint Personal Loans: 2017 Review

NerdWallet rating: 4.0 / 5.0 Good for: Bad credit, debt consolidation

LendingPoint offers personal loans for people with average to bad credit scores who need a fresh start on paying down and consolidating debt or building credit. LendingPoint may offer cheaper interest rates than other online lenders because it looks at more than just your credit score.

LendingPoint may be a good fit for you if:

  • Your credit score is at least 600
  • Your salary is $20,000 or more
  • You live in one of these 17 states: Ala., Calif., Colo., Del., Ga., Mich., Mo., Mont., N.J., N.M., N.D., Ohio, Ore., S.D., Texas, Utah, Wash.
LendingPoint at a glance Typical APR15.49% – 34.99% Loan amounts$3,500 - $20,000 Time to fundingNext day in some cases Origination feeVaries by state Soft credit check?Yes Apply Now

 

» MORE: Lenders that offer personal loans for bad credit

LendingPoint personal loan review

To review LendingPoint, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data, and compared the lender with others that seek the same customer or offer a similar product.

If you have average or bad credit, LendingPoint could be a cheaper place to get a loan compared with other lenders. That’s because LendingPoint looks beyond your basic credit score, grading your creditworthiness on a range of other factors. The grades don’t correspond directly with credit scores, so someone with a low credit score could still earn a high grade and get favorable loan terms, says Tom Burnside, LendingPoint’s CEO.

The other factors include:

  • Credit history and credit card debt.
  • Employment status.
  • Current delinquencies and bankruptcies.
  • Charge offs in the last 12 months.
  • Open tax liens.
  • Debt-to-income ratio.

You can be approved for a loan in as little as 15 minutes, though in some cases it takes several days. Some borrowers receive funds by the next business day.

Customizable repayment options

LendingPoint personal loans come with a lot of flexibility. You can customize some aspects of your repayments, like choosing a payment due date and scheduling your payments every other week, every 28 days or at some other interval. The origination fee can be paid upfront or added to your interest rate. You can request one loan modification during the term of your loan.

How to apply for a LendingPoint loan

You can apply on LendingPoint’s site, or you can apply on NerdWallet using the button below. NerdWallet’s lender marketplace checks multiple lenders and displays all the loans for which you qualify, based on your application. You can compare rates in one place, and applying won’t affect your credit score.

Apply Now More about LendingPoint

LendingPoint loan requirements

  • Minimum credit score: 600
  • Minimum income: $20,000
  • Minimum credit history: None
  • Debt-to-income ratio: 45% or below

LendingPoint terms

  • APR range: 15.49 – 34.99%
  • Loan amount: $3,500 – $20,000
  • Loan duration: 24 – 48 months

LendingPoint fees and penalties

  • Origination fee: Varies by state
  • Prepayment fee: None
  • Late fee: $30 after 15-day grace period
Before you take a personal loan

Consider other debt consolidation options

Check your free credit report

Learn how personal loans work

Calculate payment scenarios

Have a plan for getting out of debt

Amrita Jayakumar and Jeanne Lee are staff writers at NerdWallet, a personal finance website. Email: ajayakumar@nerdwallet.com or jlee@nerdwallet.com. Twitter: @ajbombay or @jlee_jeanne.

Updated Feb. 21, 2017.

Personal Loans Ratings Methodology NerdWallet’s ratings for personal loans awards points to lenders that offer consumer-friendly features, including: soft credit checks, no origination fees, payment options, short time to funding, interest rate caps of 36%, and absence of prepayment penalties. Features are considered for their positive impact on consumers’ credit history and financial health. To ensure accuracy and consistency, our ratings are reviewed by multiple people on the NerdWallet Personal Loans team. — Among the very best for consumer-friendly features — Excellent; offers most consumer-friendly features — Very good; offers many consumer-friendly features — Good; may not offer something important to you — Fair; missing important consumer-friendly features — Poor; proceed with great caution

Don’t Hit the Brakes on Uninsured Motorist Coverage

By Scott W. Johnson

Learn more about Scott on NerdWallet’s Ask an Advisor

Almost all states require drivers to carry a minimum amount of auto insurance. Unfortunately, many drivers ignore this law. For example, 25.9% of drivers in Oklahoma are uninsured, according to 2012 data from the Insurance Information Institute.

This is the highest rate in the nation, but every other state also has a significant percentage of uninsured drivers.

Of course, these drivers aren’t only flouting the law; they’re also jeopardizing your financial future. When a driver without auto insurance hits your car, you might be on the hook for your own medical bills and repair costs.

These economic consequences can come not only from uninsured motorists, but underinsured ones as well. With some state minimums as low as just $10,000 in personal injury coverage, a huge percentage of Americans are driving around without nearly enough liability insurance.

That’s why it’s a good idea to carry uninsured and underinsured motorist coverage. These pay your medical bills — and sometimes your property damage costs — if the person at fault in your car accident doesn’t carry automobile liability insurance or doesn’t carry enough.

Insuring against financial catastrophe

For an idea of how costly it can be to get in an accident with an uninsured motorist, just imagine the cost of even short hospital stays. Don’t forget to factor in ambulance costs, emergency room care, missed work, specialized rehabilitative care, physical therapy, and potentially even at-home skilled nursing care. Even if you’re in an accident with someone who has minimum coverage, $10,000 won’t go very far toward meeting your needs.

Many people assume that their health insurance will pay all medical bills arising from an auto accident. This may or may not be the case. Even when your health insurance does cover all your medical costs, it typically won’t pay for time off work, long-term care or cosmetic surgery — not to mention that you’ll still owe deductibles and copays.

Uninsured motorist insurance also kicks in when the at-fault driver leaves the scene of an accident. Both can work either in place of or in tandem with your health insurance and can help pay for days off of work or long-term specialized care.

Of course, you can always sue the person who caused your accident — but people who don’t have or can’t afford auto insurance often have no assets and couldn’t pay a verdict.

How much to purchase

I generally suggest clients purchase as much uninsured and underinsured motorist coverage as they have in general liability insurance. After all, if you have $100,000/$300,000 in general liability and only $50,000/$100,000 in uninsured or underinsured motorist coverage, you’re purchasing more insurance for others than for yourself. That might appear to be very nice, but is it practical?

» MORE: How much car insurance do I need?

Every state has its own rules and regulations around these policies, as with all insurance. According to the Insurance Information Institute, about 20 states require some version of the two; the rest don’t. But just because your state doesn’t require them doesn’t mean that you do not need it. Uninsured and underinsured motorist coverage can help you avoid potentially catastrophic situations.

Scott W. Johnson is an insurance agent and manager at Marindependent Insurance Services.

Millennials, Have Presidents Day Off? Get Your Investing Game Started

If you’ve got Monday off for Presidents Day, you may choose to spend it binge-watching “The OA” or brunching with your crew. But it would be smart to set aside a little time to give your finances the presidential treatment.

Not sure how to invest in your 20s or finally get that budget started? Here are some steps to take.

Bring spending under control

Overspending is one of the most common complaints about government; the powers that be are in a constant battle over how to keep the nation’s budget in check. Overspending plagues average Americans, too, especially with credit cards and the all-too-simple ways to use them (ahem, Amazon Prime). But if you are regularly living beyond your means, it’s a recipe for debt and disaster.

To start getting on track, write down all of your monthly income, including your day job and side hustles. Then write down all of your required monthly obligations: debt payments, groceries, bills, transportation costs and so on. If your expenses add up to more than your income, you’ve got to find ways to cut costs so you don’t accrue debt.

If you’re lucky, you’ll have a monthly surplus. Aim to designate a percentage of that extra cash for saving or investing, and consider setting up automatic transfers to savings or brokerage accounts each month. The remainder can be discretionary income for things like Netflix, nights out and Uber rides.

Get serious about retirement

Even presidents have to retire someday. Starting to save for retirement now can be challenging if you have huge student loans or rent payments. But the sooner you start, the more you’ll benefit later, thanks to compounding returns.

If you already have a retirement account, see whether you can afford to increase your contribution. Not there yet? If your employer has a 401(k), sign up to automatically contribute a percentage of your paycheck each month — especially if there’s an employer match, which gives you free money. Contributions are also pretax, which gives you the benefit of lowering your amount of taxable income.

If a 401(k) isn’t an option, consider opening a Roth IRA. In this retirement account, you contribute money after it’s been taxed. The money then grows, and you can withdraw it tax-free once you reach 59½.

Invest in your future

Presidents must make tough decisions, balancing what might be popular now and what might be best long term. You can look at your own investing the same way. Taking money that could be used on fun or immediate needs and putting it in the market may feel boring and unsatisfying. But investing even small amounts in nonretirement accounts can generate more returns than a savings account and help you buy a house or send your kids to college years from now.

Index funds and exchange-traded funds are excellent choices for new investors. They’re essentially a basket of various stocks and other investments that will diversify your portfolio and provide less risk than individual stocks. They also usually have relatively low fees. If you’re a newbie, learn more about how to invest in stocks before you get started.

Enjoy your day off, but don’t miss out on the chance to evaluate your finances and set yourself up for a more stable future.

Emily Starbuck Crone is a staff writer at NerdWallet, a personal finance website. Email: emily.crone@nerdwallet.com.

Sean Talks Money: How to Give Your Child Excellent Credit

My sister Megan called me recently asking for advice on picking a new credit card. Because she’s a college student and only 19, I assumed she’d qualify only for a student or secured credit card, so I spent 10 minutes talking her ear off about those options before I bothered asking whether she knew what her credit score was.

Her answer? 778, well into the “excellent credit” range many top-tier credit cards require. I was floored. My baby sister’s credit score was only 20 points lower than my own, despite my having a regular job, bill pay history and quite a few credit accounts to my name.

After some digging, I learned that my parents had basically gifted her near-perfect credit by the time she graduated high school. Here’s how they did it and how you can try to do the same for your kids.

How it happened

Looking at Megan’s credit score dashboard at NerdWallet reveals some interesting stats:

  • The oldest credit card on her report is older than she is, at 23 years and 7 months.
  • The average age of her accounts is 7 years and 2 months. (Seven years ago, my sister was 12.)
  • 12 open accounts.
  • An unblemished payment history.
  • Over $100,000 credit line.
  • Four hard inquiries in the past year, which is above average, suggesting that her score could rise even further once the impact of those “hard pulls” dissipates.

»MORE: Understand your credit score

Those stats aren’t errors. They just reflect the potential power of “authorized user” status.

My parents didn’t have a master plan when they added Megan as an authorized user of their cards. They did so simply because giving her direct access to their cards was easier than giving her cash when she went on school trips, attended dance camps, or just stepped out for gas or groceries.

Fortunately for Megan, my parents have had many years of impeccable credit hygiene, and she automatically gained that same benefit as an authorized user of their cards. As a result, my sister has amazing credit, even though the longest-serving card she herself owns is just 1 year and 5 months old.

“The first time I found out my credit score was when I applied for an apartment and they requested my credit information,” Megan told me. “I remember sitting at the desk in my dorm room, and once I found out, I immediately called my mom and then I ran around and told all of my roommates. Sadly they didn’t share the excitement since they had no idea what a credit score was.”

Should you do this for your children?

This may sound odd, but you can add your children of any age as authorized users on your credit cards. Here are the caveats you should keep in mind:

  • The authorized user approach makes sense only if you can add your children to a card in good standing, meaning you’re paying the bills on time and keeping the balance low. Any mistakes you make on your card, such as missing a bill or charging a high percentage of your credit limit, would damage your children’s credit score.
  • If you’re concerned about what your children might do with access to your credit line, then simply don’t give them the actual cards. Add your children as authorized users and then — when the mail comes — shred the cards or bury them in your sock drawer. Your children will get the credit benefit regardless of whether their card is ever used; the credit bureaus don’t know the difference.
  • FICO and VantageScore, the two biggest credit scoring companies in the U.S., aren’t enamored of the idea of credit piggybacking. They’re working on newer versions of their credit-scoring algorithms to lessen the positive impact of being an authorized user, so your children may not benefit as much as my sister did. That said, lenders tend to be rather slow to adopt the newer credit scoring algorithms, so this may not have much real-world impact for a while.
  • If you trust your children with access to your money, you’ll also need to trust that they’ll protect your credit card information. Make sure they know credit card security basics, like to use it only at reputable websites and businesses, and to never leave cards lying around in public sight.

My mom, Kristen, has some additional advice: “Make sure your child understands the importance of credit and that it isn’t free money. They can go and buy something on credit and it be pretty easy, but they have to understand that the charge has to be paid.”

If you have a card with solid payment history, consider adding your children as authorized users. It can help them build their credit and learn other financial skills that will serve them well when they’re no longer under your roof.

Sean McQuay is a credit and banking expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards and banking products more effectively. If you have a question, shoot him an email at asksean@nerdwallet.com. The answer might show up in a future column.

Online Medicine: What to Know Before You Sign Up

By Cheryl Welch

Learn more about Cheryl on Nerdwallet’s Ask an Advisor

The world of health care is changing rapidly thanks to new advances in technology. Innovations such as patient portals and telemedicine allow patients and doctors to connect in new ways. However, there are pros and cons to both services.

Patient portals

Medical practices across the country are rolling out patient portals, which are secure websites where patients can view, download and share their health information, including blood work and lab results. They can also contact staff and doctors via a messaging system and request medical records, prescription refills and appointments — all 24/7.

Mary*, an RN in New York, loves using patient portals. She typically works overnight shifts and isn’t awake during normal business hours, so the service allows her to take care of medical tasks when it’s convenient. For example, she receives an appointment time within three days of requesting one via the portal.

Still, other patients, even the most technologically savvy, find these portals to be unfriendly. And some note that some portals aren’t mobile friendly, limiting their usefulness for patients on the go. They can also come with hidden costs. Another client, Ashley, was offered access to a free patient portal and told to email her child’s pediatrician with any questions — but later received bills for $50 per email.

Telemedicine

Some medical practitioners also offer telemedicine, or patient appointments via telecommunications technologies such as Skype. This service increases access to medical care in underserved regions and remote areas. It can also cut down on costs associated with traditional health care.

It’s a new process, but some states — including New York — already require insurance companies to cover telemedicine as they would in-office services. But doctors don’t necessarily advertise this to their patients. Visits can cost as little as $25 and help patients avoid in-person visits for routine ailments, but many don’t know they have the option.

Patient portals and telemedicine can benefit both patients and medical personnel, but doctors should do a better job of making both user-friendly, cost-effective experiences and publicizing their availability. In the meantime, patients should ask their practitioners and insurers about online medical services, including the costs involved, before diving in.

*Names have been changed to respect the privacy of the patients interviewed.

Cheryl Welch is the president of Hudson Valley Medical Bill Advocates.

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