7 Things You Should Never Carry in Your Wallet

Learn why your Social Security card, checks and extra credit cards do not make the cut.

Every year millions of Americans see their money and personal information fall into the wrong hands, and the consequences can be devastating. In fact, an identity fraud study by Javelin Strategy & Research found that 16.7 million victims of identity fraud lost a total of $16.8 billion in 2017.

Identifying the things to never keep in your wallet is the first line of defense against theft and fraud. And let’s face it—when was the last time you reviewed the items in your wallet and cleaned out those that are not totally necessary? If you’re carrying around sensitive items in your wallet on the off chance you might need them one day, you could be asking for trouble.

“Anything that’s convenient for you would be convenient for a thief,” says Michael Sullivan, a personal finance consultant at the nonprofit Take Charge America, a national credit counseling and debt management agency based in Phoenix.

“You have to ask yourself what will be the most harmful,” he says. “The most harmful things in your wallet are things that have long-term costs.” According to a study by the Identity Theft Resource Center, identity theft can have long-lasting ramifications for its victims, ranging from bad credit to bankruptcy.

Anything that could be used to steal your identity is at the top of the list of things you should never carry in your wallet.

To safeguard your finances while you’re on the go, consider these seven things you should never carry in your wallet:

1. Social Security number

Sullivan says your Social Security card and any identification or documents that include your Social Security number are perfect examples of what not to keep in your wallet. Those nine digits could make it easier for a fraudster to open loans or credit card accounts in your name. A crook could also use your Social Security number to file a tax return and claim a refund.

2. Checks

Brian Meiggs, founder of the personal finance blog My Millennial Guide, says checks and deposit slips are on the list of things to never keep in your wallet. These items may have more information on them than you think, including your name, address, bank name, routing number and account number. These details could be used nefariously if obtained by a fraudster.

“Even if it’s a check that’s already been filled out and used, that can still lead to a fraudulent transaction,” Meiggs says.

Blank checks and numerous credit cards are things to never keep in your wallet.

3. Numerous credit cards

As you figure out what not to keep in your wallet, consider that less could be more when it comes to the number of credit cards you carry.

“Do you need to carry that department store card with you all the time? No, only when you plan to go to that store,” says Linda Jacob, a certified financial planner and accredited financial counselor with Consumer Credit of Des Moines in Iowa.

If you’re trying to avoid the things you should never carry in your wallet, Jacob recommends having just one credit card and debit card on you at any given time. Bonus: This practice could also be a great way to curb impulse shopping and a tip to living a frugal life. You won’t be tempted to use that store credit card if you don’t have it on you.

4. Multiple gift cards

If you’re considering what not to keep in your wallet, think about the number of gift cards that can pile up—especially after the holidays or your birthday—and that you may tote around out of habit. “If you’re carrying a number of gift cards, you are basically risking giving the value of those cards away if you happen to lose your wallet,” Sullivan says.

To strike this item off the checklist of things to never keep in your wallet, consider using a gift card app. With some of these apps, you can scan and upload gift cards to a digital wallet so that when you shop they can be conveniently accessed from one central spot. Some retail stores also allow you to save gift card information on their apps or websites after logging in, so when you’re ready to make a purchase you can retrieve the gift card for checkout.

5. Password cheat sheets

Scraps of paper with sensitive information such as PINs and passwords are inherently risky, so add them to the list of what not to keep in your wallet.

“Certainly carrying the PIN that goes with the debit card or even the credit card is downright foolhardy,” Sullivan says, “so you should never do that.”

Besides losing your cheat sheet, you then have to worry about thieves hacking into your online accounts if they have your passwords. Meiggs recommends storing encrypted passwords and logins on a password manager website, which acts as a digital gatekeeper.

Knowledge-based authentication questions, also known as out-of-wallet security questions, should also be on your list of things you should never carry in your wallet, Jacob says. Clever identity thieves, who are always on the lookout for personally identifiable information, can scan your social media sites in an attempt to figure out answers to such questions as “What is your favorite sport?” or “When is your child’s birthday?” With that knowledge, thieves could try to hack into your accounts.

6. Excess cash

It may be nice to have cash available at all times—especially if you’re a fan of the envelope budget—but excess cash could be considered a thing to never keep in your wallet since it can make you an attractive target for thieves. When you take out your wallet to make a purchase and sift through a wad of bills, a crook could be watching. Instead, carry a small amount of money for emergencies or small purchases.

“I’ve never figured out why anyone would want to carry a wad of $100 bills,” Sullivan says, explaining that it could be a huge financial hit if you lose your wallet. “I often tell people it doesn’t typically make much sense to carry anything larger than a 50.”

7. Spare keys

Spare house keys are another item on the list of things to never keep in your wallet because they could be an invitation to crooks to steal more, Meiggs says. While you are searching for your missing wallet or filing a police report, thieves could be targeting your home. Plan to keep your spare keys with a trusted friend or relative to avoid putting your property and family at risk.

Lighten your wallet

Of course there are certain items you might want—and probably need—to carry in your wallet daily for convenience. But if you take into account this list of things you should never carry in your wallet, it could help reduce your odds of identity theft and financial damage if you lose your wallet or have it stolen.

Source: discover.com

Budget Basics: Beat the Budgeting Blues

Most of us know the importance of keeping a budget. These tips can help you stick to one.

Budget: It’s the word we love to hate. Most of us understand the importance of keeping a budget, but for a variety of reasons still haven’t found the time or energy to actually implement one. The purpose of a budget isn’t to create a complex and lengthy document, it’s to help control spending and maximize savings to ensure financial security. Keep in mind, there isn’t a one-size-fits-all budget; each individual and family is unique, and their budgets should be equally unique.

Get started on your budget by following these four guidelines.

1. Know What You Earn Vs. What You Spend

It doesn’t matter if you’re new to budgeting because all budgets start with knowing how much money you earn as opposed to how much money you spend. All budgets are designed for the same reason: so you can live within your means on a month-to-month basis. Think of budgeting this way – if you spend more than you earn, you may end up in debt, or have to dip into your savings. Spend less than your income and you get to save money. Put a few months of savings together as a result of your budgeting efforts, and you may end up with a little extra cash.

2. Create a “Zero-Based Budget” Plan

Once you have a better understanding of how your income stacks up to your expenses, it’s time to establish your budget. One simple method is called “zero-based budgeting” in which every dollar earned and spent is tracked for an entire month. Add up all your expenses including your rent or mortgage, food, cell phone bill, cable and internet, and compare them with your income for the month. The goal of the “zero-based budget” is to have zero dollars left over. Keep in mind that the purpose of creating any budget is to help you reach your financial goals.

3. Make Savings a Priority

At first, making savings a priority may be the most difficult part of budgeting. However, it will also make the biggest difference down the road. A simple habit of putting away money before spending ensures you won’t spend more than you earn, and allows you to contribute to retirement funds, rainy day funds, future vacations, car purchases and a variety of other things. When you are ready to start saving, you should consider an online bank such as Discover Bank. Online banks may allow you to save more with competitive rates because their overhead expenses are much lower. It’s also a good idea to consider a bank that offers a variety of products including savings, certificates of deposit (CDs), and money market accounts so you spend less time managing your money because it’s all in one place.

4. Be Flexible

Your budget isn’t going to be perfect. Unexpected expenses and emergencies happen to all of us, more frequently than we’d like. So don’t be unrealistic with your expectations. Understand that changes in your budget will happen, and they’ll happen frequently. The important thing is that you remain flexible and maintain your “zero-based budget”. For example, let’s say your car is having problems and you need to take it to the mechanic; you may need to cut back on your recreational expenses in order to cover the repairs.

This isn’t an exhaustive budgeting list, but it’s a good starting point. Remember that your budget is unique to you, so do what works best for you and your family. The most important thing is that you implement the budget; you won’t regret it.

Source: discover.com

6 Warning Signs That You Need a New Job

Data show that a good economy is helping workers leave their jobs for more money.

According to The Wall Street Journal, career experts used to tell people to stick to one job as long as possible, even if there was a down economy. The idea was that if you were planning on finding a new job at some point and had a history of job hopping, employers might have considered you unreliable.

The Journal reported this in 2004. Fast forward to the present, and more recent data suggest the opposite may be true. The 2017 Q3 Workforce Vitality Report from ADP, a payroll processor, found that among full-time workers, job switchers saw an earnings increase by an average of 4.9 percent. Job holders lagged behind at 4.3 percent. A similar ADP report from the first quarter of 2017 found that a better economy is giving workers more leverage, meaning they feel more comfortable leaving a job and negotiating a salary increase.

A better economy is giving workers more leverage, meaning they feel more comfortable accepting the signs it's time to change jobs.

This significantly changes the career game. Now that switching jobs won’t necessarily hurt you, it’s crucial to discuss ways you know it’s time to quit your job.

Here are six warning signs you need a new job:

1. You haven’t seen a raise in two years

According to another ADP survey, there is a sweet spot for trading in your current gig for a new opportunity. The survey found that individuals who leave a company after at least two years, but before five years, get the highest salary increases at a new job.

Individuals who try to switch jobs after working five years at the same company won’t see as much of an increase as those who leave between the three- to five-year mark (this, the survey found, is when employees get the greatest salary bump). The longer you stay past five years, the less of an increase you’ll see, the ADP survey found. More experience often means you’ll have higher pay at your current job, so you’re less likely to see as much of a pay bump if you leave.

2. The company is having money problems

One surefire warning sign that you need a new job? “If your paycheck suddenly starts becoming irregular,” says Sandy Smith, a senior certified human resources professional with seven years of experience working in corporate human resources. It’s a clear indication of cash flow issues within the company, she adds.

Not seeing a raise in two years or if your company is having money trouble may be warning signs you need a new job.

Smith, who is also the founder of the personal finance blog Yes, I Am Cheap, says this is one of the major signs it’s time to change jobs.

“Saving money by not paying employees is the death knell of a company on its last legs,” she says, “and you should immediately jump ship.”

If your employer is starting to cut benefits or lay people off, Smith suggests that it might be a warning sign you need a new job and time to financially prepare for a job transition. While one layoff or cut may not be definite signs it’s time to change jobs just yet, Smith says to keep an eye on it.

“Layoff after layoff indicates a serious issue, and you should never take for granted that your job is safe,” she says.

“Saving money by not paying employees is the death knell of a company on its last legs, and you should immediately jump ship.”

– Sandy Smith, founder of Yes, I Am Cheap personal finance blog

3. You’re stagnant

Going as far as you can go with a company is one of the ways you know it’s time to quit your job.

“If you are upwardly mobile but you have no opportunity for advancement within the company, it might just be time to move,” Smith says.

And because you alone are in charge of your career, it’s essential to be proactive, Smith says. That means you can’t wait for your manager to give you a promotion or tell you when there’s no promotion anywhere in the foreseeable future.

So, if you find yourself lacking mobility, it may be a warning sign you need a new job, and finding a new employer could be the best way to advance. Smith also points out that taking a new job in this scenario will likely allow you to increase your earning potential as well.

According to a 2016 global report by LinkedIn, 74 percent of job candidates want a job where they feel like their work has a sense of purpose. If that need for fulfillment isn’t being met, it may be one of the ways you know it’s time to quit your job.

While there were several factors that contributed to Tara Falcone’s decision to leave her well-paying job, a lack of purpose was one of them. When she started her own investment firm in 2016, ReisUP LLC, she was seeking more personal and professional satisfaction.

Before going out on her own, Falcone spent four years working as an investment analyst on Wall Street. She enjoyed what she did, but she wasn’t exactly feeling fulfilled by it. She spent her days helping people who were already wealthy manage their money. Instead, she wanted to help people who came from backgrounds similar to her own attain more wealth.

74 percent of job candidates want a job where they feel like their work has a sense of purpose.

– 2016 global report by LinkedIn

“Coming from a humble, blue-collar background, I yearned to find a way to use the skill set I had acquired on Wall Street to help people like my friends and family.”

Even if you identify a lack of fulfillment as a sign it’s time to change jobs, leaving a secure paycheck is a difficult decision for anyone, especially when, like Falcone, you’re making a pretty hefty sum. Yet, money was not the biggest factor in her decision to leave her job. Ultimately, she valued other things more—like helping an underserved community and having more personal time.

“The money was good, but not good enough to tie me down, nor more than I thought I could ever make doing something else,” she explains. “I grew up without money, so I wasn’t chasing it. And I knew that a big shiny paycheck would never fulfill me on its own.”

6. Your job is negatively affecting you

A final way you know it’s time to quit your job: It’s negatively affecting your life. Of course, this may look differently to different people. For some, health problems are the warning signs you need a new job. For others, like Falcone, it’s when your job starts getting in the way of your personal life.

“My work started negatively affecting the limited time I spent with family,” she says. “As an investment analyst, you don’t really get true vacation time when the market is open.”

Falcone recalled going home for Christmas and still needing to be available for work via phone and email. Eventually, she felt like it became too intrusive.

It’s time to find a new job

If you're not fulfilled with the work you do, it could be a sign it's time to change jobs.

If you see yourself in any of these six scenarios, take them as signs it’s time to change jobs. Dust off that resume, get on LinkedIn and start reaching out to your contacts. Now that the job-hopping stigma seems to be a thing of the past, you have far less to worry about should you decide to quit your job and find a new one.

Source: discover.com

To Spend, or to Cut? 4 Questions to Help You Avoid Unnecessary Expenses

Consider your material and emotional values to decide which expenses belong in your budget.

It’s a universal truth: For most people, budgets only have room for so much. Juggling the cost of that summer vacation you’ve been taking for 10 years with the pressing need to help pay your child’s college tuition, actually use your pricey gym membership or fix your faulty water heater is no easy feat. Sometimes, something’s got to give. But how do you decide which expenditures are worth making and which ones you should cut?

Eliminating unnecessary expenses may depend on your personal priorities.

Figuring out when to spend and when to cut—and how to avoid unnecessary expenses—depends on your personal priorities. But the following four questions will help you weigh each spending decision and choose the best option for you:

1. Is it more than you need?

During a recent family budget meeting at Rosemarie Groner’s house, the hot topic was … wait for it … paper towels. Every week the personal finance blogger’s family sits down to review how they can reduce unnecessary expenses. When their giant pile of paper towels came under scrutiny, Groner, whose blog is called The Busy Budgeter, admits they were skeptical of the wisdom and sanitation of reducing their use of paper towels. They worried about the risk of spreading salmonella and other germs, for one thing.

cut back in other areas to reduce unnecessary expenses. Travel provides the opportunity to explore different places and cultures, experience personal growth and reflection and create long-lasting memories with loved ones—all worthy outcomes.

Let’s say it’s not travel you’re pondering in your quest to avoid unnecessary expenses, but the generous line item in your budget for events like concerts, plays or museum visits. Can these things get expensive? Sure. But you may decide that the enrichment of the arts is valuable enough to continue this spending.

Investing in your education can pay off in the long run, so don't assume it's a cost you can cut to avoid unnecessary expenses.

Likewise, an investment in your education—earning a degree or taking a few classes to boost your credentials and increase your earning potential—might also be a worthwhile expenditure. In 2016, for example, the median weekly earnings for workers with a master’s degree were $1,380, compared to $1,156 for those whose education topped out with a bachelor’s degree, according to the U.S. Bureau of Labor Statistics—a difference of more than 19 percent. Professional degree earners had a nearly 51 percent pay advantage over those at the bachelor’s level.

3. When’s the last time you used it?

While some experiences are special enough that you wouldn’t want to miss out on them, there might be others you rarely use even though you’re continuing to pay for them. When eliminating unnecessary expenses, watch out for automatically renewable charges on gym memberships, magazine subscriptions and retail subscription services (including for fashion, cosmetics and food preparation kits) that continue even when you no longer want them.

Ditching a gym membership you don't use is one way to reduce unnecessary expenses.

That’s a favorite hack for eliminating unnecessary expenses from Sami Cone, a Nashville-based speaker, author and finance blogger. Cone, who discusses money-saving tips on her website and hosts a radio show called Family Money Minute, recommends putting a reminder on your calendar at either the beginning or end of each month to check your statements for expendable services and subscriptions.

Similar to those subscriptions you haven’t used in ages, are there items you purchase by habit that you or your family no longer want or need? A useful way to avoid unnecessary expenses is to take your spending off autopilot. Possible signs you need to do this stat include: You’re paying for music and dance lessons your children skip more often than they attend; you buy extra phone and data services you never use or premium cable channels you never watch; you’re frequently replacing dietary supplements and cooking spices that have lingered on the shelves past their expiration dates.

4. Will you save later by spending now?

Sometimes the best way to reduce unnecessary expenses in the long run is to invest in what seems like a big expenditure now. Upgrading your home’s heating, ventilation and air conditioning system to a more energy-efficient model, for example, might be a smart way to splurge because it can save you money on your utility bills. According to the U.S. Department of Energy’s Energy Star program, replacing a central AC unit that is more than 12 years old with an Energy Star-certified AC unit could trim your cooling bill by 30 percent.

Another example of a major expenditure that can pay off later is investing in quality home furnishings instead of choosing bargain goods. The higher-end products may save you more in the long run because they are often more durable so you won’t have to replace them as soon. Making healthier, if more expensive, food choices now can also potentially help you avoid medical costs related to illnesses like diabetes, high blood pressure and heart disease.

Stay motivated to reduce unnecessary expenses

Having a specific financial goal in mind when you set your spending priorities is an important source of motivation when you’re trying to avoid unnecessary expenses. Groner says her family is now out of debt after paying off more than $30,000 from credit cards and car loans with the help of their frugal spending habits.

Stay motivated by keeping track of how far you've come since you first started eliminating unnecessary expenses.

“In the beginning, when we were first trying to reduce our expenses, the reward was the relief to sleep at night without worrying about living paycheck to paycheck,” Groner says. “We kept going even after we left the paycheck-to-paycheck cycle because then budgeting became fun. It wasn’t about deprivation anymore. It was about laying out a path to get whatever we want in life.”

Cone, whose family used plans for a Disney vacation as an incentive to reduce unnecessary expenses, says it’s important to choose an objective that everyone in the family can get excited about. That way, when eliminating unnecessary expenses starts to pinch, you can remind them: “We’re saying ‘no’ now, so we can say ‘yes’ later,” she says.

Source: discover.com

Are You Making These 4 Common Budgeting Mistakes?

If these budgeting pitfalls sound familiar, there are steps you can take to get your finances back on track.

If you’ve blown your budget before, you might end up thinking that budgeting just isn’t for you. There are common budgeting mistakes that could impact your financial progress, sure. But many have simpler fixes than you think.

Before jumping ship at the first sign of difficulty, know that creating a budget—and sticking to it—is a skill. And all skills take time and effort to master.

What are some common budgeting mistakes? To get on the right track, review these common budgeting pitfalls and budgeting hacks:

1. You’re not motivated

If you’re considering budgeting mistakes to avoid, know that you’re less likely to stick to a budget if you don’t have clearly defined financial goals. You’re more likely to commit to your budget and be disciplined in your spending if you’re working toward a specific milestone.

“I initially created a budget because everyone said it was the responsible thing to do,” says Chonce Maddox, the personal finance writer for a blog that focuses on eliminating debt and budgeting. “After a while, I started to resent my budget because it felt like it was keeping me from doing the things I wanted to do.”

One of the biggest budgeting pitfalls is not having a financial goal for motivation.

Her “aha” moment came when she realized she actually did have motivation to start budgeting: She wanted to get out of debt. “At this point, I realized I wanted to budget, and it helped me be consistent with planning my spending,” Maddox says. She ended up using a budget to pay off more than $30,000 in student loans in less than three years.

Elle Martinez, the founder of a relationship-focused website and podcast, had a different money motivation with her significant other: to live off one income and save for big financial milestones with the other. Any essential expenses (think housing and food) would be covered by their first income, while the second would go toward traveling, paying off debt and starting a business. “This goal has been a huge factor in staying consistent with our budgeting routine,” Martinez says.

Fix: Pick goals that will inspire you

Do you want to pay off those student loans once and for all? Save for a down payment for your dream home? Travel around the world? To avoid this common budgeting mistake, write down the goals that make you tick and how much you’ll need to save to accomplish them. When you’re tempted to stray from your budget, review your goals for the motivation to stay on course.

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2. Your budget is not realistic

One of the biggest budgeting mistakes to avoid is being unrealistic about your spending. Under-budgeting in some or all of your spending categories may leave you with less money than you need to allocate toward your needs. If you chronically under-budget and then spend more than you intend, you could get discouraged with budgeting altogether.

Maddox admits that she encountered this budgeting pitfall and failed to be realistic when she started to budget. “I was comparing myself to others and creating a ‘realistic’ budget based off of their lives,” she says. “That fell through quickly because I wasn’t being honest with myself about my situation, my spending habits and my own goals.”

Fix: Track, then adjust

If this budgeting pitfall is holding you back, consider using a budgeting and spending app to help you aggregate your spending across bank accounts and credit cards. You can connect your financial accounts to a budgeting app and get regular reports of your spending in different categories. You can then begin to adjust your budget and cut back in categories as it realistically makes sense for your lifestyle.

Maddox’s process of cutting back was simple after she began tracking her spending. “I realized that I couldn’t spend so much on things like going out to eat, so I learned to cut back by cooking at home,” she says. “I do like dining out at times, but I had to keep it to a minimum.”

3. You don’t account for every expense

Leaving things out of your budget is another budgeting mistake to avoid. Let’s say you have a family reunion coming up. In the past, maybe you relied on “winging it” when it came to paying for one-off costs like transportation and accommodations. But without incorporating these costs into your spending plan, you risk having to dip into other budget categories (goodbye, streaming services) or falling short on other goals.

Since your spending habits will likely change based on different life circumstances, you’ll need to regularly review and adjust your plan to avoid this budgeting pitfall.

Fix: Review and revise your budget

Martinez, the founder of the relationship-focused website and podcast, has a specific way of handling budget revisions with her husband to avoid this common budgeting mistake. “We have ‘money dates’ where we discuss our spending plan and any changes we might need to make to it,” she says. “Most couples forget that yes, we do have steady expenses, but we also have things that come up—trips, weddings, school, etc.”

Rather than omitting special events or irregular occurrences in their budget, Martinez and her husband make sure to capture every possible expense related to these spending “anomalies” when they have their budget reviews. “Once we do that, we can make adjustments in other categories or in other months to make sure the money is there and ready to go when we need it,” she says.

Some common budgeting mistakes include not being realistic about your spending and not accounting for every expense.

To avoid this budgeting pitfall, take time to figure out any future expenses that don’t fall into your regular spending patterns, and decide how much you need to save for them ahead of time. It can take time and practice to anticipate every expense imaginable, but it will be worth it to keep your budget as accurate as possible. You can also start an emergency fund to help cover unexpected expenses.

4. Your budget is too restricting

While it’s helpful to have an accurate budget, having one that is too restricting is actually a budgeting mistake to avoid. It’s possible that your willpower will wane as you try to cut things out. There’s even such a thing as “frugal fatigue.” Just like you can’t diet restrictively or engage in other extreme activities forever, you can’t expect to stick to a hyper-strict budget long term without burning out. Long periods of restriction can be both demotivating and tiring.

After a while, people tend to bend under the pressure of trying to meet perfection. If you remain extremely strict with your spending, you could go on a spending binge under the pressure.

Fix: Celebrate financial milestones

To combat frugal fatigue and this common budgeting mistake, be sure to celebrate what you’ve accomplished. Of course, you don’t want to indulge in anything so extreme that it sets you back financially, but you should make room in your budget to recognize financial progress and reward yourself accordingly. It could be something as simple as buying your favorite ice cream after reaching a saving milestone.

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Source: discover.com