MAKE MONEY ONLINE POSTS: 01/02/20

الخميس، 2 يناير 2020

What is personal liability insurance?

Not all homeowners insurance exists to protect you and your loved ones when bad things happen to you. Though it’s true that a tree could fall on your roof or that a burglar could break into your place and make off with your belongings, those aren’t the only potential times insurance could kick in. Liability insurance is meant to protect you and other people when bad things happen to them.

What is liability insurance? It gives you financial protection if someone outside of your household is injured or has their property damaged by you, your pet or someone in your family. According to the Insurance Information Institute, approximately one in 1,000 homeowners policies have a liability claim, and of those roughly one in 15 have a claim each year that results in an insurance payout. In these cases, it’s good to have insurance that has you covered when you’re deemed responsible.

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Benefits of personal liability insurance

Personal liability insurance covers you or other residents of your household that are deemed legally responsible for property damage or bodily injury suffered by others while on your property. This insurance means that you won’t have to pay legal fees or medical bills out of pocket.

For example, if a guest falls down the stairs in your home and suffers a serious injury, they have recourse to sue you or demand that you cover their medical bills. Personal liability insurance covers those costs up to the monetary value of the policy’s limit. Because it takes the financial burden of a guest’s accident off of your shoulders, personal liability insurance is extremely valuable to policyholders that opt for it.

Who needs personal liability insurance

Trying to anticipate who is a good or bad candidate for personal liability insurance is a job best left to a crystal ball. Nobody can predict the future or the unintended accidents for which you or someone in your household may be held accountable. What is certain, however, is that if you’re responsible for an injury suffered by someone else or for damaging someone else’s property and you aren’t protected, the financial blowback may be more than you’re prepared to handle.

If you think that your home is a place where accidents might take place, your best bet is to cover yourself with personal liability insurance. Maybe you have a dog or live in a place where it rains a lot, which could make your driveway slippery. You might want to keep your finances protected with liability insurance.

What does liability insurance cover?

Every homeowners insurance policy and the personal liability coverage within it is different. Because of this, it can be difficult to predict what will or won’t be covered by a particular provider. With that being said, a liability insurance definition typically consists of the following coverage pillars that tend to pop up repeatedly in one policy after another. These include:

Medical bills resulting from injuries sustained by visitors to your home.
Legal fees in the event that you’re sued over an accident that took place in your home and you require defense.
Lost wages resulting from an injured party’s inability to work and earn wages for a significant period of time.
Death benefits awarded to the family of someone who has a fatal accident on your property.
Away-from-home coverage, which protects you if you are found responsible for damages in a place away from your home, such as a hotel.

Also consider what kinds of things are unlikely to be covered by a personal liability insurance policy. Obviously, if someone purposely tries to injure themselves or damage their belongings while on your property for financial gains, it’s unlikely that personal liability insurance will come into play. Liability insurance is also not applicable if the person injured on your property is you or a family member that lives with you. Finally, if you run a business out of your home and suffer an injury related to that business, it is unlikely that liability insurance will cover any resulting expenses you incur, though in some cases, homeowners insurance policies provide for riders related to home businesses.

In such cases, check with your provider to see what is and is not covered on your policy.

How much will it cost?

As personal liability insurance is generally included in homeowners insurance, you don’t necessarily pay for this type of coverage by itself. With that being said, the premium on your homeowners insurance is likely to vary based on the coverage limit that you set for your personal liability insurance. The higher your coverage limit, the more likely you are to pay in premiums from one month to the next.

Further, if you find that the liability insurance coverage limit in your policy is insufficient, you can add a personal umbrella policy that extends your coverage and can cover you in circumstances where costs owed exceed the dollar amount of your initial liability coverage. An umbrella policy will cost more and is something to consider when calculating the overall costs of personal liability insurance.

How do claims work?

The claim process for personal liability insurance depends on the circumstances of the accident. In some cases, a person who gets hurt on someone else’s property may ask that person to cover their medical expenses using their liability insurance. In that case, the homeowner would file the claim on behalf of the injured party.

In other cases, however, the homeowner may not believe that they are responsible for an accident, thus refusing to file the claim themselves. Situations like these can escalate to legal matters, in which case the injured party would need to file a suit and the homeowner would need to file a claim for legal defense.

Some claims processes depend on the state where the incident occurred. In some states, the victim can file a claim against the responsible party’s insurance company directly. In others, only the responsible party is allowed to file the claim. If the homeowner doesn’t believe that they are responsible and refuses to file a claim, such cases can end up turning into long, drawn-out legal affairs.

How to get personal liability insurance

Personal liability insurance is a standard component of almost every homeowners insurance policy on the market. Therefore, obtaining personal liability insurance generally isn’t any more complicated than signing up for a homeowners insurance policy.

With that in mind, the coverage limits for liability insurance are sometimes not sufficient enough for the policyholders that they cover. On such occasions, extend coverage by purchasing a personal umbrella policy, which can bridge the gap between what your personal liability coverage pays for and the leftover amount due as a result of an accident.

Find the Best Home Insurance

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Other forms of personal liability insurance

In addition to the personal umbrella policy noted above, one other common form of personal liability insurance that you’ll see some providers offer is home business insurance. This coverage protects policyholders like freelancers who use their home as a space from which they conduct business. If an accident occurs at their home that is related to their business, the business liability insurance protects the policyholder from third-party claims or a formal lawsuit that they might otherwise have to pay out of pocket.

As was mentioned in previous sections, the types of liability coverage that are included in a standard homeowners policy can vary from provider to provider, and it’s not uncommon to see options like death benefits, lost wages and other forms of personal liability insurance offered as add-ons in cases where they are not initially included. Checking with providers when you seek a quote is a great way to find out exactly what your policy includes.

How to save on personal liability insurance

To save money on your personal liability insurance, consider what factors contribute to the price that you pay for your liability coverage.

One major factor is the monetary amount of coverage that you get in the event of an accident. Commonly, you’ll see policies start out with $100,000-worth of coverage and go up from there. Certain umbrella policies offer coverage in the millions of dollars. This will afford you greater peace of mind knowing that you likely won’t have to pay anything out of pocket, but the higher your coverage limit, the more you pay each month in premiums.

Thus to save money on your liability policy, consider two things. First, how much financial coverage do you need, given your circumstances? If you talk with a provider and determine that your existing coverage limit is enough given your habits, you can save money by keeping your current limit as is or possibly even reducing it. Secondly, what types of additional coverage do you need? As we’ve noted, providers can set you up with additional liability coverage, but if it doesn’t apply to the risks you face, there’s no need to fork over extra money for it each month.

By being mindful of what coverage you actually need and the extent to which you need it, you can save yourself a lot of money in premiums.

The post What is personal liability insurance? appeared first on The Simple Dollar.

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How much renters insurance do I need?

If you’ve recently moved into a rental property, now is the time to start thinking about getting renters insurance. You might assume that renters insurance is one of those things that’s nice to have but not an essential. However, renters insurance can come in handy if your personal belongings get damaged or stolen. Without insurance, you’ll have to pay for the full cost of replacing your items out-of-pocket.

There are both pros and cons to having renters insurance, and you should have the full picture before making a decision. In this article, we’ll discuss some of the benefits and drawbacks of renters insurance, how to determine how much coverage you’ll need and what you can expect to spend.

The benefits of renters insurance

Like with any insurance policy, the most obvious benefit to having renters insurance is knowing that you’re covered. But first, you need to ask, “what does renters insurance cover?”

Repairing and replacing your belongings

Renters insurance gives you peace of mind knowing that your personal belongings are covered if they get damaged or stolen. The insurance company will help you pay to repair or replace the items that are lost. Even if you don’t own many things, the cost of replacing essentials, like furniture and clothing, can add up fast.

Additional living expense coverage

Another perk of renters insurance is that most policies cover more than your personal possessions. Renters insurance usually includes additional living expenses coverage, which would pay for your hotel or another apartment if you were displaced from your home and had to go elsewhere.

Medical expense coverage

If you frequently have guests over at your apartment, you might have an occasion to be grateful for renters insurance. Your renters insurance policy will cover someone’s medical bills if they were to get injured in your apartment. Some renters insurance even provides coverage if your dog bites someone at your home or even off your property. You can also expect your renters policy to provide liability insurance if you accidentally damage someone else’s property.

The low cost of renters insurance

Lastly, renters insurance is inexpensive. In some ways, purchasing coverage is a no-brainer. According to the Insurance Information Institute (III), the average cost of renters insurance in the United States was just $180, as of 2017. For about $15 per month, you can have coverage for the majority of your personal belongings.

The drawbacks of renters insurance

It’s not free

But like all things, there are a few drawbacks to renters insurance. Most notably, renters insurance costs money. Although it’s a small cost compared to many other types of insurance, it’s still an expense that can be hard to justify if you’re trying to save money. If you never use the insurance policy, the cost of your renters insurance is money you could have put toward something else.

Insurance deductibles

Deductibles are another downside of renters insurance. Your deductible is the amount of money you are responsible for paying before the insurance company will take over. If your personal belongings aren’t worth much, you can probably afford to replace them out-of-pocket, which makes the insurance coverage worthless.If you choose to lower your deductible, you will pay a higher annual premium to compensate.

You may need additional coverage

Depending on what type of belongings you have, your items won’t all be covered under a basic renters insurance policy. On top of that, most renters insurance policies are capped at a relatively low amount. If you have valuable items like fine jewelry or art, you’ll probably need to purchase additional coverage for those things.

Determining how much renters insurance you need

Take an inventory

To determine how much renters insurance you’ll need, start by creating an inventory of all the things you own. Write down every item, take photos, write a description that details the condition of the item and note the price you paid for it. Having an original receipt is even better. For larger items, like appliances, note the serial number in your inventory. After you estimate the total value of your items, you can determine how much coverage you’ll need to purchase.

Estimate how much you’re willing to pay out-of-pocket

As you’re deciding your coverage amount, consider how much money you could afford to put toward replacing your items if you needed to. If you can comfortably put $1,000 towards replacing your items out-of-pocket, you can probably opt for a higher deductible, which will lower your premium. If you’re strapped for cash and need the insurance company to pay for as much as possible,choose a lower deductible.

Another option: Keeping an emergency fund

Whether you have insurance or not, no one ever anticipates their personal belongings getting damaged or stolen. If you’re not sold on the idea of purchasing renters insurance, another option is to create an emergency fund. This can be a separate savings account that you put one lump sum into or deposit money into overtime. By having money already set aside, you’ll be prepared should you need to replace some of your belongings unexpectedly.

If you choose this route, reserve that money for emergency purposes only. Don’t get tempted to dip into your account so you can have a few extra dollars to spend on something you don’t need. The point of an emergency fund is to have a backup in case you need money in a pinch. If you end up draining the account and you don’t have renters insurance, you could put yourself in debt.

The bottom line

For most people, having renters insurance is a good idea. It offers protection from unforeseen circumstances, and it can save you a lot of money in the long run. However, renters insurance is beneficial for certain people, and less of a need for others. If you think it’s the right option for you, ask an agent about how to get renters insurance from your current insurance company if you want to bundle policies, and always remember to compare quotes from other companies.

Whatever you decide, have some form of coverage for your personal belongings, whether that’s in the form of an insurance policy or an emergency fund that you manage yourself.

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Policygenius Life Insurance Promises The Lowest Prices

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Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school?

That’s where life insurance can give you peace of mind.

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In fact, Policygenius is so confident it offers the best rates around that it’ll give you $100 if you find a lower price for the same term life insurance coverage elsewhere.*

What’s better is getting a free quote through Policygenius takes about two minutes. And if you’re not sure how much coverage you need, it’ll guide you through the process.

Once you find a policy that fits your needs, you’ll apply online and finish up with a quick phone call from a representative who’ll be able to answer any questions you have.

Tonight, you’ll be able to sleep easier knowing your family will be taken care of financially.

* See term and conditions here.

Carson Kohler (carson@thepennyhoarder.com) is a staff writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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2019's $5.9T Stock Boom Was More Than Double the Spike Presidents Normally Get in a First Term

Wall Street is hoping for another strong year after stocks in 2019 had its best return in six years.

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How to Close a Bank Account Without Incurring Fees

You’ve had a long and trying relationship. But the time has finally come to break up for good.

If this accurately describes you and your bank, it’s important that you go about your breakup the right way. Follow this guide on how to close a bank account so you can make a fresh start without worry.

Find Your New Bank

Before you even contemplate breaking the news to your bank, you need to find a replacement. This is one time that rebounding immediately after a breakup is a good thing. Failing to find a new bank before you ditch your old one could mean one giant financial headache for you.

Finding your perfect bank might seem like a daunting task, but it doesn’t have to be. There are plenty of resources to help you choose a bank, whether you’re considering an online-only bank, a brick-and-mortar bank or a credit union.

Start the Breakup Process

Once you’ve opened your new bank account, it’s time to start transferring your money.

Make Sure You Have Automatic Payments Covered

Unless you like to live out of a checkbook, chances are you have some (if not all) of your bills paid automatically each month. Those automatic payments are tied to your bank account, so if you close your account before you switch over your payment information, you’ll default on your payments.

At the very least, that’ll mean late fees. But if you fail to pay something like your phone bill, your provider may cut off service, which could be devastating if you rely on your phone for work.

Transfer Your Balance

After you’ve switched over your automatic payments, it’s time to move your balance over to your new account. It’s a good idea to leave a bit of money in your old account for a short period to cover any automatic payments you may have forgotten about. The last thing you want is to have an overdraft on your old bank account.

Make sure you transfer your money from all your accounts, including checking and savings.

Give It Some Time

Once you’ve moved your money over to your new account, you might be tempted to cut ties with your old bank right away. But it’s a good idea to leave your old account open for a couple of months just to make sure you don’t have any lingering payments.

You might also leave a small amount of money ($100 to $200) in the account to cover any surprise payments to avoid overdraft charges.

How to Close a Bank Account

Once you feel confident that everything is in place with your new account, it’s time to begin the process of closing your old one.

Online or in Person

Depending on the type of account you have (and your personal preferences), you can usually either close your account online or in person at a local branch.

Your bank might also require that you submit a written request. This should include your name, address and account number. If you have multiple accounts at the same bank, make sure you include the numbers of each account you want to close separately.

Request a Written Letter

In your written request to cancel your bank account, ask for the bank to provide you with written confirmation once the account or accounts are closed. Even if you receive a confirmation letter, it’s still wise to call the bank to double check that everything went through and you didn’t miss any instructions from them to finalize the closure.

Deposit Any Leftovers

After you close your account, your old bank might send you a paper check for any remaining balance from that account. Make sure you deposit that check ASAP into your new account. Most banks have a deposit function in their apps, but you can also take the check to a branch to deposit if you feel more comfortable that way.

Review Your Statement

After you’ve officially closed your account, check your last statement carefully. You want to make sure there aren’t any unexpected charges on there or ones you don’t recognize. If you see anything suspicious, contact your old bank immediately to resolve the issue.

Frequently Asked Questions

Throughout the process, you will probably have some questions about how to close a bank account or hear some terms you don’t understand, such as:

What Are Zombie Accounts?

Some banks automatically reopen closed accounts if a charge is made. This could happen if you forgot to change the details on one of your automatic payments, or if your request to change your auto bill details didn’t go through properly. If this happens, contact your old bank to discuss your options.

Will Closing a Bank Account Hurt My Credit Score?

You probably know that closing a credit card or loan can have a small effect on your credit score. Luckily, closing a checking or savings account has absolutely no effect on your credit, as long as you don’t have a negative balance.

What Happens if I Have a Negative Balance?

If your old account has a negative balance, you will likely need to pay it off before the bank will let you close it. If you manage to close it without paying off your balance, the bank can send it to collections, which will show up on your credit report and hurt your credit score.

Breaking up with your bank can seem daunting, but if you go about it the right way, you can make a clean break and enjoy your new banking relationship with no baggage.

Catherine Hiles is a writer, mother, runner and avid reader. She enjoys cooking (and eating), good beer and spending time with her husband and two young children.

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Paid Sleep Studies Guide: How One Woman Made $12,000

You mean you go to sleep every night and don’t get paid for it? Your luck may be about to change.

Turns out several million people in the United States suffer through sleepless nights, which many researchers agree greatly affects overall health. Numerous hospitals dedicate entire divisions to studying sleep — and they’re willing to pay you several thousand dollars just to watch you nap.

Most studies want healthy adults with consistent sleep patterns. I checked both boxes, and earned $12,000 participating in two studies in the same hospital. Here’s what I learned in the process, and how you, too, can get paid to sleep.

How to Qualify for Paid Sleep Studies

Some cities have a higher concentration of facilities that pay sleep-study participants, but it’s easy to find facilities in your area. I joined two studies in Boston at Brigham and Women’s Hospital.

When you find a sleep center near you, you’ll usually see multiple studies running simultaneously. You won’t qualify for all of them, but you may qualify for more than you think.

Read the specifics of each study carefully so you only apply to studies you qualify for. You’ll often need to take a survey, sharing your personal information and confirming you understand the study’s goals and compensation. For example, the questionnaires I filled out included:

An age window: Most studies look for volunteers in a specific age range.
Length of in-hospital time: Whether it’s a few hours or several nights, make sure you know what you’re signing up for.
Payment: You’ll want to make sure a study is worth your time and effort before joining.
Specific lifestyle or medical requirements for study: Some studies look for volunteers with specific needs or qualifications, such as people with sleep apnea or those who work shifts outside the traditional nine-to-five.
Comfort with the study methods: Recruiters want to make sure you’re up for the challenge, so while the questionnaire won’t tell you everything about the study for fear you’ll tailor your answers based on what you think they want to hear, they want you to know what they’re aiming to observe.

Don’t fudge your answers. Being honest is the only way to successfully get through this process, not to mention contribute to accurate scientific data!

One cool feature is that you can start this part of the process remotely. I stayed in Florida while applying for studies in Boston, and I was able to get pretty far through the process before having to visit in person.

So if you’re planning a trip and want to turn it into an earning opportunity, consider looking for a study before you leave home!

What Happens After You’re Accepted to a Paid Sleep Study

Once you’re accepted, you’ll find you have just become the recruiter’s best friend! She’ll want to talk to you and see you all the time.

Next, you’ll go to the hospital for a series of briefings and tests. You’ll likely meet the doctor conducting the research, who will give you a thorough explanation of the study and its processes.

At this point, you’ll likely take two exams:

A psychological exam: The goal is to make sure you can handle isolation and a hospital environment in general.
A physical exam: Like a standard physical, a nurse will weigh you, take a small blood sample, ask you to pee in a cup, etc.

You won’t know right then and there if your blood and urine earned an A+, but you’re well on your way to completing the process.

The best part? This is paid time. If you get cold feet and decide to quit at this point, you’ll still get paid for each part of the process you’ve completed so far.

Compensation varies, but most researchers want to dangle a carrot so you’ll keep going. Most of the time you can expect a $25-$100 payment for each step you complete.

Most facilities are really good about the payout breakdown, but if yours doesn’t explain it at the beginning, ask. This is also your opportunity to discuss when and how you’ll be paid, as well as how your payment will be taxed.

After your exams, you’ll meet up with your new BFF, the recruiter who you will call every day for the duration of the study. At this point, I actually stopped calling her my BFF and started calling her “my mother.” She gave me a special watch to monitor my light and activity patterns, keeping an eye on what I was doing.

You’ll also keep a physical sleep log documenting your progress as you wake up and go to bed at the same time every day, and you’ll call your new “mom” as you’re doing this to make sure what you say you’re doing is true.

That said, Mom has faith in you. She wants you to succeed, and if you blow curfew a few nights, you probably won’t be kicked out of the study.

What to Expect When You’re Ex… Sleeping

No, it’s not all comfy pillows and sweet dreams; researchers pay participants because these studies have a few downsides.

In my experience, they sound worse than they actually are. Here’s what you should be ready for:

Isolation

You will likely be completely cut off from the outside world during the study’s observation period. You usually won’t have any time cues, meaning no clock, no computer and no phone. You also won’t have any windows to observe light patterns. While you’re in the study, the doctor determines night and day, which can be a bit unsettling.

I’ve taken part in studies as short as four days (for which I earned $4,000) and have seen others as long as 31 days (typically paying $10,000). Start small and work your way up once you’ve tried it once or twice.

Unusual Positions or Challenges

You may have to maintain a “constant posture” for part of the study. In some cases you may have to sit in the same position for six hours, or you may be kept awake at a 45-degree angle in low light for two days. It depends on the study, but confirm you’ll be able to manage it before you sign up.

And no, for those of you wondering, I’m not kidding about the “constant” part — you don’t get to get up or change positions to use the restroom, so you might need to use a bedpan. This was the most difficult part of the studies I did!

Needles and Other Medical Devices

During at least part of the study you may wear an IV, a rectal thermometer and electrodes attached to your head.

Did you just say rectal thermometer?! Why yes, I did. There’s a reason they pay the big bucks.

The technicians and researchers make all of these procedures and measurements as easy as possible. The thermometer helps them make sure you’re maintaining a normal body temperature, and it’s not as big of a deal as it sounds.

The Rewards of Participating in Paid Sleep Studies

No, it’s not all easy — but the rewards are great. I earned $4,000 for a four-day study and $8,000 for a seven-day study.

Plus, when you’re not giving blood or following instructions, you can do pretty much whatever you want outside of activities that would raise your heart rate.

If you want to relax, simply hang out in your comfiest clothes and listen to music, write letters, draw or paint. I never make time to create comics, but I completed three during one study, not to mention finishing several books that had been collecting dust on my shelves.

Or, put your time to work. A technician told me another participant worked on his architecture senior thesis during his time in the study!

Although you’re subject to frequent interruptions, if you can bounce back to what you were originally working on, it’s a great time to really hone in on any type of project. I suggest packing a bag with notebooks, art supplies, books and projects you’ve been meaning to work on, and seeing what you feel like.

You’ll enjoy a complete technology cleanse, you’ll interact with interesting technicians and researchers, you’re contributing to science, and best of all, you’ll get a big fat check. Not bad for a few nights’ work!

Jillian Shea is a contributor to The Penny Hoarder.

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Values-Based Budgeting Prioritizes What’s Important to You

Many people hate budgeting because it feels restrictive, and reviewing past spending reminds them of their financial mistakes.

Who wants to limit their entertainment spending or total up how much they spent last month at fast-food drive thrus?

But what if your budget actually reflected what’s important to you and made you feel good about your financial decisions?

That’s what values-based budgeting is all about. This budgeting method prioritizes what you value in how you allocate and spend your money.

How to Create a Values-Based Budget

Values-budgeting requires you to take some time out for introspection. Think about what really matters to you, and adjust your spending habits accordingly.

A fun way to think about it is this: If your employer paid you in something other than money, what would you want it to be? Plane tickets? Sought-after sneakers? The latest tech gadgets?

You can’t ignore paying for the necessities — like a roof over your head and food on the table — but this budgeting method asks you to make mindful choices about how you spend the rest.

Take a deep dive into your spending history. Reviewing bank statements from the last three months can help. Where is your money going? What surprises — or disappoints — you the most?

If your spending seems to be in line with your values — great! You’re already inadvertently practicing this money management method. But if you realize you’ve been spending a lot on clothes when you really wish you could travel more, it’s time for some budget adjustments.

Funnel the bulk of your disposable income (the money you have left over after the bills are paid and your needs are met) to stuff that you value. No judgment on what that is — it’s about what matters most to you. If you’re a sports fan, grab those season passes. Or make room in your budget to splurge on boutique fitness classes if you’re passionate about health and wellness.

Pro Tip

Values-based budgeting isn’t an excuse to ignore saving for retirement or future goals. Automate your savings by paying yourself first — depositing cash in a separate account when you get paid.

A Values-Based Budgeting Example

Values-based budgeting isn’t a rigid plan that looks the same for each person. It’s very much open to your own interpretation.

Let’s say, for example, you desire career advancement, you’re a foodie and you have $200 in disposable income each month. Rather than letting that money get eaten up by random impulse buys and frivolous expenses, budgeting that extra money could look a little like this:

$15 in membership dues to a professional organization
$25 to attend a networking event
$60 for an online course
$100 to try out a couple new restaurants in town

You can even apply values-based budgeting to your fixed expenses. Living far from your downtown office and the local restaurant scene may save you money. However, you may be able to spend the same amount on housing, while living in a more expensive place in the heart of town, if you took on a roommate to split costs. And you’d be able to get to work early and grab meals from your favorite eateries — both of which reflect what you value.

Make the Most of Your Money

Bottom line: You spend too much time and energy earning an income to not put a little effort into figuring out the best ways to spend that money.

Analyze which of your current expenses don’t bring value to your life, and make an earnest effort to spend less in those categories. Don’t ignore essentials either. For example, having a phone may be a necessity but if you’re only really using it for talking, texting and occasionally checking social media, you probably don’t need the latest iPhone with an expensive data plan.

Wherever you can eek out savings, put that money toward spending that you value. Budgeting will no longer be about what you can’t do, but more about what you can do.

Nicole Dow is a senior writer at The Penny Hoarder.

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How to Start 2020 on the Right Financial Foot

The dawning of a new year is the perfect time to take a moment, review the year that just past, and put things in place for a successful year to come.

In no area of life is this more true than in your financial life. For many of us, the expensive holiday season has just passed, tax season is coming up and many other little financial shifts are happening all over. Some people receive small raises, either for performance or the cost of living.

All of these changes and shifts add up to a great opportunity at the start of the year to set the year off on the right foot. Here are seven valuable things you can do to ensure that 2020 gets going in the right way.

Do a thorough spending review of 2019.

The turning of a calendar year is a great time to sit down and do a thorough review of your spending for the entire year. Pull out your bank and credit card statements for the past year – whether you have them in paper form or need to go online and retrieve them — and start evaluating them item by item.

Why would you want to do this? There are many reasons.

For starters, this practice can be very helpful for identifying bad spending habits. You might not really think that much about something you do once or twice a week for fun, but when you look at your spending over the course of a year and you see that same expense popping up again and again and again and again, you begin to see that it’s having a major impact on your financial life.

Spending $5 once or twice a week might fly right by you, but when you see that expense repeated 75 times in your annual financial review and you realize that it adds up to $375, it can really put some of your worst financial habits in a new light and give you a strong incentive to start making some changes.

You might also be able to identify recurring expenses you’ve forgotten about. Sometimes, we set up an automatic payment for some bill and then completely forget about it. You keep getting dinged every month or every quarter or every year for that expense, but you’re not using the service at all (or using it minimally). You’ve just forgotten about that recurring expense.

A thorough review of your bank statements and credit card statements can pretty quickly identify those recurring expenses, which you can then easily cancel with a phone call or a website visit. This alone can save you a lot of money going forward.

You may also notice expenses that you didn’t authorize. Sometimes, someone will steal your credit card number and then use it in subtle ways. They might just make small Amazon charges throughout the year, or they might occasionally buy gas using your number. The expenses are irregular enough and similar enough to normal expenses that you don’t notice them in your daily life, but they do show up when you look closer.

This can be a sign that you need to cancel your credit card or get a new credit card number or talk to your bank about similar security steps.

A thorough review of bank and credit card statements can also remind you of how much you’re really spending on non-essentials. Sometimes, all we really need to give ourselves a kick in the rear is to see the full amount we’re spending on unimportant things, and an annual statement review can easily reveal that kind of overspending.

If there’s no specific recurring expense that’s bothering you but you feel almost overwhelmed by the sheer number of line items and most of them are non-essential, that’s a sign that you should sit down and carefully think about how you’re spending money. How many of those expenses are really important and really bringing value into your life? How many of them are basically forgotten within a few days? Which ones could be cut out of your life without any real reduction in life quality?

A careful review of all of your bank and credit card statements can reveal all of these things and more. It’s well worth spending an hour or two going through statements because of the value you’ll get out of making any of these changes.

Boost your retirement contribution to match any cost of living or other raises you might receive.

Many people receive small annual raises or cost of living raises at the start of January. Often, that small bump is seen as a sign of financial relief, that you now have a bit more leeway with your spending throughout the year, but that may be the wrong take.

Rather, consider boosting your retirement contribution to match that raise.

By doing this, you’re obviously increasing the amount of money you’re setting aside for retirement. Bumping your retirement contribution from 6% to 7% or from 10% to 11% can have a profound positive impact on the long term value of your retirement account. Trust me, your future self will thank you.

The nice thing about doing this kind of small bump at the time of receiving a raise is that it will leave your take-home pay mostly unchanged. You might go up or down a dollar or two on your check, but the change will be so small as to be unnoticeable. Basically, your life continues on as before.

This is a really easy thing to do. If you contribute to a workplace retirement plan, like a 401(k) or 403(b), contact your human resources office to ask about making an adjustment to your retirement contributions. If you’re not sure where to go, just ask around.

What if you never signed up for a 401(k) or 403(b) (or TSP or other similar) plan? Now’s a great time to sign up. Join that plan and start contributing 2% or 3% of your paycheck when the raise kicks in and you won’t even notice a difference in your paycheck.

What if your workplace doesn’t offer one at all? You can sign up for a Roth IRA outside of your company. It’s easy to sign up for one, as many investment houses offer them. I personally have a Roth IRA through Vanguard, and I think the offerings at Fidelity are quite good, too. Once you sign up, you can instruct the Roth IRA to automatically withdraw a small amount from your checking account in sync with your pay periods. So, for example, if your raise makes your paycheck go up $20 every two weeks, you can have the Roth withdraw $10 a week or $40 a month from your checking account. In the end, you won’t notice a difference in your day to day finances.

The nice thing about all of these moves is that it leaves your daily life alone, but at the same time you’ll see your retirement savings start to accelerate. Rather than just spending a bit of extra money that you probably won’t notice too much anyway, you’re simply setting it aside for a better future.

Go through all of your insurance policies and make sure everything is covered.

The start of the year is a great time to check in on all of your insurance policies, just to make sure that all of the policies are correct and up to date. You’ll want to make sure that you understand each policy, know what is covered and what the deductibles and premiums are, and also to make sure that everything important to you is covered.

Do you have homeowners or renters insurance? What kind of disasters are covered by that insurance? Are there disasters you are worried about that aren’t covered? Is the policy up to date? If you do a bit of poking around for insurance rates, are the rates you are paying in line?

Do you have automobile insurance? Are all vehicles covered? Are you comfortable with the type of coverage you have on all of those vehicles? Is the policy paid and up to date? Again, if you do some cursory examination of insurance prices online, are the premiums you’re paying sensible?

Do you have life insurance? If you have anyone who depends on you, you should probably have a term policy on yourself with that person as a dependent so that their life doesn’t fall into disarray if something should happen to you. Is the policy paid and up to date?

What about your health insurance? Are you familiar with what it covers? Does it cover wellness visits? Are you happy with the doctor selection and the premiums and deductibles you owe?

You may have need for other policies, too, and those should be reviewed. Do you need motorcycle insurance? Boat insurance? Do you need umbrella insurance (a good idea for those with a high net worth)?

Over all of your policies, can you easily access policy information while not at home? What if your home burns down? Make sure you have digital copies of any information you might need on your smartphone or in another place you can easily retrieve.

A good thorough review of all of your insurance should answer all of these questions and more. Take the time to read a summary of each policy and ask yourself if you’re happy with what it covers and what the expenses are. If you’re not, look for other options.

Start a financial organization system if you don’t already have one.

What do you do with your financial papers, things like receipts and bank statements and titles? Do you just tear them up and throw them away? Do you have a filing system for them? Do you keep the most important ones in a safe place?

If you don’t have an organized system for your papers, now’s a great time to start one so that you can begin your record-keeping with a full run of this year’s papers.

Basically, if you have a piece of paper or an electronic document that has something to do with money entering or leaving your life, it’s probably worth holding onto for at least a few years. This includes things like tax returns, receipts, any and all bills, paycheck stubs, credit card and bank statements, check registers, investment statements, and so on. My philosophy is to hold onto all such papers for seven years.

One easy filing system is to simply have a manila envelope for each month, in which you stick all of the financial papers that arrived in your life during that month. While you might have to dig through several envelopes when looking for something, you’ll at least have all of the documentation in a sensible order.

From there, you can go as complex as you’d like. For years, I used a system where I had a folder for each type of document for each year. I had a “Credit Card Statements: 20XX” folder and a “Utility Bills: 20XX” folder and so on. It wasn’t too hard to maintain this system, either, though over time I gradually moved to a digital filing system because I had most of my statements in digital form.

If you do use a digital system for storing your documents, make sure you have a secure offsite backup of some kind. I use a large encrypted file that I save in a couple of different cloud storage services; with the right software and a very long passcode, I can decrypt that large file and it has everything I need in it.

Get ready to file your taxes.

The turning of the calendar year means the end of the income tax year, too, and that means you’re soon going to be seeing tax forms arriving in the mail and/or at your workplace. Right now is a great time to get things set for filing your taxes.

Are you going to file your taxes yourself? If so, are you using software? Make sure that software is set up and ready to go for when you start receiving documents.

Do you have a system for collecting tax documents as they arrive? I usually keep a manila envelope full of tax documents, stuffing them in there as they come.

This can also be a great time to go through your receipts and statements for the year, looking for things that may be tax-deductible. This is particularly useful if you have a mortgage and also child care expenses because those usually add up to enough to itemize your deductions on your taxes, and that means further deductible expenses will add up to a nice tax savings.

You might not be ready to file your taxes quite yet, but you can get started by simply getting your software ready to go, setting up a place to store your tax documents, and starting the process of digging through your receipts, and you can get started on all of that today.

Check a credit report.

Another great task to start your financial year off right is to check your credit report.

So, let’s back up for a second. Your credit report is simply a listing of most of the businesses and entities who have extended credit to you in the past and whether or not you have met your obligations to keep that credit paid down. Have you paid your bills? That’s the big question.

There are three businesses that focus entirely on collecting that information — they’re called the credit bureaus, Experian, Equifax, and Trans Union. When you go to borrow money or get a lease or even to get a job, businesses will contact one or more of those credit bureaus and pull a copy of your credit report to see if you’re trustworthy. (That information is sometimes summarized into a single number, your credit score.)

One problem with this system is that if your credit report is inaccurate for some reason, particularly if that inaccuracy is bad, it can cause people to think you’re disreputable when you’re not, and that can result in denied loans, higher interest rates, and other problems.

The solution, then, is to check your credit report regularly, and there’s no better time to start than now.

The US government’s official portal for checking your credit report is through AnnualCreditReport.com. That’s where you should go to see your report. You are allowed to see your report once per year from each of the three credit bureaus. I recommend spacing those checks out throughout the year. Perhaps you can check your Equifax report in January, your Experian report in May, and your Trans Union report in September, for example.

So, just check one of your reports now and put it down on your calendar to do the other two spaced out during the year.

When you check your report, look at it carefully for any and all inaccuracies, and if you find anything wrong, start hunting it down. Start by contacting whoever it is that has put something inaccurate on your report and try to get it corrected. If you find no solution there, you can contact the credit bureau directly.

Start a savings plan for this year’s holiday season.

The holiday season’s over and, if you’re like many Americans, you’re probably dreading the bills that are coming as a result of all of those expenses. Holiday thrills bring January bills, as they say.

A better approach that doesn’t leave you paying money to lenders throughout the following year is to simply save small amounts steadily throughout the year so that you have plenty of money for the holidays.

If you can manage to save $20 a month starting now, for example, you’ll have $1,000 in hand in mid-December, and that can be a real game-changer.

So, what can you do right now? You can set up an automatic transfer that moves $20 each week from your checking to a savings account automatically. One efficient way to do this is to set up an online savings account with a bank like Ally so that the transfer pulls the money out of your local bank and keeps it out of mind until next December when you need it, at which point you can just transfer it back to your checking account.

Set it up now and you’ll be so glad you did this December.

Make 2020 your best year yet!

Even if you don’t have any big goals for the year, simply starting things off with these financial tasks can set you up for a great year to come! Good luck!

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