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Your credit score—the three-digit number that creditors use to evaluate the risk when they lend you money—helps determine which loans or interest rates you qualify for and how much you’ll pay. Landlords, utilities and cell-phone companies may also check your score before doing business with you. Dozens of credit scores may be attached to your name, including versions tailored to specific industries, such as auto lending. However, the two big consumer credit scoring models—FICO (which is used by the majority of lenders) and VantageScore (a newer model created by the three major credit bureaus)—value similar behaviors when calculating your score, even if they weight those factors differently. Both grade your creditworthiness on a scale of 300 to 850, with a score of 750 or above generally considered good enough to qualify for the best rates. On-time payments. Both FICO and VantageScore prize on-time payments above any other factor. As long as you pay at least the minimum due each month, your payment history will stay clean (though you will rack up interest on your balance). Lenders typically don’t report a late payment to the credit bureaus until it’s more than 30 days overdue. If you make a late payment, it won’t haunt you forever: The impact on your credit score will diminish as long as you consistently pay your bills on time. Limits on your credit usage. Your credit utilization ratio is the amount you owe on your credit cards as a proportion of the total limit on each card, as well as the total limit for all of your cards in aggregate. VantageScore advises consumers to keep their utilization ratios below 30%, but “the lower the better,” says Barry Paperno, who answers credit questions at his website, SpeakingOfCredit.com. He suggests aiming for a utilization of 1% to 9%, rather than zero, because you can pick up a few more points by showing you are managing your credit well. You can improve your utilization ratio by spending less on your credit card and by asking your issuer to raise your limit. Applying for a new card would also increase your available credit (but having too many accounts showing balances can lower your score). Most credit card issuers report the balance from your monthly statement to the credit bureaus. To make that balance appear lower, dole out a few mid-cycle payments or pay off your bill shortly before the closing date for your monthly statement. A long track record. This slice of your score considers the age of your oldest account and the average age of all your accounts. Opening new cards may improve your credit utilization ratio, but it also lowers the average age of revolving accounts, which lowers your score. Note that a closed account in good standing remains in your credit history for 10 years, so you’ll benefit from your track record; however, keeping no-fee credit cards open (and using them now and then) is smart to help your utilization ratio stay low. Other factors. A mix of revolving and installment loans also boosts your score. But don’t overdo it when applying for new credit. Having “hard inquiries” on your credit report from potential lenders will temporarily shave points from your score. When you’re shopping for a mortgage, student loan or auto loan, inquiries made within a certain time period, typically between two weeks and 45 days, count as one inquiry. Source: Kiplinger

There are many benefits of financial planning, although these benefits differ depending on whether an individual or business is planning for the future. Individuals and businesses both benefit from having savings in the bank that can help during rough times. However, individuals use their savings differently from companies, so the advantages of financial planning are quite different. Income and Cash Flow For businesses, financial planning is crucial because it provides a clear picture of how much money is needed to cover expenses – both overhead and operating – and how much is necessary to cover any tax obligations. Overhead expenses are costs a company incurs that are not related to labor or production. These costs occur regularly regardless of how much or little a company makes and usually include expenses such as lease payments, utilities, insurance and salaries. Operating expenses occur through normal business activities, such as buying materials for production, and are required to keep the business running. Knowing where a business stands financially helps a company budget for better cash flow, which is an important measurement of a company's financial health. When a business has more money coming in than going out, it has a positive cash flow. Businesses need to be able to budget to generate positive cash flow so that they can cover all their debts and, at the bare minimum, break even. When a business fails to do so for an extended period, it can lead to severe problems such as bankruptcy. Planning for Rough Times Savings are particularly important for helping a company during rough economic and business times. A business's performance may occasionally decline, but if it declines for long, it puts a company at risk of bankruptcy. No matter how a business performs, it must pay certain expenses. Having significant savings allows businesses to cover their debts and expenses as they attempt to improve their performance and financial situation. Savings for the Future Industries are constantly changing with time, and no company stands a chance of surviving long-term without continuous innovation. One of the advantages of financial forecasting is that it gives an idea of what the future holds. Proper planning and savings provide the capital needed for investing in research and development. Businesses that include research and development as part of their financial plans understand its importance to remaining competitive in rapidly changing marketplaces. It puts them in a better position to thrive. Hiring a Financial Consultant Although financial consultants are more commonly found working with individuals, businesses do employ financial experts to consult with them on how to best handle their finances. In a small business that does not have the money to hire a CFO, a financial consultant can fill that role, and be just as effective at helping a company make better financial business decisions. Putting together a financial plan with a financial consultant helps companies avoid costly mistakes. When bringing on a financial consultant, a company is typically bringing on a multifaceted expert who can do much more than make monthly budgets. The harsh reality is that being a business owner does not always translate into being good at business finances. One of the pros of hiring a financial planner is that it lets entrepreneurs get back to doing what they do best without being bogged down by time-consuming financial matters they would rather avoid. Source: AZ Central

Here are 5 tips to set things right with the IRS Death and taxes ... you know what the deal is. You can’t avoid either of them. If you have a big tax bill that you can’t pay, life can seem pretty bleak. While the number of tax liens annually filed by the IRS against taxpayers has fallen by more than 50 percent since 2010, there were more than 14 million open tax-debt cases against individuals and businesses heading into 2018, according to the IRS data book. Despite one of the longest-running economic expansions on record over the last decade, millions of Americans continue to struggle to pay their taxes. If you’re in that boat, however, it is not the end of the world. There are steps you can take to reduce the impact of unpaid taxes on your life, credit and financial well-being. Here are five tips to lessen that burden. Tip 1: Don’t ignore the problem. The IRS will not. Even if you can’t pay what you owe, file your return on time or, if that’s not possible, file for an extension. The late filing penalty is 5 percent of the tax owed per month up to a maximum of 25 percent of the balance. There is also an underpayment penalty of 0.5 percent to 1 percent per month of the balance owed, also up to 25 percent. If you don’t file your return or make any payment on your obligation, your tax debt will grow rapidly. “The IRS is unlike any other creditor,” said John Heath, directing attorney for Lexington Law, which provides credit repair services for individuals. “When you consider the penalties involved, they can far outstrip the interest rate you pay on your credit card. “The IRS should be first on your list to pay if you have issues with other creditors.” Tip 2: Be realistic about your situation. The IRS rarely forgives tax debts. Form 656 is the application for an “offer in compromise” to settle your tax liability for less than what you owe. Such deals are only given to people experiencing true financial hardship. If you or your family have had catastrophic health-care expenses or you’ve lost your job and have poor prospects for generating income in the future, you may qualify. It doesn’t happen often. “Tax forgiveness is intended for people truly struggling with a tax burden,” said Miron Lulic, CEO of SuperMoney, a financial services comparison website for consumers. “People have to be realistic with themselves. “If you have assets and are making significant income, you won’t get tax relief.” Tip 3: Owe less than $10,000? Handle it yourself. How big is the balance? If it’s less than $10,000, you’re probably capable of handling the matter yourself rather than paying someone to help you deal with the IRS. Form 9465, the IRS application for an installment payment plan, can be filed online. The service will automatically agree to such a plan for any taxpayer who owes less than $10,000. The plans typically allow you to pay off the balance owed plus penalties and interest over a 36-month period. Tip 4: Owe $10,000-plus? Hire an attorney. If you owe more than $10,000, consider hiring a tax attorney to negotiate with the IRS. Payment plans differ, and an experienced attorney can help you get better terms. They can also help you avoid having a tax lien being assessed against you, which will damage your credit. Be careful who you hire, however. State attorneys general warn consumers regularly about tax-debt resolution scams. If someone suggests they can help eliminate interest and penalties assessed by the IRS or settle your tax debt for a fraction of what you owe, they are probably lying and almost certainly not worth the fee they will charge. Consult a resource such as the SuperMoney website, which allows consumers to compare the offers, rates, and fees of tax-relief companies and provides some background on firms’ experience and things like the number of licensed attorneys on staff. “Knowing many of these attorneys, they can provide a lot of value,” said Lulic, who formerly worked for Optima Tax Relief, a major company in the industry. “But people have to do their research and explore their options.” Tip 5: Get streamlined. The best-case scenario for taxpayers with large debts to the government is to arrange a streamlined installment agreement. As part of the Fresh Start program initiated by the IRS in 2011, taxpayers with up to $100,000 in tax debt can now qualify for such an agreement. To do so, you have to file all your past tax returns and not have entered into another installment agreement within the last five years. You also won’t qualify if you’re filing for personal bankruptcy. The benefits are significant. Taxpayers can have up to 84 months to pay the balance owed as long as the term doesn’t extend beyond the collection statute expiration date — 10 years from the date of the assessment. And the payment period may be extended beyond that if you agree to sign a waiver. You also won’t have to disclose your assets and income to the IRS. If you agree to pay via direct debit or payroll-deduction plan, the IRS will not place a tax lien on you. A big tax bill can feel like a financially and emotionally crushing burden. There is only one way to deal with it: Face the situation honestly, and develop a budget you can handle to pay it off. “If you have a tax liability you can’t afford to pay, don’t avoid the issue,” said Heath. “You can work with the IRS to deal with it.” Source: CNBC

'Tis the season for notebooks and crayon deals. Backpacks, sneakers and collared shirts and even tech also will be at some of the lowest prices of the year as retailers try to woo back-to-school shoppers. According to the National Retail Federation and Prosper Insights and Analytics’ annual back-to-school spending survey, families with children in elementary school through high school are expected to spend an average of $696.70, which would top the record of $688.62 set in 2012. Families with college students are expected to spend an average $976.78, which is up from last year’s $942.17 and would top the previous record set in 2017 of $969.88. “Back-to-class shoppers still have the bulk of their shopping to do and are waiting to see what the best deals and promotions will be at a variety of different retailers,” said Phil Rist, an executive vice president at Prosper Insights, in a statement. A survey from consultancy Deloitte found price often matters most when shopping for back to school, with 57% of respondents saying competitive prices were a top motivator. Back-to-school sales tax holidays: Is your state giving families a tax break this year? Savings for teachers: These stores are treating teachers to back-to-school discounts But don't worry, you don’t need to do all of your school shopping at once. "Spreading it out over the year can help your budget and give you a chance to hit major sales," said Kelsey Sheehy, personal finance expert for NerdWallet. "Take advantage of tax holidays and back-to-school sales to get the items you need now, but don’t be afraid to hold off until later in August." If your state has a sales tax holiday, educate yourself on what's tax-free and what isn’t. Three states had their tax holidays in July and 13 are offering a tax break in August. Shop smart Some school supplies are at the lowest prices of the year in August and early September, but you can save more with the following tips. Make a list of everything you need. Target has school supply lists available through its School List Assist feature and Walmart also have teacher lists online. Compare prices. Start with a simple Google search of the product you want or use a price-comparison website like www.bizrate.com. When in-store, one of the easiest ways to check prices is by scanning a product with the Amazon app or another competitor. Use coupons. Stores have coupons in their weekly sales circulars and on their apps and websites. At Target, use Cartwheel to save on hundreds of items each day. Earn points and rewards. Take advantage of store loyalty programs to get money off a future purchase. Also, look for other savings opportunities like earning Kohl’s Cash on purchases of $50 or more and paying with a rewards credit card. There are apps for paying, too. Ibotta and Raise recently added mobile payments at dozens of stores and restaurants, which also allows you to earn a percentage of your purchase back. At Old Navy, get 7% of your purchase back when you pay through Ibotta and at Walmart, earn 1% on all purchases. Shopping online When shopping online, look for coupon codes, free shipping, and stores that offer free return shipping. Avoid shipping fees by using an in-store pickup. Stores that offer this option include Best Buy, J.C. Penney, Kmart, Office Depot, OfficeMax, Macy’s, Kohl’s, Sears, Staples, Target and Walmart. Check a product's price history on Amazon using camelcamelcamel, which has a Mozilla Firefox and Google Chrome browser extension called the Camelizer. Or go to www.camelcamelcamel.com. Price matching One of the easiest ways to grab a deal – and avoid driving to multiple stores – is by price matching.  Read store policies, which outline how to request a match both at the store and online. Some retailers, like Kohl's, require you to bring the physical newspaper advertisements to the customer service desk for a price match. Others allow you to price match competitors’ online prices, including Amazon. Timing matters. The price usually has to be valid at the time of the match, and the item has to be in stock by the competitor. It has to be an identical item, brand name, size and model number. For online prices, third-party sellers are excluded. Beware of other exclusions. Target, for instance, notes competitor doorbusters and lightning sales are excluded. When in doubt, ask to speak to a store manager. Some stores will offer online price matching by chat or by calling. Receipt reminders Always check your receipt before leaving the store. You should also keep receipts for: Easier exchanges or returns. If the store is out of a size or a color you want, see if you can exchange the item for the right size and color once it’s in stock. Price adjustments. If an item you bought goes on sale within the week or two after, some stores will credit you the difference. For submitting rebates. If you buy an item that’s eligible for a rebate, make sure to submit the rebate or it won't be a good deal. If you’re not going to follow through, consider looking for another sale. Digitize the receipts using apps like Receipt Hog and ReceiptPal, which also helps track spending and reward you for your purchases. Stocking up In the days leading up to the new school year as well as the days after the year begins, stores will have some of the best prices on essentials such as notebook paper and notebooks. Stock up to avoid having to pay full price in the middle of the school year. Consider donating extra school supplies to a school supply drive. In a few weeks, plan to shop clearance racks when school supplies and clothes will be marked down. For young children, buy the next size in clothes when the price is right. Source: USA TODAY

One silver lining from trade tensions with China and fears about a slowing global economy – the same factors whipsawing the stock market – is that mortgage rates are heading lower. That is helping homeowners and buyers alike. People who bought in the last two to three years may pocket major savings by refinancing their mortgage, while those hunting for a new home may get a bit more spending power, thanks to lower rates. The average rate on the 30-year fixed mortgage – the most popular for home purchases – fell to 4.01% for the week ending Aug. 2 from 4.08% the previous week, the Mortgage Bankers Association reported. That was the lowest level since November 2016. The average rate for 15-year fixed-rate mortgages – a common refinance option – slipped from 3.48% to 3.37%, the lowest since September 2016, the MBA said. Even lower rates are expected when the MBA releases its next report on Wednesday. “The Federal Reserve cut rates as expected ... but the bigger influence on the financial markets was the beginning of a trade war with China,” Mike Fratantoni, MBA’s chief economist, said in a statement. “The result was a sharp drop in mortgage rates, which will likely draw many refinance borrowers into the market in the coming weeks.” As trade tensions escalated, jittery investors poured money into longer-term U.S. Treasurys, considered safe investments, lowering their yield. Fixed mortgage rates typically follow the yield on the 10-year Treasury. “We fully expect that refinance volume will jump even higher ... given the further drop in rates,” Fratantoni said. Refinancing jumps The volume of refinancing applications increased 12% from the previous week and was 116% higher than the same week a year earlier due to the decline in rates, according to the MBA. John Stearns, a senior mortgage originator at American Fidelity Mortgage Services in Milwaukee, started three new refinancings, two of which were inspired by falling rates. Tech notes: Samsung Galaxy Note 10 and Note 10+ first look: Modest upgrades come at high price One homeowner has 16 years left on a 20-year mortgage. They are refinancing into a new 20-year at a lower rate and dropping private mortgage insurance, saving about $105 a month. A second owner has 17 years left on their 20-year mortgage and is refinancing into a new 15-year home loan, shaving two years off the life of the loan. “It’s not just about a lower payment,” Stearns said. “If people are able to knock off a few years of the mortgage, that’s a good thing, too.” Purchases stymied by market Homebuyers who got preapproved for a loan earlier this year may find they can qualify for a bit more than before, said Scott Sheldon, branch manager at New American Funding in Santa Rosa, California. “With today's reduction in rates at about 1%, people are getting about $35,000 to $40,000 of extra spending power ... right now versus a few months ago,” he said. “With today's reduction in rates ... people are getting about $35,000 to $40,000 of extra spending power” said Scott Sheldon, branch manager at New American Funding. The problem is that homebuyers in many areas still face a limited supply of houses. They may be preapproved at a low rate for a mortgage, but can’t find a house to put it toward. The number of mortgage applications for purchases decreased 2% for the week ending Aug. 2 versus the week before. Stearns, who closed recently on a purchase loan after the buyer was in the market for two years, is seeing new people come through the door looking to get preapproved. “But who knows when they’ll find something to buy,” he said. Source: USA TODAY

Home values have risen across the country, which means many homeowners' property taxes are going up, too. The average annual property tax for owner-occupied single-family homes nationwide in 2017 was $3,399, an effective tax rate of 1.17%, according to Attom Data Solutions. Nine counties impose average annual property taxes of $10,000 or more. In Westchester County, New York, the average property tax is more than $17,000 a year. Now that federal deduction for state and local taxes are capped at $10,000, living in a high-tax jurisdiction has become even more expensive. If your property tax bill has increased significantly, you may have grounds for an appeal, particularly if the increase seems out of line with overall appreciation in your area. Most jurisdictions give you 90 days after you receive a new assessment to appeal, although some close the appeals window after 30 days, says Pete Sepp, president of the National Taxpayers Union. Some lawyers handle property tax appeals on a contingency basis, but most homeowners can appeal on their own, Sepp says. Plenty of property owners challenge their assessments each year, and between 20% and 40% of them win lower assessments and lower property tax bills. The following steps will show you the way to success. Step 1: Know the Rules Schedules vary, but local governments commonly send assessment notices to homeowners in the first few months of the year. As soon as you get yours—or even before—check the deadline for challenging the value. You may have just a few weeks. And be sure you know how your locality assesses property. Some set the tax assessment at a percentage of market value—80%, for example—so don't be smug if you get a $90,000 assessment on a home you think is worth at least $100,000. Step 2: Catch a Break When you get your property tax bill, check it for your tax rate, assessment figures and payment schedule, and make sure that you're getting the tax breaks you deserve. Some states allow anyone who owns and lives in a primary home to shield a portion of its value from taxation, or you may be eligible for credits based on your income or status as a senior citizen, veteran or disabled person. In Florida, for example, all homeowners are eligible for a homestead exemption of up to $50,000; those 65 and over who meet certain income limits can claim an additional $50,000. Other jurisdictions reduce a percentage of your tax bill if you meet specific criteria. While these tax breaks are valuable, they're often overlooked. For example, when Chicago increased property taxes by an average of 13% in 2016, it included a rebate program for low- and middle-income homeowners. The rebates were worth up to $200, but only about 16% of eligible homeowners claimed them. Rebates and other property tax breaks aren't automatic: you usually have to apply for them and show proof of eligibility. Contact your state's department of taxation or visit its Web site to see what breaks are available to you. Step 3: Set the Record Straight Check your property's record card, which you'll find at your assessor's office or possibly on its Web site. This is the official description of your house, and if you see an outright error—indicating four bedrooms and three-and-a-half bathrooms for your two-bedroom bungalow, for example—the assessor may fix the problem on the spot, reduce the assessed value and your tax bill. That'll save you the trouble of a formal appeal. Step 4: Size Up the Neighbors We'd never tell you to keep up with the Joneses, but comparing your property to similar ones in your neighborhood will determine whether you have a solid case. Pull up property cards of several homes of similar age and square footage and with the same number of bedrooms and bathrooms to see how their assessments line up with yours. Step 5: Build Your Case If you find that your assessed value is considerably higher than several similar homes, you may have grounds for appeal. But even if the assessment falls into the middle of the pack, it's not necessarily fair. Maybe your house has a leaky basement or lousy grading that doesn't allow you to have a garden. The assessment should be based on the market value of your home; if your place has issues that would turn off buyers, now's the time to own up to them. Step 6: Fight City Hall The process varies by locality, but you'll likely send your appeal and your evidence—data on comparable properties, blueprints, photographs, repair estimates—to the assessor for review. You should get a verdict within a couple of months. If you're dissatisfied, take your case to the appeals board and put your persuasive skills to work. Don't whine, and save your opinions on politics and tax rates for elected representatives who vote on those matters. Step 7: Enlist Troops If you don't have time, or the stomach, to do battle yourself, get a hired gun to do the legwork for you. A professional appraiser can provide the strongest evidence of your property's worth. If your community allows outside appraisals—and if you're willing spend at least $250 -- find an appraiser with national certification, such as through the Appraisal Institute or the American Society of Appraisers. Don't fall for solicitations from law firms or other services saying they'll assist you in return for a high percentage of the savings on your bill—it's not worth the cost. Step 8: Reap the Rewards If you need added incentive to bring a skeptical eye to your real estate appraisal, remember this: A successful appeal is truly the gift that keeps on giving, year after year. Raise a toast to your success. Source: Kiplinger

The U.S. Labeled China a Currency Manipulator. Here’s What It Means The Trump administration labeled China a currency manipulator on Monday, after China allowed the value of its currency to fall. The designation — which the United States last used against China in 1994— is more a symbolic move than a substantive one. But it dials up the pressure in a trade war that has rapidly escalated, harming businesses, consumers and others that depend on steady relations between the world’s two largest economies. “The trade war has now become a currency war,” said C. Fred Bergsten, the director emeritus of the Peterson Institute for International Economics. “And the Chinese are undoubtedly going to take further action.” Here’s a look at what the label means, and how it could affect the United States-China relationship. What is currency manipulation, and why does it matter? The relative value of currencies can make a lot of difference when countries buy and sell their goods abroad. When the value of the dollar is strong, Americans have more purchasing power abroad, but American exports are also relatively expensive for other countries to purchase. When the dollar is weaker, it buys fewer imported goods but makes American exports relatively cheap for foreign buyers, which spurs exports. Some countries try to game the system, weakening their currencies to lift exports. They’ve included China, which held down the value of its currency in the past to speed its economic development. That and other policies helped China build a manufacturing sector that employs tens of millions of people and serves as a factory to the world. But economists estimate that China’s economic transformation has led to the disappearance of at least a million American manufacturing jobs — and perhaps paved Donald J. Trump’s path to the presidency. Currency manipulation will also matter in the trade war, as President Trump ratchets up tariffs on Chinese goods. A cheaper Chinese currency helps Beijing offset much of the pain of American tariffs, which otherwise would make Chinese goods considerably more expensive in the United States. Is China manipulating its currency now? Most economists agree that China manipulated its currency, with negative effects for the United States, for long periods from roughly 2003 to 2013. But some are arguing against the Trump administration’s move to label China a currency manipulator now. In an announcement on Monday, the Treasury Department said China had “a long history of facilitating an undervalued currency” and had taken “concrete steps to devalue its currency” in recent days to gain an unfair competitive advantage. China did allow the value of its currency to fall on Sunday, when the exchange rate fell below 7 renminbi to the dollar for the first time since 2008. The Chinese central bank likely would not have made such a move without a go-ahead from top officials. But the move appears to be in line with market forces. (More on that below.) And it doesn’t appear to satisfy the administration’s own guidelines. Twice a year, the Treasury Department puts out a report that analyzes whether countries are manipulating their currencies. In the most recent report in May, the department criticized China’s practices but said China met only one of several criteria for determining whether a country was a manipulator. The Treasury Department said China’s trade surplus with the United States had far exceeded its threshold. But China did not meet other requirements, including sustained intervention in its currency market. Technically, a country does not need to satisfy all those criteria before the United States can label it a currency manipulator. But to some trade experts, the report undercuts the Trump administration’s claim. Eswar Prasad, a former head of the International Monetary Fund’s China Division, said the administration was applying the label in an “arbitrary and clearly retaliatory manner.” In a report released in July, the I.M.F. also found that China’s currency was broadly where it should be. “The currency manipulation charge against China is difficult to support on the basis of objective criteria,” Mr. Prasad said. How much control does China have over its currency? The United States and many other developed countries let the market determine the value of their currencies, and typically influence that value only indirectly. For example, when the Federal Reserve raises or lowers interest rates, it can strengthen or weaken the dollar. China manages its currency more actively, though the market still plays a role. Officials set a daily benchmark exchange rate for the renminbi, but allow traders to push the value up or down within a set range. Officials then use that trading activity to help determine the next day’s exchange rate, though they disclose few details about how that process works. Recently, those market forces have been pushing the value of the renminbi down, as a weaker Chinese economy and Mr. Trump’s tariffs encourage investors to sell the currency. Brad Setser, a senior fellow for international economics at the Council on Foreign Relations, said China had been resisting market pressures on its currency for much of this year. China has been reluctant to have the value of the renminbi fall too far or too fast, for fear of sparking a mass sell-off. So the Chinese government has turned to its vast foreign exchange reserves, accumulated through years of China’s exporting more products than it imported. Beijing has used those dollars to purchase renminbi and prop up its value, Mr. Setser said. Until recently, that is. On Monday, Chinese officials let the renminbi fall to the lowest level in over a decade. On Tuesday, they set the exchange rate at a level that was weaker than Monday but nonetheless stronger than most analysts had expected. So what happens to China if the label sticks? Mainly, China must negotiate how to make its currency more fairly valued with the United States and the International Monetary Fund, which governs the few international guidelines that have been established on currency. Since the I.M.F. just determined that China’s currency was fairly valued, those negotiations don’t seem likely to go far. But the designation is likely to rankle Chinese officials, who have been very resistant to being labeled a currency manipulator, said Tony Fratto, a partner at Hamilton Place Strategies and a former Treasury Department official. And if China’s recent depreciation is the start of a trend, it could have much bigger implications for the world economy. A cheaper renminbi would harm American exporters and erode the effectiveness of Mr. Trump’s tariffs. It would also hurt exporters in Europe, Japan and elsewhere. And it could create market pressures for South Korea, Taiwan and others that compete in similar industries to devalue their currencies, potentially disrupting trade and investment flows. Mr. Trump could also use the label to justify further actions on China, including perhaps higher tariffs. Stephanie Segal, a senior fellow at the Center for Strategic and International Studies, said the actions on currency “have ushered in a new stage in the U.S.-China trade war that risks spinning out of control.” “China’s willingness to allow the currency to depreciate was likely intended to remind the president of the downsides of escalating actions,” she said. “If that was the idea, it didn’t have the desired effect.” Jeanna Smialek, Keith Bradsher, and Alexandra Stevenson contributed reporting. Source: The New York Times

Choosing a financial advisor is a big decision. Being aware of these seven common blunders when choosing an advisor can help you find peace of mind, and avoid years of stress. 1. Hiring an Advisor Who Is Not a Fiduciary By definition, a fiduciary is an individual who is ethically bound to act in another person’s best interest. This obligation eliminates conflict of interest concerns and makes an advisor’s advice more trustworthy. If your advisor is not a fiduciary and constantly pushes investment products on you, it's time to find an advisor who has your best interest in mind. 2. Hiring the First Advisor You Meet While it’s tempting to hire the advisor closest to home or the first advisor in the yellow pages, this decision requires more time. Take the time to interview at least a few advisors before picking the best match for you. 3. Choosing an Advisor with the Wrong Specialty Some financial advisors specialize in retirement planning, while others are best for business owners or those with a high net worth. Some might be best for young professionals starting a family. Be sure to understand an advisor’s strengths and weaknesses - before signing the dotted line. 4. Picking an Advisor with an Incompatible Strategy Each advisor has a unique strategy. Some advisors may suggest aggressive investments, while others are more conservative. If you prefer to go all in on stocks, an advisor that prefers bonds and index funds is not a great match for your style. 5. Not Asking about Credentials To give investment advice, financial advisors are required to pass a test. Ask your advisor about their licenses, tests, and credentials. Financial advisors tests include the Series 7, and Series 66 or Series 65. Some advisors go a step further and become a Certified Financial Planner, or CFP. 6. Making Assumptions When They are Affiliated with a Reputable Brand An advisor might appear qualified and professional due to an association with a major firm like J.P. Morgan or Morgan Stanley. Working with an advisor from a reputable firm can lead to stability and better tools and information. However, choose an advisor because they are the best fit, not because of their branding. 7. Not Understanding How They are Paid Some advisors are "fee only" and charge you a flat rate no matter what. Others charge a percentage of your assets under management. Some advisors are paid commissions by mutual funds, a serious conflict of interest. If the advisor earns more by ignoring your best interests, do not hire them. Source: SmartAsset

Joe and Jo Ann Paszczyk, of Chicago, love unique travel adventures. Over the past decade, the couple has taken about 25 trips with educational organizations. “We have many interests—science, astronomy, history, nature,” says Joe, a former TV producer. Adds Jo Ann, a retired human resources manager: “These are not your normal souvenir shopping trips. You’re in small groups with curious people who like to learn.” In the past three years, they have gone on trips led by Chicago’s Field Museum to Madagascar, India and Tanzania. The expert guides “were always pointing out details that you would otherwise miss,” says Jo Ann. Like the Paszczyks, an increasing number of travelers age 50 and older want to combine learning more about a place or a passion with visiting new destinations. They are selecting trips sponsored by a university, museum or other nonprofit educational organization. Led by experts, from professors to scientists to museum curators, these trips offer special access, such as private tours of historic sites and in-depth lectures. “We have seen a healthy increase, with our programs doubling in size in the last five years,” says Karen Ledwin, vice president of product management at Smithsonian Journeys, which leads 300 trips a year on every continent. The vast majority of Smithsonian clients—90%—are age 50 and older. “These are travelers seeking enrichment. Sitting on the beach is not for them,” Ledwin says. On a Smithsonian Journeys trip to Italy, Jo Ann Paszczyk recalls her group getting a private tour of the Uffizi Gallery in Florence, on a day it was closed to the public, and a private night tour of Basilica di San Marco in Venice, including a special lighting of the ceiling’s Byzantine mosaics. While in India on a Field Museum trip, a field biologist pointed out tiger paw prints and explained what scientists learned from them. “It was a magical moment for me,” Jo Ann says. “It felt like I was driving into a page of The Jungle Book.” Says Erica Au, Field’s manager of donor relations and major and planned giving: “Traveling with our experts, who have spent their careers studying a topic and can explain it in a meaningful way, adds an extra level.” For example, in summer 2020, the museum will take its annual two-week safari to Tanzania, hosted by their manager for mammals. It costs about $11,000 per person plus airfare. The group will visit the Serengeti to experience the wildebeest migration. They will take game drives to see black rhinos, cheetahs, gazelles, flamingos and hyenas, including a nighttime game drive to see nocturnal mammals, such as genets. Get Smart With a Bevy of Travel Options With so many educational organizations offering trips, at every price point, and by land, rail and boat, the choices can be overwhelming. Even the New York Times has gotten into the act, leveraging its journalists as expert guides. These trips can run from one-day city tours to 15-day or longer luxury vacations, in categories including sports, history and culture. This year, cookbook author and NYT contributing writer Joan Nathan will lead an eight-day trip exploring Jewish food and heritage in Florence, Siena and Rome for $7,490 plus airfare. Highlights include a visit to Europe’s only kosher winery in Tuscany and an evening of music and food at the home of a Libyan Jewish chef in Rome. History buffs may want to check out a six-day trip led by foreign correspondents that explores the fall and rise of Berlin from the World Wars to today. The trip costs $5,595 per person plus airfare. If you feel strongly about saving the planet, you could consider taking a sustainable trip. The World Wildlife Fund offers about 80 “conservation travel” trips a year, which feature “sustainable travel that supports the protection of nature, wildlife and local communities,” says Jim Sano, the nonprofit’s vice president for travel, tourism and conservation. “We educate travelers about environmental and conservation issues, and all of our guides are trained by us in basic natural history.” Additionally, all emissions from trips are 100% carbon-offset. In July 2019, the organization is offering its first “Zero Waste Adventure,” a six-day trip to Yellowstone country for 14 guests, for about $5,700 plus airfare per person. The goal of the trip is to “fit all waste produced into a single container,” says Sano. Highlights include exploring the northwest sector of the Greater Yellowstone ecosystem and a stay at a safari-style luxury camp. Another good source of educational trips is alumni associations of universities and colleges. You don’t always need to be a graduate of the school to sign up. For example, in November 2019, Stanford University offers a two-week trip called “Unseen Japan,” led by a lecturer in international policy. At $9,695 per person plus airfare, the trip includes visits to temples in Kyoto, a tour of I.M. Pei’s Miho Museum and an overnight stay at an inn in the hot springs town of Matsuyama. These trips can be expensive, so compare what’s offered before you sign up. For example, does the price cover most meals and drinks, tips for guides and drivers, special excursions, and medical, accident and evacuation insurance? Also, check to see if a professional tour manager will accompany the group to handle logistics and iron out any problems. Smithsonian Journeys always sends its own experts, Ledwin says. Select a trip according to whether you seek an active adventure or a more leisurely pace, says Jo Ann Paszczyk. Most trips are rated by activity level. African safaris tend to be more sedentary because you sit in a vehicle all day, while other trips require a lot of uphill hiking. “We are clear on expectations,” says Au, of the Field Museum. “Our Mexico trip featured horseback riding and hiking uphill in altitudes over 10,000 feet. But our Greece trip was geared to anthropology and you are on a cruise ship with some walking during the day.” Another benefit to traveling with a local institution is that it often creates a bond between travelers and the organization that extends beyond the trip. “We’ve made some new friends and become more part of the Field community,” says Joe Paszczyk. To him and his wife, that’s a gift that keeps on giving. Source: Kiplinger    

When you’re choosing a health plan for the year -- whether you get coverage through your employer or on your own -- one option may be a high-deductible plan that makes you eligible to contribute to a health savings account. Weigh this option carefully. There are a lot of misconceptions about how HSAs work. Health savings accounts offer a triple tax break -- contributions aren’t taxed, the money grows tax-deferred, and it can be used tax-free for eligible medical expenses at any time. Here, we take a look at several of the most common HSA myths -- and the reality. Myth: You Must Use HSA Money by Year-End This is the biggest misconception about HSAs. Unlike flexible spending accounts, HSAs have no use-it-or-lose-it rule. You can use the money tax-free to pay eligible medical expenses at any time. The money can pay current medical expenses -- such as your insurance deductible, co-payments for health care and prescription drugs, and out-of-pocket costs for vision or dental care -- but you’ll get the biggest tax benefit if you keep the money growing in the account and withdraw it for medical expenses much later, such as in retirement. You can withdraw HSA money tax-free, for instance, to pay Medicare Part B, Part D and Medicare Advantage premiums after you turn age 65. Most HSAs let you invest the money in mutual funds for the long term. Myth: You Can Only Get an HSA Through Your Employer Although many employers pair an HSA with a high-deductible health insurance plan, anyone with an HSA-eligible health insurance policy can contribute to an HSA. (HSA-eligible policies must have a deductible of at least $1,350 for single coverage or $2,700 for family coverage in 2019.) Many banks and other financial institutions offer health savings accounts. You can find HSA administrators at www.hsasearch.com, where you can compare fees and investing options. If your employer does offer an HSA, however, that’s usually your best option because many employers contribute money to employees’ HSAs (an average of $500 per year for individuals and $1,000 for families), and employers tend to cover most of the fees for employees’ HSAs. Also, contributions made through payroll deduction are pre-tax, avoiding federal and Social Security taxes. If you contribute to an HSA on your own, your contributions are tax-deductible. Myth: You Can’t Use Money in the HSA After You Sign Up for Medicare You can’t make new contributions to an HSA after you enroll in Medicare, but you can continue to use the money that’s already in the account tax-free for out-of-pocket medical expenses and other eligible costs that aren’t covered by insurance, such as vision, hearing and dental care and co-pays for prescription drugs. You can also take tax-free withdrawals to pay a portion of long-term-care insurance premiums based on your age, ranging in 2018 from $410 if you’re 40 or younger to $5,110 if you’re 70 or older. And after you turn 65, you can use HSA money to pay premiums for Medicare Part B, Part D or Medicare Advantage. You can even withdraw money from your HSA to reimburse yourself if your Medicare premiums are paid directly out of your Social Security benefits. “You just need to keep your payment notification from Social Security in your tax records, and you can reimburse yourself dollar for dollar,” says Steven Christenson, executive vice president at Ascensus, a benefits consultant. Myth: You Can’t Contribute to an HSA After You Turn 65 Eligibility to make HSA contributions stops when you enroll in Medicare. That’s not necessarily when you turn 65. Some people who keep working for a large employer at age 65 choose to delay signing up for Medicare Part A and Part B so they can continue to contribute to an HSA (especially if their employer contributes money to the account, too). However, you can only delay signing up for Medicare at 65 if you have health insurance from a current employer (or if you have coverage through your spouse’s employer); the employer generally must have 20 or more employees. Otherwise, you generally have to sign up for Medicare at 65. If you are eligible to delay signing up for Medicare, be sure to enroll within eight months of losing your employer coverage so you won’t have a late-enrollment penalty. You can make pro-rated HSA contributions for the number of months before your Medicare coverage takes effect. If you sign up for Medicare Part A after age 65, your coverage takes effect retroactively six months before you enrolled. Myth: You Must Get Permission From HSA Administrators to Withdraw Money Unlike with an FSA, which usually requires you to gather receipts and get permission from the administrator to make withdrawals, you can withdraw money from your HSA whenever you want. Many HSAs have debit cards that make it easy to use the account for eligible expenses, but you can also withdraw money on your own and keep the records in your tax files to prove that the withdrawals should be tax-free. “FSAs require the administrator to substantiate the claim, but with HSAs, there is no substantiation requirement -- you just have to keep the receipts,” says Steve Auerbach, CEO of Alegeus, which provides technology for HSAs. Myth: You Must Use HSA Funds Within a Certain Time Period After You Incur Medical Bills One quirk of the HSA rules is that there’s no time limit for using the money after you incur an expense. Say you have knee surgery and pay a $1,000 deductible in cash. As long as you had the knee surgery after you opened an HSA, you can withdraw that $1,000 tax-free from the account anytime -- even years later. You just need to keep track of your receipts for the HSA-eligible expenses. Many HSA administrators make it easy to import medical claims-payment records from your health insurance to your HSA and keep track of whether you paid the bill with your HSA or with cash. “We store all of those claims and receipts for you. If, say, in two years you want to take the money out, it can come out tax-free because you’ve already incurred those expenses,” says Auerbach, of Alegeus. Myth: You Can Only Invest the HSA Money in a Savings Account HSAs have savings accounts, so you know the money will be there if you plan to use it for current expenses. But many HSA administrators also let you invest the money in mutual funds for the long term. The fees and investing options vary a lot by company -- some offer low-cost funds from Vanguard, Fidelity and other well-known fund companies. You can compare fees and investing options at www.hsasearch.com. Some HSA administrators charge extra fees unless you maintain a minimum balance. Myth: Your Spouse and Kids Can Only Use HSA Money If Covered by Your Health Plan The rules for contributing to an HSA are different than they are for using the money. For 2019, you can contribute up to $3,500 to the account if you have health insurance coverage on you only or up to $7,000 if you have family coverage. You can also contribute an extra $1,000 if you’re 55 or older. But no matter whether you have individual or family health insurance coverage, you can use the HSA money tax-free for qualified medical expenses for yourself, your spouse and your tax dependents -- even if those family members are covered under a different policy, says Roy Ramthun, CEO of HSA Consulting Services. Myth: You Can’t Use the HSA After You Leave Your Job Here’s another way that HSAs differ from FSAs: You can keep the HSA even if you leave your job. You can usually maintain the HSA through the current administrator or roll it over to a different one (similar to an IRA rollover). And if you have an HSA-eligible high-deductible policy -- whether through a new employer or on your own -- you can continue to contribute to the HSA. Myth: It Doesn’t Make Sense to Have an HSA-Eligible Policy If You Have a Lot of Medical Expenses Some people are reluctant to choose a high-deductible health insurance policy if they have a lot of medical expenses. But you need to do the math and compare the overall costs. In some cases, the premium savings by choosing the high-deductible policy rather than a lower-deductible plan may cover most of the difference in the deductible. And if you have employer coverage, your employer may contribute to your HSA to help close the gap. The employer contribution is generally seed money rather than a match. Many employers deposit a fixed amount of money into the account at the beginning of the year for anyone who has an HSA-eligible policy, says David Speier, managing director of benefits accounts at Willis Towers Watson, a benefits consultant. Add up the difference in premiums, deductibles and other out-of-pocket costs for your regular medical expenses, as well as any employer contribution, when deciding on a policy. Many employers are introducing decision-making tools to help with the calculations, says Speier. Source: Kiplinger