Jill On Money: Mid-year money
It’s officially summer, which means you might be tempted to shut down and drown out anything financial. Not so fast.
You may not be able to control inflation, the path of the economy, or the direction of financial markets, but there are many areas where a little attention can reap great benefits.
Beware of ‘junk fees’
The Biden Administration has called for companies to end “junk fees,” which are designed either to confuse or deceive consumers.
They range from bank overdraft and non-sufficient funds fees, credit card late payment fees, hotel resort fees, airline baggage and change fees, service fees added to the cost of concert or sporting events, and cable fees.
One way to fight these pernicious fees is to methodically review the categories of spending where they usually pop up. Doing this all at once is a bear, so focus on one each month.
Start with areas where the fees are most expensive, like banking, where you can often limit fees by consolidating accounts and using direct deposit.
For credit cards, if you are carrying a balance, higher interest rates are making it tough to keep up, which makes it even more important to eliminate all other fees. Create an automatic payment to the card company, even for a low amount, so you can avoid late fees. This is also a good idea for all recurring bills, like rent and utilities.
For those who have multiple credit cards, get rid of those with high annual fees. Doing so may temporarily cause your credit score to drop, but it will likely be worth it over the long term.
Next, examine your cell phone bill and see if there is a lower rate plan available with your current provider or see if a move to a cheaper provider makes sense. Finally, review all streaming services and cancel those subscriptions that you don’t really use.
Clean up investment accounts
More and more workers are changing jobs frequently, leaving a slew of orphaned retirement accounts in their wake. Try to combine all like accounts (i.e., all Roth’s, all Traditional) into one place.
If you have a good current workplace plan, you may be able to roll old accounts in. Otherwise, you can simply choose the place that is easiest for you to navigate and roll the money in there. While you are at it, try to consolidate all post-tax brokerage accounts into one.
Combining accounts makes it easier to monitor your entire portfolio, ensure that your money is properly diversified, and allows you to see whether you can dump expensive managed mutual funds, in favor of cheaper index funds.
Boost retirement contributions
Most retirement plans have a way to automatically increase your contribution levels. These “auto-escalation” features can help you slowly, methodically, and painlessly increase the amount you save for retirement each pay period.
Read your homeowner’s or rental insurance policies
The time to figure out what is in your policy is not in the aftermath of a severe event, but before it occurs.
As a reminder, most standard homeowners’ policies cover structural and water damage only in limited circumstances, like when a falling tree knocks a hole in a roof or breaks a window, allowing rain to fall inside.
Most policies do not cover damages that result from rising water, unless you live in a designated flood zone and have purchased insurance through the government’s National Flood Insurance Program.
Start or complete estate planning
What would mid-year money be without me nudging you to prepare your will, power of attorney, and health care proxy. If you don’t want to hire a qualified estate attorney, there are plenty of online choices.
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at askjill@jillonmoney.com. Check her website at www.jillonmoney.com.