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Leave these 8 items at home If we lose our wallet or have it stolen, the cash inside may be the least of our worries. One survey shows that 62% of people have had their wallets or purses lost or stolen. If you carry all types of identification, documents, and cards, you may learn firsthand about the nightmare of identity theft.  Identity theft is on the rise, increasing by over 67% in just a couple of years. With that in mind, think about what you carry around with you most days. If you don’t really need it that day, it’s better to leave it at home in a fireproof safe than to risk losing it. Here are eight items you should not keep in your wallet. 1. Social security card Carrying around a social security card in your wallet is one of the worst offenses - and many of us do it. Once a thief has your social security card, there are unlimited ways they can use your identity to make life more difficult. In addition to not carrying around your social security card itself, don’t write the number down on a piece of paper that you carry in your wallet. Thieves know what it is. 2. Passport and passport card Passport Granted, there are times when there is no way around carrying a passport. If you are traveling to another country, you need to have it with you. But once you arrive, carry a copy and put your original in the hotel safe. Make sure you are staying in a hotel where the safe is secure. If you lose your wallet with your passport inside, identity thieves can use it to have a social security card made in your name, to open bank accounts, or even to attempt travel. Passport card A passport card is smaller than a passport and fits in your wallet. It can be used as identification for domestic flights and to enter the United States at land border crossings and ports of entry by water from Mexico, Canada, Bermuda, and the Caribbean. It’s often used by people who must cross the border frequently.  If you lose your passport card, identity theft is as much of a risk as it is with passports. If you don’t need it on a particular day, leave it at home in the safe. 3. Excess credit and debit cards Many of us have multiple credit and debit cards, but usually, we don’t use them all every day. If you lose your wallet or someone steals it, you must immediately contact all those financial institutions and cancel the cards.  Not only is this time-consuming, but it can leave you without any payment methods while yours are replaced. Better to leave no more than two in your wallet and keep the rest safely at home if you don’t plan to use them. Make photocopies of all your cards and leave them in your safe at home. If the worst happens, you still immediately have the numbers and information you must have to cancel your cards. 4. Password cheat sheet Even in this age of safe password managers such as LastPass, many people write their passwords down on a password cheat sheet. Only 24% of people use password managers. If you really feel you need a written password cheat sheet, at the very least keep it in a secure location at home. The last thing you should do is put a copy of it in your wallet.  If a thief gets hold of your wallet, they would have instant access to your financial information, among other sensitive accounts.  Our advice is to get rid of the cheat sheet altogether and start using a reliable password manager. And of course, you want to have many unique passwords rather than using the same one over and over. 5. Extra keys You may have a habit of keeping an extra home or office key in your wallet “just in case.”  Since you are likely carrying identification that includes addresses, the finder or thief may let themselves into your place and help themselves to your belongings - or worse. Reduce the risk of burglary by giving your extra key to a trusted friend or family member rather than carrying it in your wallet. 6. Blank checks Back in the day, everyone carried around a checkbook or a few blank checks in their wallet. If you still use checks, you would be far better off leaving them at home unless you have a specific plan to use one that day. If a thief gets hold of one of your blank checks, they could conceivably withdraw all the money you have in the account. Even if they are unable to do that, they can still get your bank account information and routing number from a check (and often, your home address!).  7. Gift cards and excess cash Some people routinely store gift cards in their wallets in case they want to use them when they are out. This is no big deal for $4 off at Starbucks. But should you have gift cards of significant value, keep them at home until you plan to use them. Otherwise, a thief can use the cards as though they were cash. And speaking of cash, avoid carrying around a big wad of money. If you aren’t going to spend it that day, keep it in the bank or your safe at home. 8. Multiple receipts Many of us have a habit of jamming receipts into our purses and wallets, leaving them there for months. If you paid with a credit or debit card, a receipt may show the last numbers of your card.  Should these receipts fall into the hands of a professional, they may be able to use those numbers, the name of the vendor, and other information in your wallet to phish for the rest of the card number. Try to get into the habit of emptying your wallet or purse of receipts at the end of the day. Keep those that are important in a physical safe or secure digital location. Shred the rest. Call us to discuss more ways to reduce your financial risk The risks go far beyond what not to carry in your wallet. If you’re concerned with reducing your financial risks, contact a certified financial advisor in LaCrosse to discuss the best ways to secure your future.  Call us at (608) 782-0200 in LaCrosse. Our Eau Claire financial advisors can be reached at (715) 834-9512, and our Green Bay financial advisors are available at (920) 434-2192. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin. Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security. Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses. Please do not send orders via email as they are not binding and cannot be acted upon. Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services. Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

It’s no surprise that consumers buy gifts for their significant others on Valentine’s Day, but a new survey shows that many are spending more on their pets, family members and friends. The Valentine’s Day shopping season is stronger than ever, according to an annual survey by the National Retail Federation, a retail trade association, and market research firm Prosper Insights & Analytics. The survey of 7,267 adults found that consumers expect to spend an average of $196.31 this holiday, up 21% from last year’s record of $161.96. Overall spending for Valentine’s Day is projected to reach a record $27.4 billion, which would be up 32% from last year’s record of $20.7 billion. Valentine’s Day not just for romance The additional money isn’t necessarily being spent on romantic partners. In fact, pets may be one of the biggest recipients of the increased Valentine’s Day spending, as 27% of consumers said they will spend money on their pets for Valentine’s Day, up from 17% in 2010. While consumers spend, on average, 52% of their Valentine’s Day budget on spouses and significant others, that percentage is down from 61% 10 years ago. In that same time period, the share of the Valentine’s Day budget spent on co-workers has risen from 3% to 7%. The share of the budget spent on Valentine’s Day gifts for pets has doubled from 3% to 6%. Survey respondents said they expected to spend, on average: $101.21 on significant others, up from $93.24 last year $30.19 on family members other than spouses, up from $29.87 last year $14.69 on friends, up from $9.78 last year $14.45 on their children’s teachers and classmates, up from $8.63 last year $12.96 on co-workers, up from $7.78 last year $12.21 on pets, up from $6.94 last year $10.60 on others, up from $5.72 last year The biggest spenders will be those between ages 35 and 44, who expect to put down $358.78 for Valentine’s Day. That’s followed by those between ages 25 and 34, who expect to spend $307.51, and those between ages 18 and 24, who expect to spend $109.31. Men plan to outspend women $291.15 to $106.22. Consumers expect to spend the most money ($5.8 billion) on jewelry, followed by: $4.3 billion on an evening out $2.9 billion on clothing $2.4 billion on candy $2.3 billion on flowers $2 billion on gift cards $1.3 billion on greeting cards While Valentine’s Day may be a great time to show the people (and pets) who mean a lot to you how much you care, make sure you follow common-sense money rules. For example, take the time to create a Valentine’s Day budget before you start spending money. Not only might you end up spending less, but you may less likely experience shopper’s guilt after Valentine’s Day is over. Source: Yahoo Finance 

Get out your pencils and calculators: The IRS has released a breakdown of what’s ahead for 2020 taxes. Taxpayers who’ve been paying close attention will notice that the Tax Cuts and Jobs Act overhauled the tax code. Those sweeping changes include a higher standard deduction — it’s now $12,400 for singles and $24,800 for married joint filers in 2020. Following the overhaul, individual income tax rates also went down, and personal exemptions were eliminated. For the 2020 tax year, the IRS tweaked the individual income tax brackets, adjusting them for inflation. See below for your new bracket. The additional standard deduction for older taxpayers and those who are blind are still available. Filers who are blind or aged 65 and over can claim $1,300. Two married filers who are both over 65 can claim $2,600, unchanged from 2019. Single filers who are blind or over 65 are eligible for a $1,650 additional standard deduction. This is up $50 from 2019. Your Retirement Savings The taxman is also allowing you to save a few more dollars in 2020 taxes. The IRS has raised the employee contribution limit for 401(k), 403(b) and most 457 plans to $19,500, up from $19,000 in 2019. If you’re 50 or older, you can sock away another $6,500 in that workplace retirement plan. That’s up from $6,000 in 2019. The contribution limit for individual retirement accounts, whether traditional or Roth, is holding steady at $6,000, plus another $1,000 for savers 50 and over. The IRS limits high-income earners’ ability to make direct contributions to Roth IRAs — accounts in which you can save after-tax dollars, have the money grow tax-free and use it in retirement free of taxes. In 2020, if your adjusted gross income exceeds $124,000 and you’re single ($196,000 for married couples filing jointly), you won’t be able to make a full contribution directly to a Roth IRA. Instead, those savers might consider using a strategy known as the “backdoor Roth,” where they make a nondeductible contribution with after-tax dollars to a traditional IRA and then convert it to a Roth. Health Care Savings If you choose a high-deductible plan during the open enrollment season, you might have access to a health savings account. These accounts allow you to put away pre-tax or tax-deductible money and have it grow free of taxes. You can take a tax-free withdrawal to cover qualified health expenses. In 2020, you can save up to $3,550 if you’re an individual with self-only health coverage. That’s up from $3,500 in 2019. Account-holders with family plans can save up to $7,100 in this account (up from $7,000 in 2019). HSAs differ from health-care flexible spending accounts primarily in that you can rollover the HSA balance from one year to the next. Health-care FSAs generally must be used by the end of the plan year. The IRS also bumped up the amount you can save in a health-care FSA: It will be $2,750 in 2020, up from $2,700 in 2019. Your Estate and Gift Taxes The Tax Cuts and Jobs Act also nearly doubled the amount that decedents could bequeath in death — or gift over their lifetime — and shield it from federal estate and gift taxes, which are 40%. Before the tax overhaul, this so-called gift and estate tax exemption were $5.49 million per person. For 2020 taxes, the lifetime gift and estate tax exemption will be $11.58 million per individual, up from $11.4 million in 2019. Finally, the annual gift exclusion — the amount you can give to any other person without it counting against your lifetime exemption — will hold steady at $15,000 for 2020. Source: CNBC

Wherever you're heading, if you're traveling during the holiday season, you need to realize that everyone else in the world is, too. But don't let invasive security scanners, terrible drivers and long lines at the airports get you down. We're giving you tips to survive the holiday travel season without a Frosty the Snowman-size meltdown. 1: Do Your Research Plan alternative trips if traffic makes your way home too overwhelming. Is there a scenic drive that might be longer but have less traffic? Break up a long drive by finding a few places to stop that will get the kids more excited than a truck rest stop. When flying, make sure you check the airline's restrictions ahead of time on carry-on luggage and fees for checked bags. 2: Stay Connected Stock up on the latest travel apps before you leave home. GateGuru gives you approximate times you'll spend in security. Heading out on the road? Find the cheapest gas and cleanest bathrooms on the road with GasBuddy and SitOrSquat. 3: Pack Light Avoid checking bags altogether if you can. You won't have to wait for your luggage on the conveyor belt, and you won't have to worry about your mom's Christmas present getting lost in the Airport. If you do check luggage, make sure you have all your medications, important documents and a change of clothes in your carry-on just in case your luggage gets lost.  4: Pack Earplugs Short of doing yoga in the airport, the best way to mentally escape your stressful holiday travel surroundings is to turn the volume down. And the easiest way to do that is with earplugs. Crying baby next seat over on the plane? Earplugs. Sister's music in the car driving you mad? Earplugs. And if you really want to check out for a bit? Bring an eye mask (as long as you aren't driving). 5: Don't Get Hangry When your tummy growls, your mind can't think straight, and you could unknowingly get in the wrong line, take the wrong turn, or worse, upset an innocent flight attendant. Pack snacks and drinks, so you and your family will be fueled up for a road trip. If you're flying, definitely get some grub before you board the plane, so you won't have to rely on airline food if you're sitting on the tarmac for hours. 6: Ship Gifts or Give Gift Cards TSA suggests to ship wrapped gifts or wait until you reach your destination to wrap them, as they might have to unwrap a present to inspect it. Ship gifts ahead of time or bring the gift that can't go wrong: gift cards to their favorite store or an Amazon card. 7: Travel on Off-Peak Days The Wednesday before Thanksgiving is the biggest travel day of the year and can also cause you the biggest meltdown of the year. A better option is to leave early on Thanksgiving Day and avoid the record traffic the night before. Same goes with flying: If you fly on the actual holiday itself you’ll be avoiding the long lines and hoards of travelers. 8: Travel Early or Late in the Day Flight statistics show that planes traveling earlier in the day have a better on-time performance. And if your flight is canceled, you will have the option of taking a flight later in the day. Also, there will be fewer lines at security. Best time to hit the road? When everyone else is asleep — early morning or late at night. You can always take a nap when you arrive at your destination or on the ride there (if you aren’t the driver, of course). 9: Plan for the Unexpected Have only a half-hour before connecting to another flight? Traveling to Rochester, N.Y., during snow season? Think ahead and plan accordingly. Leave extra time before flights to deal with security, extra time between connections and, for road trips, pack tire chains for snowy conditions, flashlights, and of course, a few bandages never hurt either. 10: Inhale and Exhale The overly friendly person next to you on the plane, the canceled flights, the luggage that fell off in the middle of the highway? All of it will make for great stories over dinner when you finally make it to your destination. After all, holiday travel stress is just as much of a tradition as pumpkin pie and regifting. Source: Travel Channel  

The holiday season can be a stressful time as consumers ramp up their spending on gifts and travel and face extra bills in the new year. Shoppers are planning to spend an average of $1,047.83 this year, which is a 4% increase from last year, based on the survey conducted by the National Retail Federation, a Washington, D.C.-based trade group, and Prosper Insights & Analytics. Consumers 35 to 44 years old are likely to spend the most during the holiday season, at a total of $1,158.63. Shoppers will spend the most money on gifts for their friends, family, and co-workers at an average of $658.55. They plan to also purchase greeting cards, decorations, candy, and food, totaling an average of $227.26. Consumers said they will spend another $162.02 on sales and deals during the season. Here are eight tips on how you can save money during the holiday season so you can enjoy them and spend less time worrying about those credit card bills. 2019 Holiday Budgeting Tips  1:  Secret Santa Instead of buying all of your family and friends gifts for the holidays, start a Secret Santa. Being surprised is more fun and you will spend less money. Ron McCoy, CEO of Freedom Capital Advisors in Clermont, Florida, is trying it out with his family for the first time this year. "It's ridiculous for people to go out and spend money they don't have just because our culture is to spend, spend, spend," he said. "My young adult children love the idea of not spending a fortune this Christmas. I still believe it's the thought that counts, not how much you spend." 2: Shop Online Avoid shopping at the mall or at shopping centers because you are more prone to spontaneous purchases or deals that seem to be too good to pass up. You can also save money on parking and tolls. When you're shopping online, watch out for hidden costs associated with shipping, said Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a Washington, D.C.-based non-profit organization. "The sale price of the item may be unbeatable, but some merchants pack in high shipping costs that could erase most of the savings," McClary said. Shopping online means you can avoid the madness of trying to find a coveted parking spot, avoid the rush of the crowds and buying mania, said Daren Blonski, managing partner of Sonoma Wealth Advisors in Sonoma, California. "Online shopping allows you to control your spending and not get sucked into those last-minute 'have-to-have' purchases. Although, watch out for those nasty pop-up ads in your social networking feeds." 3: Make a List Shoppers who make a list of gifts to purchase are more likely to not exceed their budget. "Plan ahead to avoid any surprise expenses that could drain your savings or lead to unmanageable debt," McClary said. "This means making a complete list and sticking with your plan. The list should be based on what you can afford without interfering with necessary living expenses or existing debt obligations." 4. Give Gifts of Service If you cannot afford gifts for everyone on your list, another option is to provide gifts of services like babysitting or dog sitting. "It can be anything that shows you care and has value while not costing you a lot of money," said Jim Triggs, CEO of Money Management International, a Sugar Land, Texas-based non-profit debt counseling organization. "You can make baked goods or make inexpensive crafts to give away as gifts. Print out some of the pictures of you and your loved ones that you may have on your phone. This can be inexpensive and a very thoughtful gift." 5. Regift Holidays don't have to set you back, put you into debt or a financial crisis, Triggs said. If you receive a gift that you do not want or need and you know a friend or family member would enjoy the gift, don't "feel bad about regifting it if you're on a tight budget," he said. "Most friends and family do not want to see their loved ones going into debt during the holiday season," Triggs said. 6. Use Reward Points and Miles  Instead of shelling out your hard-earned money, a good way to save money is to examine your existing rewards points and miles. Bankrate.com recently asked people how many they had and while many people didn't know, the ones who kept track had impressive stockpiles, said Ted Rossman, an analyst for Creditcards.com and Bankrate. Even at a conservative valuation of one cent per point or mile, Bankrate found the average frequent flyer account balance is worth about $340, the average hoard of hotel points equals approximately $230 and the average credit card rewards stash is $160. "You might already be sitting on a considerable amount of value that you could turn into free or discounted travel, cash back, gift cards or merchandise," he said. 7. Shop Through Credit Card and Airline Portals Consumers can also save hundreds of dollars by shopping through credit card and airline portals during the holiday season. "This is an excellent double-dip opportunity," Rossman said. "Whenever you buy something online, don't go directly to that retailer's website." Instead, log into a website like the Chase Ultimate Rewards portal, the American Airlines AAdvantage eShopping mall or Rakuten. These examples all allow you to earn bonus points or cashback. "Pay with the right rewards credit card for an added boost," he said. "For example, if you click through the American Airlines, you'll get eight AAdvantage miles per dollar plus whatever you earn from your credit card company. A good choice would be the Chase Freedom, which offers 5% cashback at department stores this quarter." 8. Treat Yourself Give yourself some leeway to spend on things you don't anticipate, Blonski said. "Just like when you're trying to live on a diet, it seems to help when you allow for a little 'cheat meal,' -- it takes the drudgery out of the process," he said. "If it's a planned frivolous spend, you don't have to shame yourself for it." Source: The Street

Even though many Americans are worried about the possibility of a recession, most are still planning to purchase holiday gifts. Check out our 2019 holiday shopping report below. Not much — including unease about the nation’s economy —  stands in the way of holiday shopping in the U.S. Over 223 million Americans (88%) plan to purchase gifts this holiday season, spending an estimated $184 billion, even as many believe we’re bound for a recession, according to a new NerdWallet survey. Nearly 2 in 5 (37%) Americans believe the U.S. is headed toward a recession. Three of 10 holiday shoppers (those planning to shop for gifts during the 2019 holiday season) — or 66 million Americans — say they’ll spend less due to their perception of the current state of the economy, according to a NerdWallet survey of 2,023 U.S. adults, conducted online by The Harris Poll. “For most Americans, the urge to spend at the holidays is strong, even in the face of economic uncertainty. But there are ways to spend and celebrate the season without creating additional financial stress at home,” says Kimberly Palmer, personal finance expert at NerdWallet. Holiday Shopping Key Findings Economic perceptions will affect holiday spending. Nearly two in five (37%) Americans say the U.S. economy is headed toward a recession, and 30% of those planning to purchase gifts this holiday season say they’ll spend less because of their view of the current economy. Higher prices expected. Nearly half (48%) of Americans believe holiday gifts will cost more this year compared with years past as a result of new tariffs on imports from China. Millions still paying off 2018 holiday debt. Roughly 48 million Americans are still paying off credit card debt from the 2018 holiday season, far more than the 39.4 million who were paying off 2017 debt when we asked last year. Planned spending up slightly. Holiday shoppers plan to spend $825 on gifts, on average, this season, a 6% increase over 2018. With 88% of Americans planning to shop for gifts, that’s roughly $184 billion in 2019 holiday spending. Credit cards and digital wallets poised and ready. Just over 7 in 10 (71%) holiday shoppers plan to use a credit card on gift purchases this year, and 32% will use digital wallet apps. Midsummer sales a big draw for early holiday shoppers. Nearly 1 in 5 (18%) 2019 holiday shoppers completed most of their holiday shopping during midsummer sales. Many Will Spend Less Due to Their View of the Economy Mixed messages about the economy lead to mixed opinions. Nearly 2 in 5 (37%) Americans say the U.S. economy is headed toward a recession, according to the survey, while 43% say the economy is currently stable and about 1 in 5 (19%) characterize it as “booming.” But perhaps more important than their perception is how it could affect shoppers’ holiday spending this season — healthy consumer spending is a boon to the economy. While over half (60%) of holiday shoppers say their perception of the economy will not affect how much they spend on gifts this year, 3 in 10 (30%) say they’ll spend less because of it. For perspective, that’s 66 million Americans who are tightening their purse strings in response to their perception of the economy. Further, many indicate they believe the money spent on gifts won’t go as far — 48% of Americans believe holiday gifts will cost more this year compared with years past as a result of new tariffs on imports from China. Women are more likely than men to believe the U.S. economy is headed toward a recession (42% vs. 32%). And female holiday shoppers are more likely to say they plan to spend less this year because of their perception of the economy (36% vs. 24% of male shoppers). Millions Still Paying Off 2018 Holiday Debt Nearly 3 in 5 (59%) 2018 holiday shoppers incurred some credit card debt during the 2018 holiday season, and 35% of those who did say they’re still working to get it paid off, according to the survey. That’s 48 million Americans still paying off credit card debt from the 2018 holiday season. Last year, when we asked the same question, 28% of 2017 holiday shoppers were still paying off debt from the 2017 holiday season. Only 24% of those who incurred credit card debt from last year’s holiday shopping paid it off with the first statement. “The fact that holiday spending is sending more people into long-term debt suggests overspending is endemic to the season. Unfortunately, it can drag down a household’s finances long after the gifts are opened,” Palmer says. Savvy Holiday Shopping Tip:  If holiday debt is an annual tradition, start a new one. Every year, begin saving for holiday shopping several months in advance, so you can pay outright when it’s time to shop or pay off any credit card transactions with the first statement. Planned Spending Still Up from Last Year Even with some saying they’ll spend less this year, overall anticipated spending is up, albeit slightly. On average, 2019 holiday shoppers plan to spend $825 on gifts this season, 6% more than last year. With 88% of Americans expecting to shop for gifts, the economy could get a $184 billion infusion. Like last year, Generation X is planning to spend the most on holiday gifts, but they anticipate spending less, on average, than last year, when they estimated they’d fork over $992. Most Shoppers Plan to Use Credit Cards Despite the fact that some 2018 holiday shoppers are still in debt from last year, 71% of 2019 holiday shoppers are poised to use their credit cards this holiday season, according to the survey. On average, they anticipate charging $660 of their gifts and estimate they’ll take 3.7 months to pay off that balance. At that rate, they’ll pay roughly $22 in interest over that nearly four-month period, according to NerdWallet analysis. If, however, they make only minimum payments on the debt, it could cost them $239 in interest and take nearly four years to pay off. Savvy Holiday Shopping Tip:  “Instead of taking on debt into the new year, use credit cards strategically at the holiday season by paying off your balance each month and accruing cashback or points to help stretch your holiday budget. You can use your rewards for holiday travel, to buy gift cards, or as cash to help fund other expenses,” Palmer says. Taking Steps to Save Fewer Americans plan on using coupons and promo codes to save on shopping, in general, this holiday season than last (48% vs. 54%), but that doesn’t mean holiday shoppers aren’t looking for a deal. Nearly 1 in 5 (18%) 2019 holiday shoppers completed most of their holiday shopping during midsummer sales, according to the survey, and about 7 in 10 (71%) Americans plan to shop on Black Friday, one of the biggest deal days of the year. Savvy Holiday Shopping Tip:  ”Tracking prices and making purchases when they dip, whether it’s months before the holidays or at the last minute, can help stretch your budget,” Palmer says. “Apps like ShopSavvy and browser add-ons like Honey can help you get the best price.” Most Will Shop Online, Some to Pick Up In-Store Though NerdWallet began asking shoppers in 2016 whether they’d be in-store or online for most of their holiday shopping, this marks the first year we asked about ordering online for in-store pickup. More than 1 in 10 (11%) holiday shoppers say they plan to order online and pick up in store for the majority of their shopping while half (50%) will order online for delivery and 37% will do the majority of their shopping in-store. One-quarter (25%) of those who plan to shop on Black Friday this year say they’ll order online for in-store pickup vs. 60% who plan to order online for delivery and 50% who will shop in-store on that day. What and Whom Shoppers will Spend On When asked what categories they’ll be spending the most on this year, the top one 2019 holiday shoppers cite is clothing and accessories (58%). Gift cards were a close second, with 52% saying they’d spend the most on gift cards and leave the gift-buying to the recipient. “Gifts cards tend to be most appreciated, and most likely to be used when they are given to a store or a restaurant that the recipient already frequents and enjoys. If you’re not sure, then cash might be a better choice, and there’s less of a chance it will go to waste,” Palmer says. Some shoppers may be busting their budget to create a special holiday season. Just 8% of those who ever shop during the holidays say they don’t splurge on anyone during the season, according to the survey.  “There’s nothing wrong with splurging a little at the holidays, but make sure that splurge fits into your broader spending plan so you start 2020 feeling more confident about your finances,” Palmer says. Source: NerdWallet  

Getting your finances ready for the end of the calendar year takes time, so it’s wise to start thinking about your financial to-do list now. Since most year-end financial planning opportunities have firm deadlines—often December 31st—acting now can help ensure you don’t leave money on the table. It’s not all upside though: failing to take certain actions can mean hefty penalties in some cases. Financial Planning 1:Check Your Tax Withholding Even individuals with only W-2 income from a regular paycheck can be caught off guard by a surprise tax bill and/or an underpayment penalty. That's why it's important to start your financial planning. After the new tax law went into effect in 2018, the withholding tables changed, leaving some taxpayers with a big bill. Estimating your annual income at the beginning of the year can be difficult for individuals with lumpy or unpredictable income, such as business owners or employees working on commission. Recalculating your withholding using the IRS withholding calculator closer to the end of the year could help some workers avoid an underpayment penalty or surprise tax bill come April. Here’s how: if taxes are withheld through a payroll deduction, those tax payments are always deemed to be timely paid. This enables some individuals to catch up on any previous under-withholding once they have more concrete income estimates near year-end. If you make quarterly tax payments instead, be aware that even if you increase estimated tax payments during the year, it may still not be enough to avoid penalties if any previous payments are deemed to have been 'underpaid' based on your actual income at the end of the year. To avoid an underpayment penalty, taxpayers can make quarterly payments of at least 110% of last year's tax liability (if their adjusted gross income is over $150,000).   Financial Planning 2: Consider Refinancing a Mortgage or Student Loans Interest rates have generally been on lower this year due to the uncertainty around the trade war and rate cuts by the Federal Reserve. If you’ve been putting off the decision to refinance a mortgage or student loans, now may be the time to start planning. Before reaching out to a lender, there are several considerations to be aware of. Mortgages As you move through your fixed mortgage term, the proportion of your monthly payment that’s allocated to the principal will increase and your interest expense will decrease. If you’re well into your loan, it may not make sense to refinance after considering closing costs. Also, consider whether it’s beneficial to refinance into a different type of mortgage. If you bought a home with an adjustable-rate mortgage because you didn’t expect to own the house for very long, but now your plans have changed, it may make sense to switch to a conventional fixed 15 or 30-year mortgage. Alternatively, if you’re 10 years into a mortgage and decide to refinance, consider the pros and cons of an adjustable-rate mortgage (ARM) if you’re planning to sell before the interest rate becomes variable. Just keep being aware of the risks should your plans change. Student Loans Graduates with significant student loans can sometimes find relief by refinancing. Assuming your income and credit score is strong, it can be possible to shave a few points of your rate. Be aware that refinancing student loans may require a shorter loan period, even as little as five years. Refinancing from a federal loan to private lenders can also mean sacrificing some benefits, such as loan deferment, forbearance, and loan forgiveness (for those who qualify). If you have multiple loans, you can always consider refinancing only the ones with the highest interest rates, to help make it more affordable given the truncated payback period. Financial Planning 3: Give Your 401(k) a Checkup This is an easy one to forget in your financial planning goals. Often enough we set it and forget it…but it's great to check it at least once a year! This fall spend some time making sure your 401(k) plan is properly configured. If you’re not already on track to meet the annual contribution limit and are able to, consider increasing your election while there’s still time. In 2019, the maximum is $19,000/year though investors age 50 and older have an additional $6,000 catch-up contribution. Once the 2020 IRS contributions have been announced, you’ll want to update your contribution strategy for next year. Also, review the 401(k) investment options as the fund lineup will change periodically. Assuming you are comfortable with your asset allocation, make sure your account doesn’t need to be rebalanced. Periodic rebalancing helps maintain your target asset allocation over time as some asset classes will outperform others. Financial Planning 4: Plan Charitable Contributions Two of the major changes in the Tax Cuts and Jobs Act that passed at the end of 2017 was the near doubling of the standard deduction and new $10,000 cap on state, local, and property taxes (SALT). The result is that far fewer taxpayers benefit from itemizing their tax deductions, which includes cash gifts to qualified charities. Due to these changes, other strategies have become more popular to help ensure charitably inclined individuals can still benefit from their gifts. If you give cash, consider whether it’s advantageous to ‘bunch’ cash donations in one tax year instead of spreading them out equally over two. For example, a couple has $10,000 in state, local, and property taxes (the maximum), $5,000 in mortgage interest expense, and $8,000 in cash donations to qualified public charities for a total of $23,000 in itemizable deductions. In 2019, the standard deduction for married taxpayers filing jointly is $24,400, so the couple will not benefit from itemizing their tax deductions. If the couple bunched their charitable contributions, they’d make a gift of $16,000 in 2019, bringing their itemized deductions to $31,000, well over the standard deduction. In 2020, they would make no cash gifts to charity and claim the standard deduction. Considering the changes to itemized deductions, it may be advantageous to consider which charitable giving strategies offer the best tax benefits. Other planned giving strategies, including donating highly-appreciated securities and gifting a required minimum distribution, may be advantageous over cash gifts. Financial Planning 5: Watch the Timing of 529 Plan Distributions The end of the calendar year is also a break between college semesters. Before the new semester begins in January, colleges send out tuition bills for parents and students to pay. Here’s where problems can occur: if you take funds from a 529 plan in December for a tuition bill paid in January, a portion of your 529 plan funds could be classified as a non-qualified distribution and potentially subject to income tax and a 10% penalty if total 529 plan withdrawals for the year were more than the qualified higher education expenses paid. Since the calendar year, qualified expenses must align to the calendar year 529 plan withdrawals, issues could also arise if a distribution was made in January to cover expenses paid in December. There’s a lot to keep in mind, so consult the financial aid office to help ensure you’re using the appropriate expense figures and not double-counting any tax benefits, such as the American Opportunity Tax Credit, Lifetime Learning Credit, or expenses covered by tax-free scholarships.  Financial Planning 6: Flexible Spending Accounts: Use it Before You Lose it There are two types of flexible spending accounts (FSAs) your employer can sponsor medical and dependent care. With a medical FSA, you can pay for (or get reimbursed for) certain qualifying medical expenses using pre-tax dollars. Since your annual FSA election was based on your projected medical costs for the year, over-contributing is common. Depending on the plan rules, your medical FSA must either be fully depleted during the calendar year or up to $500 can be rolled over to next year. Otherwise, your contributions will be forfeited. In a dependent care FSA, pre-tax contributions can be used to reimburse parents for qualified childcare expenses that are incurred to enable you (and a spouse, if married) to work, look for work, or enroll in school full time. Although there are instances where adults can be claimed as a dependent, for most, qualified dependents are your children under age 13. The contribution limit in 2019 is $5,000 for married taxpayers filing jointly. Unlike medical FSAs, there is currently no rollover provision for unused balances in dependent care FSAs. The end of the year can be hectic. Considering how challenging it can be to tackle routine financial tasks throughout the year, don’t procrastinate these important financial planning moves—the deadlines are no longer self-imposed. Source: Forbes

Where you retire can have a big impact on your tax bills for Social Security, pensions, IRAs, 401(k)s and other income. Depending on which state you retire in, your state income tax bill could vary by thousands of dollars. But it’s not just a state’s tax rate that matters. In fact, the type of income you receive in retirement often has a greater impact on your state tax liability than the tax rate you pay. That’s because each state has its own way of taxing certain types of retirement income. Here’s a look at how states tax two common forms of retirement income: Social Security benefits and retirement plan payouts.  Taxes on Social Security benefits. While Uncle Sam taxes up to 85% of Social Security benefits, most states don’t tax Social Security benefits at all. Seven states—Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming—don’t tax Social Security benefits because they don’t have an income tax. New Hampshire and Tennessee only tax interest and dividends. Social Security benefits are exempt from tax in the District of Columbia and 28 states: Alabama, Arizona, Arkansas, California, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia and Wisconsin. That leaves 13 states where a portion of Social Security benefits may be taxable. New Mexico, Utah, and West Virginia currently tax Social Security benefits to the same extent they are taxed on the federal return. However, West Virginia will start phasing out its tax on Social Security benefits in 2020. Taxation of Social Security benefits in the remaining states—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Rhode Island, and Vermont—depends on your income and, in many cases, on your filing status. Some of these states fully exempt Social Security for taxpayers under certain income thresholds. In Kansas, for example, Social Security benefits are completely exempt from state tax if your federal adjusted gross income (AGI) is $75,000 or less, regardless of your filing status. Starting in 2019, single North Dakota residents can fully exclude Social Security benefits from state taxable income if their federal AGI is $50,000 or less, while married residents filing a joint return can claim the exclusion with a federal AGI of $100,000 or less. Missouri offers partial exemptions for joint filers with federal AGI above $100,000 and all other filers with AGI over $85,000, while Missouri taxpayers with income below these thresholds can get a full state tax exemption. The remainder of the states have their own formulas for determining whose Social Security benefits are taxed and to what degree. Retirement plan payouts. The state taxation of payouts from retirement plans—pensions, IRAs, 401(k)s and the like—is more complicated. The states without an income tax or that just tax interest and dividends don’t tax retirement plan payouts. For the other states, it’s a mixed bag. Mississippi and Pennsylvania are the most generous. They generally don’t tax any retirement income. On the flip side, California, D.C., Nebraska, and Vermont are some of the stingiest—they offer little or no tax breaks for retirement plan payouts. Many of the states in between offer credits or deductions ranging from a few hundred bucks to tens of thousands of dollars. Georgia offers the largest tax break—a $65,000 retirement-income exclusion for anyone age 65 and older (couples can shelter up to $130,000). In some cases, the type of retirement plan involved makes a difference. Kansas, for example, exempts income from government pensions, but it taxes private pension payouts. Alabama taxes defined-contribution plan distributions but not private pension payouts. And starting in 2019, North Dakota exempts military retirement pay but not other retirement plan payouts. Source: Kiplinger

I have routinely recommended that people use a bank safe deposit box to store valuable papers and small assets. These include documents like wills, trust documents, ethical wills, and unrecorded deeds. Valuable assets include diamonds, gemstones, jewelry, bullion, and small collectibles like rare coins, stamps, and trading cards. The physical protection of a bank vault, plus a system of access requiring two keys kept by the customer and the bank, would seem to provide a great deal of security. Yet several recent news articles suggest safe deposit boxes are not as safe as they seem. An article in the New York Times reported 44 robberies in the last five years related to safe deposit boxes. Even worse were numerous bank errors in which boxes were moved, misplaced, drilled open, or closed by mistake. A large Maryland bank closed several branches and lost hundreds of safe deposit boxes. One customer lost $500,000 worth of gold and gems. In each case, banks vigorously fought any requirement to make their customers whole. Even more shocking, no provision of federal banking law regulates safe deposit boxes. Nor do banks insure the belongings of customers who trustingly store their most precious valuables in safe deposit boxes. The risks fall on the renter. Wells Fargo’s safe deposit box contract caps the bank’s liability at $500. Citigroup limits it to 500-times the box’s annual rent. JPMorgan Chase has a $25,000 ceiling on its liability. Decades ago, I placed some rare coins in a safe deposit box with a local bank. A few years ago I went to retrieve my valuables, only to find the bank had drilled open the box and sent the contents to the state as abandoned property. I learned that when I relocated my office, the change of address notification failed to carry through to the annual billing notice for the safe deposit box fee. After three years of non-payment, the bank chose to go through the effort of drilling open the box and shipping the contents to the State Treasurer’s office. It would have been simpler to spend a few minutes looking up my information and contacting me. Eventually, I was able to retrieve the contents of the box. I was lucky. An international expert in rare watches stored 92 watches plus rare coins, worth millions, in a safe deposit box at a Wells Fargo bank branch. Wells Fargo had evicted another customer for non-payment and drilled open the wrong safe deposit box. The customer found his “safe” deposit box empty. Wells Fargo executives could only find 85 of his watches. The customer sued. Wells Fargo admitted in court that its employees had mistakenly drilled into and terminated the wrong box. The unrecovered items included gold coins and a watch estimated to be worth nearly a million dollars. After years of litigation and appeals, Wells Fargo has offered no restitution.   If a “safe” deposit box isn’t really safe, what can you do instead? Here are a few suggestions. Consider investing in a high-quality home safe for small valuables and important documents. Scan all important documents and save copies in a secure online “vault.” Many financial planners provide such online backup storage. If you do use a safe deposit box, choose one at the bank you use regularly and open it at least once a year. No matter where you keep your valuables, insure them adequately. Standard homeowner coverage is probably not enough. Share passwords and access codes with another trusted person. Finally, ask before you store. Understand a bank’s policies and coverage limits before you trust it with your valuables. Source:  Advisor Perspectives

Without even knowing it you might be doing things that are damaging your credit score, which affects your ability to get credit and the interest rate you pay when you do get credit. A 2014 survey by Credit.com found that consumers sometimes don’t understand which actions will and will not help them improve their credit scores. To take the right steps to boost your score, you need to start by understanding the basics of credit scores. The FICO credit score is the most widely used score in lending decisions and ranges from 300 to 850. A FICO score of 750 to 850 is considered excellent, and those with a score in that range have access to the lowest rates and best loan terms, according to myFICO.com, the consumer division of FICO. A score of 700 to 749 is good, and those with a score in this range will likely be approved for loans but might pay a slightly higher interest rate. A score of 650 to 699 is considered fair, and those with a score in this range will pay higher rates and could even be declined for loans and credit, according to myFico.com. The three credit bureaus – Equifax, Experian and TransUnion – also have created the VantageScore, which ranges from 501 to 990, and the VantageScore 3.0, which ranges from 300 to 850 (to mimic the FICO range). The VantageScore is growing in popularity among lenders but still isn’t as widely used as the FICO score. No matter the name, scores can vary by credit bureau depending on when the score was calculated and what specific method was used to make the calculation. Each credit bureau has its own formula. Once you know your score, you can start taking the right steps to improve it. To do so, follow these six habits of people with excellent credit scores. 1. Pay on time. Payment history is the top factor in most credit scoring models, says Gerri Detweiler, director of consumer education at Credit.com. So payments that are 30 days or more late can quickly drag down your credit score. And one late payment is enough to hurt your score, she says. According to myFICO.com, 96% of consumers with a credit score of 800 pay credit accounts on time; 68% of those with a score of 650 have accounts past due. Even if you can only afford to pay the minimum, always pay on time because that will have a bigger impact on your score than the amount you pay, Detweiler says. Set up automatic bill pay through your credit account or bank account so you don’t miss a payment. 2. Minimize use of available credit. Usually, the second most important factor in your credit score is how much debt you have compared with the amount of available credit you have, Detweiler says. Those with a credit score of 800 use only 7% of their available credit, on average, according to myFiCO.com. But most consumers with a score of 650 have maxed out their available credit. You can see a significant increase in your credit score shortly after you pay down highly utilized credit accounts, Detweiler says. If your credit cards are maxed out and you can’t pay them off quickly, she recommends consolidating your balances with a personal loan from a bank because the so-called credit utilization ratio (total credit balance divided by total credit limit) for those loans isn’t calculated in the same way and doesn’t weigh heavily on your score. 3. Maintain low or no balances. People with excellent credit almost always keep low balances on their credit cards, and often don’t pay interest because they pay their balances in full every month, says Jason Steele, a credit card expert for CompareCards.com. In other words, they only use cards for things they can afford to pay off with cash, he says. To become disciplined with credit and avoid racking up balances, Steele recommends logging into your credit account online after making a purchase to pay it off.  4. Have a lengthy credit history. Those with a credit score of 800 have an average account history of 11 years (with oldest account opened 25 years ago) versus an average account history of seven years (with the oldest account opened 11 years ago) for those with a score of 650, according to myFICO.com. So opening several new accounts at once can shorten the average age of your credit history, Detweiler says. And closing old, inactive accounts also can hurt. This move can increase your credit utilization ratio since closing an account means you no longer have access to that available credit. 5. Only apply for credit when necessary. It’s important to have a healthy mix of lines of credit, including credit cards, auto loans, mortgages and even personal loans, Steele says. This shows that lenders are willing to trust you with their loans. And the more available credit you have, the lower your credit utilization ratio will be, he says. But that doesn’t mean you should apply for every line of credit you’re offered. Multiple inquiries from lenders for your credit reports in a short period can trim your score, especially if you don't have many credit accounts or you have a short credit history. Be especially careful when car shopping because Detweiler has heard lots of complaints from consumers whose scores dropped when they had several dealers pulling their reports for financing options. Rather than let a dealer shop your credit, choose a lender you like beforehand and get pre-approved for a loan. 6. Choose credit cards carefully. People with excellent credit usually get the best credit card offers. But they’re smart about the cards they choose. For example, even though retailers often offer discounts on purchases when you sign up for their credit cards, these cards often have low credit limits, which can hurt your credit utilization ratio if you carry a balance on those cards. Cards with annual fees also should be avoided, Steele says, unless they’re packed with benefits -- such as cash-back rewards and miles that can be redeemed for travel – that outweigh the fee. Those who are smart with credit look for cards that waive that fee for the first year then re-evaluate the card in the second year to see if the benefits outweigh the fee, Steele says. It’s also smart to look for cards that offer a 0% interest rate for the first year, he says. Source: Kiplinger