Collecting points on a credit card has never been easier. A single click on Amazon can ship items to your home overnight, if not that very same day, and a swipe of your cellphone or smartwatch can pay for your morning coffee. Making new purchases has become incredibly simple, and all of these transactions are connected to your credit card.

So, you signed up for that one card that had a big sign up bonus, and travel points, and cash back and whatever other fine print that made the card seem so tempting. But how do you get the most out of your points or miles?

You might be wasting your miles and blowing the opportunity to make the most of your credit cards.

“Am I wasting my points?”

I asked this question to an expert on the subject of points and miles: Max Frankel, founder of , a company that partners with businesses to help their employees get the most from their credit card purchases — whether that be free flights or cash.

A lot of people know how points work, but what they don’t know is what they’re doing wrong. There are five key areas where many of us fail to get the most out of our credit card rewards:

1. Overpaying with points and miles

The most common mistake is that people don’t take the time to ensure they are getting the most bang for their buck. If you have 100,000 points on your American Express card, for example, you can redeem those points for $1,000 in cash toward flights through Amex ($1,500 if you have a business platinum card). But, if you turned those points into miles with an airline’s frequent flyer program, you could turn your points into as many as 100,000 miles, which might be the equivalent of a $5,000 first class ticket.

To help get the most out of your points, it helps to know how much a ticket should cost. It also helps if you can be flexible with your dates.

“Even a day or two shift in your schedule could mean spending half the number of miles to get your ticket,” Frankel said.

2. Failing to look for partners

One of the most common complaints Frankel hears from people about using points for travel is that they get frustrated by the lack of availability of certain flights and times. When you go online to try to redeem your miles for a flight to Thailand, for example, you might encounter certain blackout dates or find that the airline is asking for an enormous amount of miles to get the ticket.

The thing is — most airlines have partnerships with other airlines that not only accept your points or miles, but they’ll often give you a better deal on a ticket in exchange for them. The catch is that when you use the search engine for a domestic airline, flights through other airlines they might partner with, say Cathay Pacific or Qatar Airlines, might not appear unless you go to those airlines’ sites directly.

“A quick Google search will show who an airline partners with and open up all kinds of options for you,” Frankel said.

3. Having the wrong type of points or miles

You might be earning lots of points, but depending on your goals, they might not be the right fit for you.

For example, let’s say a family prefers to travel to Europe every year for vacation. But they use a rewards program for an airline that doesn’t have a lot of options for flights to Europe — which means they are missing opportunities with an airline that offers tons of flights to Europe either directly or through partnerships.

“Before you go down the path of spending thousands of dollars on a credit card, think about the places you want to go first,” Frankel said. “A quick search will reveal what airline or reward program is the best match for you.”

4. Not maximizing your earning rate

It can be tempting to sign up for a credit card that offers you free miles on a specific airline — typically a mile for every dollar you spend. But Frankel says that not only limits your options — you can only use those miles with that airline and their partners — but it also limits the kind of earning power you could have from your purchases.

“If you are locked in with a single airline, whatever they say goes,” said Frankel, who advocates for having two or maybe three credit cards that you pay off each month.

If you earn points through a rewards program offered by Amex or Chase, however, you typically earn 1.5 to 2 points for every dollar you spend — which means you are earning potential miles at up to twice the rate as you would with a single airline card. You can then convert those points into miles with multiple frequent flyer programs to open up your options.

“When you transfer those points to other frequent flyer programs, you open up all kinds of pricing options that can give you much more bang for your points,” Frankel said. “It’s much better to diversify.”

And don’t be afraid to call up your existing credit card company to see if there might be a better card they can switch you to.

5. Cashing in points

Many users of rewards programs offered by companies like Amex or Chase often choose to treat their points like cash — especially when it comes to buying miles for a flight. Some cards even give you a sign-up bonus of a certain number of points, which they advertise as being the equivalent of cash.

But those points can easily be transformed into something worth more than their cash equivalent by converting them into frequent flyer miles with your preferred airline.

“Making cash redemptions should be your last resort,” Frankel said.

So … are you wasting your points? A key lesson Frankel likes to share with his clients is that, whether you’re a young professional, a family, or a small business that spends thousands of dollars using their credit card every year, it’s worth taking a step back to make sure whatever rewards program you have will help you reach your goals.

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Here’s a sampling of some of my favorite unusual economic indicators to keep an eye on:

Super Bowl winners:ĚýA trend emerges when you look at the winner of The Super Bowl, where the market does better in years that NFC teams win. Historically speaking, the boasts an 80 percent accuracy rate — although it was wrong in the last two years. This year, the Philadelphia Eagles, an NFC team, won, which bodes well for the market.

The “Sports Illustrated” cover model’s nationality:ĚýPerhaps for obvious reasons, one of the most popular issues of “Sports Illustrated” is its annual swimsuit edition. But there is also an interesting twist linked to the model who appears on the cover of the issue: Whenis from the U.S., the S&P 500 tends to generate a return above its historical rate, while a non-American cover model has seen under-performance by the S&P 500 for the year. On Feb. 13, they announced American born Danielle Herrington — another positive indicator.

Attractive servers in restaurants:ĚýBack in 2009, Hugo Lindgren of “New York Magazine” coined this theory, which he actually called the “.” It says that the “hotter” the waiter or waitress serving you in a restaurant, the weaker the economy is. Lindgren’s assumption was that good-looking people tend to find higher-paying jobs in good times.

Consumption of beer: In bad times, consumers often try to cut back to save a buck, and consumption of alcoholic beverages is often on the list of things to go. In Europe from 2008 to 2010, they experienced a in addition to its debt crisis.

The width and color of ties:ĚýAnother physical cue to the state of the economy might be the size and color of men’s ties. In good times, the theory goes, men tend to wearĚý, as opposed to dark and bland colors in downturns. They also go forĚý, which supposedly reflects reliability and trustworthiness.

The rise of pet thefts:ĚýIf you see a proliferation of missing pet signs in your neighborhood, watch out. An uptick in missing pets, especially dogs,Ěýsince the thieves are banking on a reward, or, worse, a chance to sell your pet on the black market for extra cash.

Sales of lipstick:ĚýOne closely watched segment of personal spending that may predict the health of the economy is personal luxuries, such as lipstick and nail polish. Studies have found that as the economy tanks,ĚýĚýas consumers look for a relatively affordable way to splurge.

Coupon Redemption:ĚýBack in 2009, thanks to the recession, , hitting 3.3 billion coupons redeemed, according to Inmar Inc. If you find the grocery lines slowing down as people redeem coupons, it may be a sign of bad times.

The sale of men’s underwear:ĚýBefore the most recent recession, Federal Reserve Chairman Alan Greenspan had a reputation as someone who had a knack for seeing around the corner when it came to the market. Reportedly, one of the leading indicators he looked at for his predictions. If sales of underwear dipped, that meant that income was down and trouble loomed.

The supply of cardboard boxes:ĚýAs all of us have become more comfortable shopping online for just about everything through sites such as Amazon, the site of brown cardboard boxes sitting on porches has become commonplace. That’s whyĚýĚýhas become a way to predict how retailers see the coming month. If they’re ordering more boxes, good times may soon follow.

Of course the predictive power of any of these indicators is questionable. What these do show, however, is that the effects of economic strength or weakness are far-reaching and occasionally amusing.

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The House and Senate are spending the next few weeks attempting to reconcile their two bills, hoping to revamp the corporate and personal tax code. While the final details of what may show up on President Trump’s desk are unclear, everyone has been guessing whether they will see tax increases or tax cuts.

How will you be affected by proposed changes if they were to take affect? Some new tools have emerged over the past week that can help you evaluate your bottom line, and may make some year-end moves worth considering.

Here are the best calculators to examine your own situation and determine your tax scenario.

The one major drawback of this tax calculator is that you need to have a Wall Street Journal login to view the article, but once you’re in, it’s great. It breaks down the basic factors needed to determine your new tax liability, giving you your savings number at the top, while allowing you to make quick updates to amendments and see how they might affect that top number.

The positive? This calculator easily lets you see how different factors affect your bottom line, and even allows you to view preset profiles to know how the rest of the world is doing. The negative? You need to subscribe.

This is the most comprehensive of the three calculators. It simply asks for your filing status, gross salary and tax state, and breaks down the House- and Senate-proposed reform. ItĚýalso shows the current pre-reform situation. You can even select to use their advanced calculator, which factors in various witholdings and deductions.

The positive? This calculator is quite detailed, breaking down your taxes all the way to an hourly scale. The negative? Those results might be a bit too detailed if you’re looking for a simpler breakdown.

This calculator is straightforward as well, asking for income, state, filing status, number of dependents and a rough estimate of your itemized deductions. Although it’s not as detailed as the previous calculator, this one gets straight to the point, easily laying out how much you will save under each plan.

The positive? It’s straight to the point and immediately gives you the bottom line. The negative? It’s not as detailed, and less precise with deductions.

Takeaways so farĚý

In short, you’ll find that tax rates are going to be coming down, but that deductions will disappear. For some, these will offset each other, leaving a neutral impact. Others — especially modest- to high-income residents of high-tax areas such as Maryland and D.C. — will see some increases.

Keep in mind some caveats when using these calculators: These results may provide some insight. But so far, these changes aren’t law. Provisions will probably change almost daily. The tools also don’t look at an entire tax return, which would include details about student loan interest, interest on home equity lines of credit or mortgages on second homes.

Finally, it’s still too early to make assumptions of what may be in the final bill. You can use these calculators as resources to “get the gist,” but don’t make any concrete decisions until you see the final bill.

What to do before Dec. 31? Talk to your accountant or financial adviser. Make sure they are helping you plan for whatever lies ahead, and that you are in the best position to adjust as necessary.

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Unfortunately, many investors don’t realize some investments distribute capital gains every year. Mutual funds are required to distribute substantially all net investment income to shareholders, and that can mean receiving unexpected capital gain distributions at the end of each tax year.

If you hold mutual funds in a nontaxable account like an IRA or 401(k), this is no big deal. But for investors in regular brokerage accounts or trusts, these mutual funds can lead to a big tax bite.

What are capital gain distributions?

Most investors already know that mutual funds buy and sell securities, like stocks and bonds, throughout the year. What many investors may not realize is that if the mutual fund incurs a capital gain (selling something for more than they bought it for), they have to distribute those gains out to their investors.

Even if mutual funds aren’t performing well, they can still have big capital gain distributions if they’re forced to sell their underlying holdings. This is one of the worst situations a fund can find itself in. If investors are demanding redemptions while the underlying holdings are falling in value, a mutual fund can be forced to sell highly appreciated assets as investors cash out. Insult, meet injury.

2016 mutual fund capital gains

Some of the biggest offenders I’ve seen this year are the Morgan Stanley Mid Cap Growth Fund (MPEGX) and the Delaware SMID Cap Growth Fund (DFCIX), both of which performed negatively for the year (through Nov. 30th), but are distributing well over 20 percent of their net asset value in capital gains.

Even some well-known names like the Columbia Acorn Fund (ACRNX) and a couple of Vanguard funds (VSBMX and VSLIX) are distributing over 20 percent in capital gains.

For example, let’s say you have a $10,000 investment in one of these funds. That means you may have to pay taxes at your capital gains tax rate on a surprise distribution of over $2,000. Always speak with a qualified CPA to understand your specific tax situation.

Strategies for capital gain distributions

Some investors attempt to avoid these capital gains by redeeming their interest in the fund and swapping into something else before the distribution date. A word of caution: while that approach can be effective, it’s worth noting that you may end up paying more in capital gains by selling the fund in advance than if you simply held it. Plus, you could lose money by sitting out of the market or investing in something else.

Know if you hold mutual funds in a taxable account, it’s worth checking the fund’s website through a quick Google search or check a site like capgainsvalet.com to be aware of the distribution. You may want to earmark funds to cover the tax bill.

One strategy to earmark funds is to simply tell your financial adviser not to reinvest the proceeds from the distribution, and hold the amount in cash or money market instruments until tax time.

If you hold any investments at a loss, talk to your CPA or financial adviser about tax-loss harvesting to offset the effects of any capital gains. Given that tax rates could be heading lower under a Trump administration, it may make even more sense to minimize your taxable income this year.

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But did you know that there is also a bevvy of, shall we say, “unusual” economic indicators that some superstitious market watchers have been using for years?

Here’s a sampling of 10 of my favorite of these unusual economic indicators:

Attractive servers in restaurants:ĚýBack in 2009, Hugo Lindgren of “New York”Ěýmagazine coined this theory, which he actually called the “.” It says that the “hotter” the waiter or waitress serving you in a restaurant, the weaker the economy is. Lindgren’s assumption was that good-looking people tend to find higher-paying jobs in good times.

The width and color of ties: Another physical cue to the state of the economy might be the size and color of men’s ties. In good times, the theory goes, men tend to wear , as opposed to dark and bland colors in downturns. They also go for , which supposedly reflects reliability and trustworthiness.

The rise of pet thefts: If you see a proliferation of missing pet signs in your neighborhood, watch out. An uptick in missing pets, especially dogs, since the thieves are banking on a reward, or, worse, a chance to sell your pet on the black market for extra cash.

Sales of lipstick: One closely watched segment of personal spending that may predict the health of the economy is personal luxuries, such as lipstick and nail polish. Studies have found that as the economy tanks, as consumers look for a relatively affordable way to splurge.

The length of hemlines: One of the older “alternative” economic indicators,ĚýĚýstarted back in the 1920s by a Wharton economist who suggested that women’s skirts are much shorter in boom times as a way for them to show off their fancy stockings. Conversely, in bad times, when people couldn’t afford new stockings, their dresses grew longer.

The sale of men’s underwear: Before the most recent recession, Federal Reserve Chairman Alan Greenspan had a reputation as someone who had a knack for seeing around the corner when it came to the market. Reportedly, one of the leading indicators he looked at for his predictions. If sales of underwear dipped, that meant that income was down and trouble loomed.

The supply of cardboard boxes: As all of us have become more comfortable shopping online for just about everything through sites like Amazon, the site of brown cardboard boxes sitting on porches has become commonplace. That’s why has become a way to predict how retailers see the coming months: If they’re ordering more boxes, good times may soon follow.

Champagne consumption: One way to predict whether people are feeling euphoric or fearful is to look at sales of champagne. found that sales of Champagne spike when people are experiencing good times, and take a nosedive soon after.

The price of Big Macs: While McDonalds’ made waves recently by serving its breakfast menu all day, it’s actually the price of theĚýthat helps predict how a global currency is valued compared to the U.S. dollar. In other words, if the price of a Big Mac in, say, China, is less than it costs in the U.S., that might mean the Chinese yuan is undervalued compared to the dollar.

The “Sports Illustrated” cover model’s nationality: Perhaps for obvious reasons, one of the most popular issues of “Sports Illustrated” is its annual swimsuit edition. But there is also an interesting twist linked to the model who appears on the cover of the issue: Whenis from the U.S., the S&P 500 tends to generate a return above its historical rate, while a non-American cover model has seen under-performance by the S&P 500 for the year. A similar trend also applies to the winner of The Super Bowl, where the market does better in years that NFC teams win.

Keep in mind, the predictive power of any of these indicators is questionable. However, what these show is that the effects of economic strength or weakness are far-reaching and, occasionally, humorous.

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Don’t wait until March when they’re slammed with number-crunching and tax preparation. He’ll have plenty of free time after the extended Oct. 17 tax deadline.ĚýAnd, it’s about time you used your accountant as more than your “data input” tax preparer. Using himĚýas a consultant can pay off big time.

Avoid the surprise tax bill

Compare your tax situation from last year to this year.Ěý Are you making more or less money?Ěý Are you withholding the right amount from each paycheck?Ěý Adjusting your withholding can help you avoid a surprise tax bill or refund in April.

If you’ve had any major life changes, such as marriage, children or a new job, you should review your tax withholding to avoid giving the government an interest-free loan, or worse, owing a penalty for not paying enough tax.

If you have uneven income from self-employment income or partnership distributions, you may need to make quarterly .Ěý Review these payments with your accountant to make sure you aren’t hit with any penalties.

Planning opportunities

If you’re earning less income than last year and have retirement savings accumulated, now may be a good time for a .

This is an IRA strategy in which you can take advantage of being in a lower tax bracket by paying taxes now, either on all or a portion of those retirement savings, to avoid a larger tax bill in the future.Ěý Converting part of an IRA can save you loads of money on taxes if you are temporarily in a lower tax bracket.

Planning to donate to a charity during the holiday season?Ěý Ask your CPA about the most tax-efficient ways to give to charity.Ěý For example, by donating shares of stock instead of cash, you can earn the same tax deduction, with an added benefit of avoiding paying capital gains taxes on the sale of that stock.Ěý Or, if you are over 70-and-a-half and have a ĚýandĚýyou’re planning on giving to charity anyway, it may make sense to give directly from your IRA or 401(k) through a qualified charitable distribution (QCD).

Smart deductions

Walk through your tax return and talk through deductions you may be missing with your accountant.Ěý As financial advisers at , when we look over our clients’ tax returns, we often find , such asĚýmedical expenses, investment adviser fees or tax prep fees, student loan interest and charitable gifts.

Plenty of items tend to slip through the cracks if you aren’t aware they can be deducted.Ěý Often your CPA just doesn’t have the time to ask you about each and every opportunity for tax savings in April, but having this conversation in the fall can bring missed opportunities to light.

It also makes sense to talk to your CPA about the opportunity to realize capital losses during the year if you have any investments that have done poorly.Ěý Tax-loss harvesting can help offset capital gains you may have earned, and can typically be deducted against ordinary income up to $3,000 if you have a net capital loss for the year.

Empower yourself

Lastly, have your CPA walk you through your tax return as a whole.Ěý You’ll get a better understanding of your tax situation and will be able to proactively think through opportunities for tax savings and deductions in the future.

Even if you don’t have an accountant or use TurboTax, you can still go to a tax-preparation office like H & R block and have these conversations with a tax professional.Ěý Accountants are not like a seasonal fruit stand; they’re open year-round.Ěý And if you’re looking to hire a new accountant, Washingtonian magazine has a great list of .

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It’s like asking for a blood test without knowing how to interpret the results. You know it’s a good idea to check, but you probably aren’t quite sure where to start. Let’sĚýdive into the specifics of how to evaluate your credit report.

Understand your credit score

Your credit score has a big impact on your ability to qualify for various types of loans, such as a mortgage, credit card or car loan. Even if you are approved for one of these, a better credit score (or FICO score) can lead to increased lending amounts at better financing terms. Before taking out any sort of loan, it’s a great idea to review a copy of your credit report so you are aware of what your potential lender will see. This may also help you decide if you need to delay applying for credit if there are items on your report that need correcting, or appear in error.

There are three credit bureaus: Experian, TransUnion and Equifax. They each have different methods of calculating your FICO score, but in theory, all the information on the reports should be consistent. Some businesses, however, do not report to all three credit bureaus so it is possible to find discrepancies. . These include payment history (35 percent), the amount you owe (30 percent), the length of established credit history (15 percent), new credit accounts and inquiries (10 percent) and the types of credit you use, such as credit cards, mortgages, and bank loans (10 percent).

Although your score tends to be the focal point, it is just as important to know how to read the full report, as any errors can have a negative impact on your credit terms. Most credit reports come with a glossary to help you understand what you are looking at, but let’s examine the different sections you will find:

1. Personal Information

This section includes your name, address, date of birth, Social Security number, current and previous addresses and employer information. You may see your name in multiple forms if you have changed your last name due to marriage, or used nicknames in the past. Although this information has no bearing on your credit score, it’s important to make sure all this data is correct as any misspellings or errors may lead to inaccurate reporting.

2. Credit Accounts

Here you will find a history for all the types of credit you have had. In general, there are three different types of credit accounts: mortgage accounts, revolving credit (usually credit cards) and installment accounts (those with fixed or predetermined number of payments).

Each account will list, among other things, the name of the lender, the date you opened the account, the original amount and current balance, and payment history. If an account is no longer open, you will see that marked as either a “closed” account, “collection” account, or “charged off,” meaning the creditor is no longer making an effort to collect the debt.

Late payments and delinquent accounts are generally noted by numbers or an abbreviation code and appear in calendar form with each box representing a monthly payment. If all your payments are made in timely manner, you will see “OK” inside each box; however, if you have made late payments, this is usually indicated by a “30,” “60,” or “90” signifying how late your payment was. A late payment will remain on your credit report for seven years. If there are any inaccuracies, it’s crucial to have the error fixed so your score is calculated accurately.

3. Public Records

Hopefully this section is blank, but here you will find any public records from federal, state and county courts as well as information from collection agencies. Types of information that appear include foreclosures, bankruptcies, financially-related civil lawsuits, wage attachments and tax liens. Negative public records can have a drastic effect on your credit score and can lead to many lenders denying your application for credit. Although most public records will last seven years on your report, some may remain for extended periods, such as an unpaid tax lien which may never be removed.

4. Inquiries

The last section will show any organization or company that has requested to see your credit report. This can include a credit card company when you submit an application or a bank when you apply for a mortgage.

There are two types of inquiries: hard and soft. Soft inquiries come from a company that may want to prescreen you for potential credit offers or even potential employers who are conducting background checks. Soft inquiries have no effect on your credit score since they are generally initiated without your permission.

Hard inquiries, however, occur when you apply for new credit. Hard inquiries have the potential to lower your score by a few points, as a large number of credit applications can be a red flag to potential lenders. Hard inquiries may show on your report for up to two years.

Understanding your credit report will help you stay informed and prepare accordingly when you complete an application for any kind of credit. If you know your score, you can anticipate the interest rate you may receive when you apply for a mortgage or loan. TakingĚýtime to review your credit report every year to ensure its accuracy is one of the best ways toĚýlive a healthy financial life.

For more tips on how to improve your financial situation, visit the .

Barry Glassman is a certified financial planner and president of Glassman Wealth Services.

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They ask you to call back with your Social Security number to verify your identity before discussing further.Ěý What do you do?

If you recognized that the person on the phone is more likely an identity thief than an IRS agent, you’re right.Ěý are on the rise, with .

Here’s what to watch out for and how to protect yourself:

IRS phone scams

Aggressive phone calls by criminals pretending to be IRS agents are a common scam.Ěý They will often pretend to verify your tax information over the phone to glean more personal information about you, which they will then use against you.

There are .Ěý They may say that they need to verify some personal details in order to process your tax refund.Ěý Or they could read back your personal information, which they obtained elsewhere, to add credibility before asking for personal or bank information.Ěý They may even claim that you owe taxes, and threaten court action, arrests, deportations and fines if you don’t pay up and send money.

Scammers now have the ability to “spoof” a caller ID to appear as if the call is coming directly from the IRS.

Remember: The IRS will never call, text, email, or contact you by social media to ask for personal information or demand immediate payment.Ěý Nor will they ask for your credit, debit or bank information on the phone.

If the “IRS” calls you and you haven’t received any official notice in the mail stating that you owe taxes, hang up immediately.Ěý When in doubt, call the IRS directly at 800-829-1040, and they can help clarify your situation.

Tax email phishing scamsĚý

Taxpayers are being targeted with emails that look and feel like they’re direct from the IRS or an IRS official.Ěý These may include an IRS logo or even a spoofed email address that looks like it’s from a @irs.gov domain.Ěý It may appear similar to .

Individuals are even reporting emails that appear to be from third-party, legitimate organizations (like or other tax software companies) with “unclaimed tax refunds,” trying to trick victims into providing their personal, Social Security numbers or financial information.Ěý These emails normally contain a link where individuals are directed to go and input their info.

These sites could also contain malware or computer viruses that could otherwise infiltrate your system and compromise your information.

Remember: Never click on links or attachments you receive via email that could compromise your personal information, or emails that come from an unconfirmed source.Ěý If you receive a suspicious-looking email regarding your tax situation, forward it to phishing@irs.gov to report it.

What to do if you’re scammed

If you are contacted by someone claiming to be from the IRS, or receive fraudulent emails requesting personal information that could compromise your tax situation, there are a few things you can do:

• Forward any phishing emails to phishing@irs.gov, and delete the email immediately.
• Call the IRS directly at 800-829-1040 to determine if they have a legitimate need to contact you.
• If you receive a letter in the mail, go to the and search for the form number referenced on the letter. If it’s legitimate, you will find instructions on how to contact the IRS directly: if that information is different from the letter, contact the IRS immediately to notify them.
• Go to the for more information.

If you are victim of tax identity theft, notify your CPA immediately so they can help with notifying the IRS.Ěý The also has great resources and a step-by-step guide on their website for how to recover from identity theft.

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This spring, get in financial shape with the following program, which is designed to clean up your finances and set you on the right path for the rest of the year:

Look for recurring credit card charges

It’s shocking that plenty of AOL customers continue to pay $25 each month for their email account.Ěý When is the last time you looked at your credit card statement to see what recurring charges you no longer need?Ěý With more businesses switching to a subscription model, these recurring charges can add up, and oftentimes go unnoticed.

Review your will and estate documents

Your family, financial circumstances and wishes evolve over time, so your estate documents should change as life changes.Ěý If you’ve had children, tied the knot, filed for divorce, moved to a different state or any of your close relatives have passed away, now is a good time to revisit the language in your will or any .Ěý Federal and state laws also change over time, which could impact your estate plan.

Check your retirement beneficiaries

Retirement assets, such as those in an IRA, Roth IRA, or 401(k), are passed to designated beneficiaries after the account holder’s death.Ěý These beneficiaries are chosen when you first open the account, but if you didn’t pick anyone and don’t have a will, the fate of those assets could be decided by the state.Ěý Do yourself a favor and make sure that 1) there is a beneficiary listed on your retirement accounts and insurance documents, and 2) it corresponds to the person who you want to receive the assets if you die.

Pay yourself first

Many people already save money automatically through their retirement plan at work.Ěý Fewer have an automatic method to save their leftover money each month.Ěý Rather than letting cash build up in your checking account, which you may or may not feel tempted to spend, set up a to keep those funds segregated.Ěý Through your bank, set up recurring transfers to the savings account each month.Ěý You may be surprised how quickly the account grows.

Sign up for Mint.com

If you don’t already use a financial tracking and budgeting tool like , you’re missing out on a big opportunity to recognize and change your financial habits.Ěý Responsible spending starts with good financial habits, and Mint offers great tools for tracking and visualizing your spending over time so you can see where those dollars are going.Ěý Create a budget for each spending category (like groceries, clothing, fast food), and add alerts so that you know when you’re spending too much.

Set up auto-pay on your credit card

You can set up your credit card to automatically pay the full balance (or at least the minimum payment) each month.Ěý This can help you pay down debt or avoid any late payments that negatively impact your credit.Ěý Just make sure you keep a sufficient balance in your checking account to cover the monthly payment.Ěý It’s also a good idea to check your credit report on an annual basis.Ěý A service like can help facilitate that.Ěý See to get a better idea of what to look for when you check it.

Review your investment allocation

Now that we’re 7-plus years into a bull market for stocks, the stock portion of your portfolio may have grown substantially.Ěý While growth is a good thing, you want to by diversifying your investments.Ěý Consider rebalancing your portfolio to make sure you aren’t overly exposed to stock market risk.Ěý Many retirement plans offer that can do this for you and get more conservative as you approach retirement.

You spend plenty of time working on growing your salary and furthering your career aspirations.Ěý This spring, carve out some time to examine the other areas of your finances.Ěý These steps should be simple enough to take in less than a day, and could save you plenty of time, money, and potential problems down the road.

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If these prices are going up, we have inflation.Ěý If they’re going down, we have deflation.Ěý People inside and outside the financial industry have been predicting higher inflation for years, yet inflation has remained low.

Here’s the chart of inflation through the past few decades.Ěý Higher inflation predictions have certainly not come to fruition:

A monetary phenomenon

It’s old news that the Federal Reserve has put a ton of money into the financial system during and since the financial crisis.

Just to see how much extra money the Fed has pumped into the system, below is a graph of the total US monetary base:

Why should this cause inflation?Ěý As a simple example, imagine you’re playing Monopoly — the classic board game in which every player is given $1,500 and can buy and sell pieces of “property” with the goal of becoming the richest player in the game.Ěý When properties are auctioned, their prices depend on how much each player is willing to spend.

Now imagine each player is given $15,000 instead of $1,500 at the beginning of the game.Ěý Each player is operating on a significantly higher budget and will likely spend more on each property.Ěý This is a bit of monetary policy in action: The higher the money supply (the amount of money in the game), the higher the prices, as more money “chases” the same number of goods.

Given the massive amount of stimulus undertaken by central bankers, why haven’t we seen excessive amounts of inflation?

Velocity

Central bankers cannot control spending, lending or the flow of dollars through the economy.Ěý There can be plenty of money out there (in consumers’ hands or in bank reserves), but if money isn’t changing hands, there won’t be inflation.

Back to our board game analogy: Even if there is more money in the Monopoly game, the prices of each property won’t rise unless people collect money from the bank, bid up property prices and spend it.

The graph above shows the of money, or how frequently money changes hands.Ěý This has been in a steady decline in recent years and seems to be the main reason inflation isn’t picking up.Ěý In fact, it’s hit a 50-plus year low.Ěý I see two principal reasons for this:

1. Increased savings: Even as disposable income has risen since the recession, consumer debt has gone down. Rather than spending that disposable income, consumers are saving their money.Ěý Lower interest rates have also allowed people to refinance their mortgages and pay down debt.
2. Low borrowing: The stimulus undertaken by the Federal Reserve has created a lot of excess reserves within the banking system. However, much of that money isn’t making its way into the real economy because consumers are not borrowing to the same degree that money is created.Ěý Despite the fact that interest rates are low, people are understandably wary of excessive credit after the collapse of the housing bubble.

Wages keep up?

People will not (or cannot) pay higher prices if they can’t afford them.Ěý Although wages have risen over this time period, there really hasn’t been much wage growth after adjusting for price inflation, especially for the middle class.Ěý Without wage growth, people can’t spend more without borrowing.

The Fed is hoping that inflation ticks up to around 2 percent, not because a rise in prices is inherently good, but because it could be a symptom of a stronger underlying economy.Ěý When that uptick occurs will almost certainly be dependent on two things — the velocity of money and wage growth.

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A personal umbrella policy (PUP) is your policy of last resort.Ěý It provides liability coverage above and beyond your other insurance policies, like car or home insurance.Ěý If you’re in a car accident and the other car is full people who love lawsuits, your primary liability coverage likely won’t last long, especially if they Google you and realize you are well off. ĚýUmbrella insurance kicks in for liability above your standard per personĚý´Ç°ůĚýper accident limits.

If you’re sued and existing auto or home insurance doesn’t fully cover the damages, the judge could order you to liquidate your savings, sell your real estate, or even garnish your wages.Ěý Personal liability insurance isn’t just for the wealthy– anyone can be sued for all they are worth.

And here’s the good news: this is one of the least expensive types of insurance you’ll find.

An umbrella policy may be appropriate if you own a home, are a landlord, have any high-risk hobbies like skiing or boating, or own a pet.Ěý There are countless examples of when you may be liable for damages, like if your dog bites a neighbor, you throw a party and your deck collapses, or a neighbor drowns in your swimming pool.Ěý According to , an umbrella policy will typically cover personal liability, property damage, personal injury protection against things like slander,Ěýas well asĚýlegal defense costs for any covered loss.

Umbrella policies tend to specifically mention the items they won’t cover, like damages covered under Workman’s Compensation, or damages that you expected or intended to cause.

A good rule of thumb is to get a policy that covers your net worth, including your home, savings, retirement funds, and any other assets.Ěý The cost is low because it kicks in after your car or homeowner’s policy is tapped.Ěý TheĚýestimates a cost of around $150-$300 per year for a $1 million policy.

When it comes to selecting a policy, you can look at the company where you have your home or auto insurance, but it helps to shop around.Ěý You also want to coordinate the coverage limits on your car/home/renters with the umbrella policy to be sure there’s not a gap in coverage.Ěý This can occur when one policy will cover up to $250,000 and the umbrella policy doesn’t start until after $300,000.Ěý has a great checklist for evaluating insurers.

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However, plenty of items tend to slip through the cracks because they’re easily forgettable or our tax code is convoluted enough that you may not even be aware of the rule in the first place. When we review our clients’ tax returns, we look for the following:

1. Charitable gifts
Cash donations over $250 must be backed up by an official letter from the charity confirming the amount and date of your donation. However, for smaller gifts — like the $50 you donated to your friend’s 5k charity run — you can keep a bank statement, payroll record or receipt for your records. .

2. Medical expenses
Medical expenses that aren’t reimbursed by your insurance company are often deductible if they exceed a certain percentage of income. However, what many people miss is that they also can deduct these types of expenses for their dependents, like children or elderly parents. . For example, acupuncture expenses are deductible, but cosmetic surgery is off-limits.

3. Insurance premiums
Health insurance premiums that are paid with pre-tax dollars are off-limits, as are premiums paid by your employer. However, many people, such as those without an employer health plan or self-employed people, pay with post-tax dollars and can usually deduct these premiums. This amount is treated as a part of your medical expense deduction and is subject to the same limits. However, if you’re self-employed, you can generally deduct the full amount.

4. Work-related expenses
, like the cost of traveling between work locations if you work in multiple offices, the cost of searching for a new job, the cost of a passport for a business trip or dues paid to professional societies and associations.

5. Investment advisor and tax prep fees
Fees paid for investment management services can be deducted, but only fees paid with post-tax dollars. Fees paid directly from a traditional IRA are not tax-deductible. You can generally deduct tax preparation fees paid during the year, too.

6. State sales tax
People tend to remember that they can deduct state income taxes paid during the year from their federal return. However, what many miss is that if they paid a higher amount in state sales tax than state income tax, they can deduct the sales tax instead. Most people pay more in state income tax, but depending on the state tax rate and the amount of stuff you bought during the year — think big-ticket items like cars or engagement rings — the sales tax deduction may be more advantageous.

7. Student loan interest
Interest paid on student loans can reduce your taxable income by up to $2,500 for those in certain income ranges, even if you don’t itemize your deductions. Plus, students who aren’t listed as a dependent can usually deduct this amount from their income if the loan is in their name, even if it was someone else (parents or grandparents) who paid the interest.

And for those with self-employment income:

8. Mileage
Self-employed people can claim a deduction for the miles they drive for work-related reasons. driven for business purposes. However, be sure to keep a log of the miles you drive specifically for business: You can’t deduct miles driven for personal reasons, even in the same car.

9. Home office
Prior to 2013, the record keeping requirements for deducting home office expenses were burdensome and often triggered an audit of your tax return. Nowadays, of $5 per square foot of your home used for business purposes. The square footage must be regularly and exclusively used for business purposes and it must be your principal place of business or at least a place where you regularly meet with clients. However, if you use that specific area of your home for personal reasons when you’re not working, you could still be in violation of IRS rules.

Keep in mind, many of these deductions are subject to phase-outs at certain income levels, among other limitations. Make sure you seek the advice of a qualified tax professional when preparing your return.

Tax day is rapidly approaching. The good news is that you have until April 18 this year to file your return, instead of the usual deadline of the 15. The bad news is that many people will still overlook the deductions and credits that could save them money.

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Your credit “score” is one way that lenders evaluate your ability to pay back a loan. This number is based on your credit history: the amount of money you’ve borrowed and paid back. It looks bad to your future car dealer, mortgage broker or landlord if you’ve borrowed too much money, have a lot of credit cards or fail to make payments on time.

Your payment history makes up about 35 percent of your credit score. Late payments can really hurt, so make sure you pay your bills on time for any credit cards, car loans and mortgages, even if you’re only making the minimum payment.

About 30 percent of your score is based on the amount of credit you use, or your statement balances divided by your borrowing limit. For example, if your card has a $10,000 borrowing limit, it looks a lot better to the credit agencies if your monthly statement says $2,000 than $9,000. Your card issuer may be willing to raise your credit limit without a full inquiry into your credit history, which can help this ratio.

Together, these two categories make up the majority of your score, so focusing on timely payments and the amount owed is crucial to fixing or building credit.

The remainder of your score is based on the amount of new credit you’ve taken out (10 percent), the length of your credit history (15 percent), and your credit “mix,” or the different kinds of credit you have, like cards, loans, and mortgages (15 percent). These percentages may vary based on your credit history.

If you have kids, you can help them build a credit history by adding them as authorized signors on a credit card. However, making a late payment or getting close to your borrowing limit could inadvertently impact the child’s credit.

If you have bad credit and need to fix it, the first step is to check your credit report for accuracy. You can do so for free on an annual basis at annualcreditreport.com. If you discover any errors in your payment history, it doesn’t cost anything to report them to the major credit agencies.

The second step is to change your money habits. Make your payments on time (and in full), set a budget, and create a plan to pay down debt. To help make payments on time, you can set up automatic credit card payments or monthly reminders through your bank. A free service like mint.com can help you set a budget and stick to it. Building a good credit history takes time and discipline.

Keep in mind, your credit score is just a number. Rather than focusing on reaching a perfect credit score, you’re likely better off prioritizing good financial habits — like sticking to a budget, avoiding debt where possible, and building your savings., it becomes much easier to successfully build good credit.

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While tools like orĚýcan help protect against identity theft, the scary part is that this type of attack is outdated. Cyber criminals now have a much more powerful arsenal of tools and are taking a more targeted approach to threaten your financial well-being.

Here are some new attack methods to be aware of, and how you can protect yourself:

Scenario 1: Your email gets hacked, but your hacker didn’t decide to spam your entire address book with the promise of an exciting business deal with a member of Nigerian royalty. No – instead, the hacker waits until a nugget of information finds its way into your email: a bank statement or tax form arrives, or you send an unprotected document containing your signature to a colleague. With the information gathered from your email, the hacker sends a wire form to your bank with your forged signature on it and tries to access your funds.

Lessons learned: Do a better job of protecting your email and add multiple layers of security. For example, you can add security questions to your email login or password-protect all the documents you send. Better yet, you can require your email provider to send you a text message with a random passcode each time you log in from a new device. Without that passcode, the hacker can’t access your email. Gmail and Yahoo have this. Check out to see if your email provider offers multi-factor authentication.

Scenario 2: Increasingly, cyber criminals are targeting specific individuals or businesses through publicly available information. The hacker will find you on LinkedIn, see that you work for a particular law firm or company, and look up your company’s 401(k) provider information (readily available at Brightscope.com). Once they know where your 401(k) is, they can send you an email, which looks like it’s from your 401(k) provider, claiming, “Your quarterly statement has been posted. Click here to download it.” Once you click the link and input your credentials, the hacker has your 401(k) password and can start all kind of trouble.

Lessons learned: The key here is to avoid clicking links that arrive in your inbox, especially in emails that look like they’re from financial institutions. You never know for sure if the link is valid or if someone looking to steal your information. You should also use unique passwords for each website. Password-management software such as Ěý´Ç°ů can help you generate and store passwords that are tough to crack.

Scenario 3: Despite your best efforts, your email account has again been compromised. The hacker notices that you’re buying a house and have been emailing your real estate agent and settlement company. The hacker waits for the settlement instructions, deletes the email you received with the escrow information, and replaces it with a fake email with a different account number – his own. Now, instead of putting a down payment on your dream home, you’re filling the pockets of a fraudster.

Lessons learned: In this case, go old-school. Pick up the phone and verify any account instructions verbally. You want to be sure that any account where you’re sending money is authentic. The short-term inconvenience of making a phone call could ultimately save you a small fortune.

Scenario 4: A cyber criminal does some online research and figures out who your financial adviser is. Most often, this would occur through an email hack. However, someone smart may be able to find this information elsewhere: an old statement that you threw in the trash, the accounts you follow on Twitter and Facebook, or your LinkedIn connections. The hacker then creates a fake email account and messages your adviser, telling them to “start using this new email address for all communications.” A week or two later, they request a withdrawal or wire from your account.

Lessons learned: It’s important to make sure you’re aware of what you’re broadcasting to the world. Don’t share personal information on social media and have a conversation with your financial advisor about how they prevent this type of fraud. Many firms have a policy in place to ensure that no changes are made to their clients’ information without verbal instruction. You can also use a budgeting tool like Mint () to monitor your financial transactions so that when something goes wrong, you can act quickly.

It’s often the simple steps you can take — such as multi-factor authentication, using different passwords for each website, and being vigilant of any information transmitted via email — that can go a long way towards protecting yourself. Cyber criminals like to attack easy targets, so it’s important to take these steps to deter financial fraud before it occurs.

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Much has changed in the past few years, and I’m not just referring to the quarterback. Something remarkable changed off the field, and you may want to take note.

What I’m referring to is the frugality of the Redskins’ players, as evidenced by what I consider to be Kirk Cousins’ greatest statement — about his finances.

that the Redskins players stand out not just for their completion percentage or yards gained after the catch (I’m looking at you, Jordan Reed), but for their frugality.

When you look at the players’ parking lot, you’ll find a few of the fancy cars you might expect, but you’ll also find a conversion van, a bicycle and Alfred Morris’ beat-up Mazda, which is almost as old as he is.

This team seems to be taking a sensible approach to their finances.Ěý After all, why spend 100 percent of your paycheck when the average NFL career lasts just .Ěý For many, that’s just three years to save enough to sustain a family for the remainder of their lives.

Cousins, our local hero for taking us to the playoffs, said it best in the article: “But you don’t know how long you’re going to play, you’ve got to save every dollar even though you are making a good salary.”

We all face the challenge of deciding what portion of a paycheck to spend, and what to save.

But it’s the statement Cousins made about what to do with those savings that was so intelligent and striking.Ěý “But it’s better to buy appreciating assets than depreciating. No yachts, no sports cars,” he said in the article.

Material items all typically go down in value over time — perhaps as soon as they leave the sales floor.Ěý But buying the right assets can pay you back over time.

It sounds like Cousins is learning his lessons, not just from the team playbook, but from personal finance books as well.Ěý Take one of my favorites, “Rich Dad Poor Dad.”ĚýIn this best-selling book, Robert Kiyosaki shares his story of two fathers.

One, his real dad, worked for a company and spent what he made.ĚýHis other “dad” (a friend’s father) taught him to take the money he earned and invest it in businesses, himself and assets that would generate future cash flow.

Sure, people can look at the upfront costs of owning an expensive sports car, but they have to look at the opportunity cost — what those funds might have made if invested elsewhere.

While advising clients at , I have found that sometimes people confuse an asset that may not plummet in value with an appreciating asset.

Take my wine friends as an example: Many of them have purchased wine that has maintained its value or even appreciated over time.Ěý However, very few of them ever sell the wine, and those who have tried have been disappointed that the amount they received after commissions was far less.

An asset is only worth what someone is willing to pay you for it, and it sounds like Cousins and his teammates understand this.Ěý After all, nearly 16 percent of retired NFL players go bankrupt, according to the National Bureau of Economic Research.

This can occur for a variety of reasons, one of which is lifestyle inflation — the tendency to spend more as you earn more. Cousins takes a more sensible approach: “You never know what’s going to happen so I try to put as much money away as I can,” he said in the article.

If players skimp on the fancy cars and invest appropriately, my guess is that this team of underdogs will do just fine.

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