MONEY Budgeting

8 Ways to Simplify Your Finances

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Marc Romanelli—Getty Images

Consolidate. Prioritize. Automate.

Do you find yourself overwhelmed by your financial responsibilities? Do you sometimes ignore your accounts and budget because thinking about them adds stress or confusion? Understanding the steps for good financial decision-making and simplifying your role can help you take control of your finances. Check out the following tips to create an easier structure in your finances and watch how each small change adds up.

1. Pare Down Your Accounts

You probably don’t really need more than one savings or checking account or to have accounts with many different financial institutions. One method to simplify your financial life is to consolidate your bank accounts to one checking account and one savings account to cut down on the paperwork and tracking.

2. Prioritize

Picture your future and choose a few financial goals to focus on at a time, like boosting your 401(k) or growing an ample emergency fund. It’s important to be specific about the goals you want to accomplish and plan the clear steps you need to take to reach them. Writing your goals down can help you stick to them.

3. Consolidate Insurance

Just as you probably don’t need multiple bank accounts that serve the same purpose, you probably don’t need multiple insurance accounts. You can save money and stress by bundling your assets that need insurance and consolidating your policies. You can compare the various companies to see who will help you save the most in this process.

4. Keep Track of Your Comprehensive Budget

When you are ready to get control of your financial life, it’s important to make sure you are living within your means. It is important not just to create a realistic, comprehensive budget but to take the steps to stick to that budget. Once you start tracking where you money is going, you may be surprised by how much you are spending in each category and how your money can be put to better use.

5. Pool Your Plastic

If you have debt, you may want to consider transferring the balances on high-interest credit cards to a credit card with a lower rate. This will help cut down on your money management and save you some money on interest. It’s important to inquire about balance-transfer fees and factor that into your decision.

To get a good balance transfer offer, you’ll need a decent credit score.

6. Go Paperless

You only need to keep important papers, so go through what you have and shred whatever you don’t need. Then streamline your future financial records by going paperless. Most companies and banks offer this feature and this can cut down on your clutter and filing. Call to set up paperless statements or bills and keep folders on your computer to help you track where your money is coming and going.

7. Automate Good Habits

If you can’t trust yourself to follow through on positive financial behaviors, consider not giving yourself the option. Set up direct deposits and contributions so you can watch your financial goals come into grasp without having to be proactive about it. If you never see the money sitting in your account, you can’t spend it.

8. Inventory Your Stuff

Take stock of everything you own, from clothes to furniture. You will find that you probably have more than you need and even things you have forgotten about. You can sell or donate what you don’t need and watch your financial clutter decrease with your life clutter.

The easier your financial management is, the more likely you are to stay on top of it and be in better fiscal health. Use the tips above and search for your own shortcuts to make this strategy a reality and watch your assets grow.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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MONEY credit cards

3 Ways to Strengthen Your Weak or Nonexistent Credit

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Niklas Bernstone—Getty Images

Here's how to build a strong score.

Credit history a little on the feeble side?

If you’re new to credit, you might not have enough of a history to get the great deals that you want. Or even generate a score.

Here are three strategies to build a history and a strong score:

1. Consider a “credit builder” loan. Think of it as vitamins for your credit score. You borrow a small amount — often anywhere from a few hundred dollars up to $1,000 — from your credit union or bank. As you make payments, you create a record of good credit, says Michelle Dosher, spokeswoman for the Credit Union National Association.

Some versions may require a chunk of (refundable) money as collateral, while others won’t, says Jim Simon, senior vice president and chief lending officer for TCM Bank N.A.

To compile enough of a credit history to generate a FICO score, the score used by the majority of lenders, requires a six-month loan history, says Ethan Dornhelm, senior principal scientist at FICO. With the VantageScore, you’ll have a credit score after one month, says Jim Akin, senior manager of digital communications for VantageScore Solutions.

2. Get a “starter” credit card. Some institutions, especially credit unions and community banks, offer cards specifically for people who are so new to credit that they don’t have a score, says Simon.

Credit lines are lower, often $500 to $1,500, he says, and interest rates are higher, frequently between 18 to 27 percent.

The good news: A credit card will likely help you build a higher score than a loan. Both the FICO and VantageScore formulas prefer revolving credit such as credit cards to installment loans (auto loans or personal loans), according to representatives with both companies.

The bad news: If you want to build the best scores, you need to keep your balance as low as possible. The best scores go to those who use less than 10 percent of their credit limits, says Dornhelm.

The wisest choice is to use the card, keep balances low and pay it off in full each month.

One option that keeps credit utilization low is to pay off balances as you use the card, sending in your payments multiple times throughout the month, says Barry Paperno, who writes the weekly “Speaking of Credit” column for CreditCards.com and is a former credit bureau industry executive.

3. Opt for a secured card. If you can’t get a conventional card with a small credit line, this option lets you give the lending institution a deposit that could be as much as your credit limit. You still pay the bills each month, as you would with a regular credit card. And when you close the card or convert it to a traditional credit card, you get back your deposit (provided you don’t owe anything on the card, of course).

If you’re shopping for a secured card, do your research to be certain you’re getting a legitimate credit card, not a product designed to maximize fees, says Simon. At the most, you should pay a deposit and possibly an annual fee, “and that’s it,” he says.

Also understand exactly how and when you’ll get back that deposit, he says.

If you’re looking to strengthen your credit history, make sure the card actually reports to the credit bureaus every month. That’s what will enhance your history enough to generate a score.

Comparison shop for a card that has the fewest fees and the lowest charges on the fees it has, says Simon. Prioritize fees over a low APR, since if you don’t carry a balance, you won’t have to pay interest, he says.

What you might not know: Neither the FICO formula nor the VantageScore formula differentiates between secured and unsecured credit cards, according to execs with both companies. As long as you treat your cards right, your score will benefit equally from either one.

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MONEY Debt

Living Out of a Suitcase Was The Best Thing for My Family’s Finances

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Richard Drury—Getty Images

Friends were shocked when we told them we were selling everything and moving from one country to the next, but we wouldn’t have it any other way.

The year was 2013, and by all outward appearances, my husband, William, and I were living the good life in St. Louis.

He was finishing up his MBA and had an internship at a well-known consumer-products company that was sure to put him on the corporate fast track—all while running his own successful tutoring and test-prep business on the side.

I was juggling getting my Ph.D. in reproductive epidemiology while also being a mom to our pride and joy, Desmond, then 2.

But during William’s last semester in the MBA program, our family took a life-altering trip to Spain as part of his study abroad offering. What was just supposed to be a three-month trip overseas turned into two years … and counting.

Since then, we’ve lived and worked in five different countries, from Hungary to Peru—and have even added to our brood along the way.

Our nomadic lifestyle may seem a bit unorthodox to some—family and friends were shocked when we told them we were selling all of our belongings to pack up and ship out—but we wouldn’t have it any other way.

The best part? It’s done wonders for our finances.

Truth be told, the career and life paths we’d always envisioned for ourselves weren’t quite panning out.

Despite the fact that most business students would have killed to have William’s internship, he was disillusioned by corporate life.

The monotony of his day-to-day routine coupled with having to work for someone else, just didn’t feel natural to him. He wanted something more.

I was feeling a similar dissatisfaction. I’d been working on my Ph.D. for almost five years, and continuing my research while caring for a little one left me struggling to maintain motivation. I was gradually falling out of love with academia.

All of this prompted William to pose a question before we embarked for Spain for his study abroad program: What if we didn’t come back to the states at semester’s end?

What if we stayed in Europe for a few more months—one last hurrah before putting down roots?

I thought he was crazy.

We had a toddler and a mountain of debt—more than $100,000 in student loans between us, a $25,000 business loan, and about $6,000 of credit card debt. We couldn’t go gallivanting around Europe like carefree college students.

But when I saw he was dead serious, it stirred something in me. I couldn’t help but feel like maybe this could be an amazing adventure for our little family.

So we got out of our lease, moved our stuff into storage, and found an apartment in Barcelona through Airbnb for $1,200 a month—not supercheap, but still less than the $1,500 we were spending to rent a home in St. Louis.

Once we settled in Spain, William had yet another crazy idea: What if we never went back and instead built out his tutoring business overseas?

We had both been employees of the company back when we lived in Salt Lake City, and when the opportunity arose, the entrepreneur in him decided to take out a business loan to buy the company from its previous owners.

When we moved to St. Louis for his MBA program, William continued to manage the business remotely, hiring two codirectors to oversee the roughly 15 tutors we employed back in Salt Lake City. He drew a salary of about $35,000—but being abroad made us realize there was an even greater opportunity to make money.

William could meet with international schools throughout Europe and pitch them our services, in which one of our tutors would spend a few weeks doing SAT/ACT prep at their schools to help students who wanted to attend college in the U.S.

I believed in the plan, but the thought of living in—not just visiting—so many different countries terrified me. But if we were going to try this, it was now or never.

So I put my Ph.D. on hold and became our family’s Chief Travel Officer.

5 Countries, $300 Rent, $0 Credit Card Debt

We stayed in Barcelona for about five months, taking in the culture, loving every minute—and mapping out our next destinations based on whether there were international schools close by, our interest in the region, and the cost of living.

Our next, three-month stop was Budapest, Hungary, which was a much cheaper place to live. By avoiding renting in a tourist area, we were able to get a great apartment for just $300 a month.

It was then that I realized how living abroad could actually be good for our finances because, if we planned well, life could be so much cheaper.

When the holidays rolled around, we headed back to St. Louis to sell all of our personal belongings and officially leave our U.S. life behind. But, first, we made a pit stop in Rome—which is when we discovered that our second baby was on the way!

Giving birth in a safe place where I felt comfortable, was important to me, which is why we chose to live next in Colombia. I was born there and still had family there, so it was comforting to know we’d have some support.

After finding a fully furnished apartment in Bogota for $900, we headed out there in February 2014—and welcomed our second son (named Roman, in a nod to Italy) in the spring.

We didn’t have international health insurance at the time, so we paid out of pocket for the birth, which only added up to $1,800, including all of my prenatal visits. Since then, we’ve gotten family coverage for just $200 a month.

In the eight months that we were in Bogota, William took countless meetings, nabbing new contracts and growing the business even more. He gradually increased his salary to about $45,000 a year, and the company helps subsidize such expenses as flights for business meetings, as well as our rent. I also brought in occasional income by doing some freelance research and public-health data analysis on the side.

While we don’t get a tax break from living abroad—we still have to file U.S. income taxes—we do get some tax write-offs for any business-travel-related expenses we have to cover.

This new life has allowed us to get our $6,000 credit card balance down to zero last year—and pay off our $25,000 business loan.

And while chipping away at our student loans will be a slower endeavor, we’ve been able to contribute to a 529 college savings account for Desmond, open a trust account for Roman, and maintain an emergency savings fund of about $2,000.

Our next goal will be to resume contributions to a Roth IRA, which we’d put on hold during graduate school.

Living frugally, of course, helps a lot. For starters, we always opt for cheap housing, even if it means choosing less-prime neighborhoods. Our rent abroad—including furnishings, WiFi and utilities—has averaged $1,000, which is about $500 less than what we were paying in St. Louis.

But, without a doubt, our biggest savings has come from no longer having to pay for gas, insurance and repairs for two cars—we quickly familiarize ourselves with public transportation in every new city. I also do a lot of cooking at home, using seasonal and local ingredients as much as I can, to save money.

In cities where the cost of living is higher, we keep stricter tabs on our expenses, so we know when we’re close to going beyond our budget. Plus, living out of suitcases means we can’t accumulate much stuff—so no extravagant shopping sprees for us!

These frugal habits have accompanied us in the five countries we’ve lived in—Spain, Hungary, Colombia, Peru and Mexico—and the dozens of places we’ve visited. We’re currently back in Bogota, but it’s off to Japan next to build an East Asian client base.

The Intangible Perks of Our International Life

One of my initial concerns with living abroad was how the kids would adjust, but they’ve taken to the nomadic life with ease.

Desmond has attended four different preschools, and in just a few short months, we’ll enroll him in an all-Japanese kindergarten. Once he gets to first or second grade, we plan to home-school because we know international schools can get very pricey.

In our opinion, these experiences have helped shape Desmond into an outgoing, fearless kid—not to mention that he now speaks Spanish fluently!

People ask how long we plan to keep up our gypsy lifestyle. The honest answer: I’m not sure. There are times when I think I’d love to own a permanent home, but then I look around and realize that we’re living most people’s once-in-a-lifetimes.

We’ve spent the past few years marveling at Machu Picchu, taking overnight train rides through Transylvania, and braving the outdoor markets of Santiago.

We may not be millionaires, but we also aren’t struggling. When we started this journey, the company had one international class. We have 11 classes starting this fall, and even more in the works for the spring semester—which has more than doubled our profits.

Over the last few years, my most fulfilling memories have been watching my children play with kids who speak different languages and hold different beliefs. I’ve also come to realize that the best memories happen when you’re willing to surrender a little control and embrace the unexpected.

At the very least, what our nomadic life has taught us is that when we finally do settle down, we won’t need a great, big house with a fancy car to be happy. I’ve learned that you don’t need to have a permanent address to feel like you have a home.

–As told to Maryanne Hayes


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MONEY credit cards

You May Have a Second Credit Report You Never Knew Existed

Darryl Estrine

It's rare, but it happens.

Credit reports often feel like a mystery, particularly if you haven’t seen yours. But what if you discovered you had a second credit report you didn’t know existed?

“It’s a pretty rare thing,” says Carla Blair-Gamblian, director of credit education for Veterans United. But every once in a while she’s seen situations where a client ended up with two credit files at the same credit bureau.

Referred to sometimes as “split files,” “fragmented files” or even “phantom files,” part of your credit history ends up on one report and part of it is on another, usually “hidden” file. Blair-Gamblian says that she’s seen only three or four cases of it in the past six or seven years, but they were always women. She speculates that a name change along with an address change may cause the mix-up — especially if a Social Security number is entered incorrectly.

“Back in the days of the manual credit files, we would see it pretty frequently,” says Connecticut bankruptcy attorney Gene Melchionne, who worked for a credit bureau before files were computerized and files may have included arcane details such as the color of your wedding dress. “Usually it was the result of someone using multiple Social Security numbers or birthdates so we wouldn’t be able to match the credit inquiries completely,” he says.

How do you know if your credit report has a doppelganger? One major tip-off is when accounts from major lenders appear on one or two of your credit reports but not all three.

“It is certainly possible that you have a creditor that doesn’t report to all three bureaus so maybe you shouldn’t be alarmed, especially if it’s a smaller regional lender,” says Blair-Gamblian. But if you have major creditors that report to all three bureaus — Experian, TransUnion & Equifax — there is no reason that they shouldn’t appear on all three of your credit reports.

If a split file does occur, it can be difficult to straighten out. After all, how do you request a credit report that the credit reporting agency says doesn’t exist? You may have to escalate a complaint with them and mention specifically that you believe there may be two files.

Thankfully, most consumers will never have to deal with this problem. “I haven’t seen anything like a split file since the dawn of computers,” say Melchionne. “In fact, quite the opposite is more likely; files that have been combined due to similar information. When I bought my first house, I was told that my credit at the bank had been confused with my father’s and that I paid a mortgage off when I was 12. ”

To prevent problems such as a split file or mixed file, always be sure to use complete and consistent information when filling out a credit application, especially if you are a junior or senior or have a common name. And to ensure your credit reports are accurate and complete, you need to check them. You can get free annual credit reports at AnnualCreditReport.com.

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MONEY

These Credit Cards Will Hit You With the Most Fees

person pulling credit card from wallet
iStock

Plus, how to avoid other penalties that will cost you money.

Credit cards are powerful tools. There are products that let you earn a free flight; collect cash back on all purchases at a time when interest rates rest at next to nothing; or finance a big expense with a lengthy 0% APR introductory period.

But the advantages credit cards offer come at a price—in some cases, an abundance of fees. That’s why consumers need to be vigilant when it comes to selecting the credit card that’s right for their spending needs and behaviors.

That means steering clear of cards like First Premier Bank Credit Card and its Secured MasterCard, which have the potential to ding consumers for 12 separate fees, according to a CreditCards.com survey released today, based on the 100 credit cards used to calculate the site’s Weekly Rate Report. First Premier Bank Credit Card even charges you 25% of whatever increase you receive on your credit limit. Only one product in the survey was completely fee free: PenFed Promise Visa.

“This drives home just how much difference there can be between cards,” says CreditCards.com senior analyst Matt Schulz. “Banks make tons of money off fees, and the vast majority of them can be avoided by shopping around and setting up automatic payments to ensure that you don’t miss a payment.”

Credit card penalties generally fall into two categories: fees based on your actions and fees imposed by the card, such as annual or foreign transaction fees.

Almost all cards penalize you for behavioral mistakes. For instance, CreditCards.com found that all but one card assess a late fee, usually $35. More than eight in 10 will hit you for another $35 for returned payments, i.e. a bounced check. And all but two of the cards charged consumers a cash advance fee, which runs the greater of 5% of the advance or $10.

You can avoid late fees by paying your bill on time. Try setting up auto-payment on your credit card’s website if you’re bad with dates. Just because you’ve erred in the past doesn’t mean that you’re without recourse. In an earlier poll, CreditCards.com found that 86% of those who asked to have a late payment waived were successful in avoiding the fee. The problem is that only 28% of folks requested extra latitude. As more banks adopt instant messaging on their sites, cardholders shouldn’t be shy to ask for a fee to be canceled if they slip up once in a blue moon.

While you can eliminate a number of fees by staying on top of your finances, you’ll need to do some smart shopping to avoid others. Annual fees are relatively easy to shed: only 25% of cards have them, and 10% waive the fee the first year. (In some cases an annual fee is acceptable if the rewards are rich enough.) Nine of 10 cards that allow balance transfers charge a fee (the greater of either $5 or 3% of each transfer), but some, like MONEY Best Credit Card Chase Slate, won’t charge you anything. (You’ll need to make your transfer within two months of opening your Slate account to avoid the fee.)

Check out MONEY’s Credit Card Matchmaker to find a card that best fits your borrowing profile.

MONEY credit cards

Do You Have to Respond to a Fraud Alert on Your Credit Card?

Man checking out his credit card
Getty Images Man shopping online with credit card and laptop

Not necessarily, but you may regret it if you don't.

If you own a credit card, chances are you’ve experienced the disquiet that comes from an alert saying someone may have stolen your card.

Whether you got the bad news via text, email or an old-fashioned phone call, word of potentially fraudulent behavior on your credit card seems to be one of the pernicious downsides of shopping in the modern world. Given the sophistication of credit card thieves, this reality will likely still be a part of your consumer life even as issuers and stores transition to “chip and PIN” cards — plastic that’s embedded with computer chips and requiring a pin to be entered upon purchase — over the rest of the year.

Dealing with fraud alerts can be time-consuming, so you may be wondering if you have to respond to every single time, or whether your card company can just take care of the problem itself. After all, you’re shouldn’t be liable for charges that you didn’t actually make.

“You certainly have no obligation to respond to a credit card fraud alert or even a call from your credit card issuer’s fraud department,” says CreditSesame.com’s John Ulzheimer. “There’s nothing in your cardholder agreement mandating that you respond.”

Consequences Ahead

That said, not replying may have consequences. If you just ignore the messages, Ulzheimer says, “the issuer will likely disallow recent charges and suspend your credit line.”

One factor to consider: whether the charge is in fact fraudulent. “If the charge is legitimate, it’s not a bad idea to confirm that with your issuer,” says Credit.com’s Gerri Detweiler. “That helps them learn from your spending patterns and may help prevent them from flagging similar purchases in the future — or shutting down card use until you confirm you made the charge.”

And either way, if you want to keep using your card, you’ll probably need to check in.

Each instance of fraud is different, and issuers react to various circumstances on a case-by-case basis, but generally your card company will want to address the situation with you before new charges can be applied. “We can’t require a card member to respond to an alert, but they may be at higher risk of disruptions until the account concern is resolved,” says American Express spokesperson Ashley Tufts. “If we reach out, and ask you for your help verifying or declining a charge, then yes, we would need a response in order to resolve the issue.”

If American Express determines that there has been fraud and a new card is necessary, the company would notify the card member, “but no action would be needed on their part. A new card would arrive, and they could activate it.”

Discover has a similar approach. “There are varying circumstances that could initiate a fraudulent alert, but typically, at Discover, if a charge prompts a fraud alert, that charge will be declined and the card will not be active until the card member responds,” per Discover’s policy.

Changing Cards

If your issuer finds that someone made unauthorized charges with your card, you’ll almost certainly not be allowed to keep it — which means you’ll have to go through the hassle of reworking all automatic payments tied to that card. But “many issuers will overnight a new card to you, especially if you’re a good customer,” says Ulzheimer, who once had a card replaced within 24 hours while he was on vacation.

Whether you have to respond to the alert or not, credit card experts will tell you to contact your issuer immediately to determine if fraud did in fact occur. After all, credit card issuers aren’t in the business of disrupting legal spending.

“In general the contact you receive is just an FYI, and they will reverse the charge and/or issue a new card if the account has been compromised, [letting you follow up] with written correspondence explaining the details,” says CreditCardForum.com’s Ben Woolsey. “However, when I’ve had this experience I’ve felt compelled to call the issuer just for peace of mind and to understand what happened.”

MONEY

3 Ways Your Roommates Can Wreck Your Credit

Roommates looking over bills with laptop computer
Jamie Grill—Getty Images Roommates looking over bills with laptop computer

Here's how to protect yourself

John had two roommates bail on him, leaving him to face eviction on their Brooklyn apartment alone, he says. But it gets worse: “I am the only one being hit with (a) judgment,” he writes on the Credit.com blog, and “my landlord’s lawyer wants to collect $20,000 from me.”

Rah commented that he and his roommate shared a lease. When they ended up owing “$600 in damage,” the burden fell to him. “I can not get in contact with my old roommate, she’s in hiding probably. Anyways this is leaving me the debt. How do I hold her accountable as much as I am being held accountable?” he asked.

Sharing a home or apartment with one or more roommates can be a great way to split expenses. But it is not without hazards. In fact, there are three ways a roommate can ruin your credit.

1. ‘Our’ Lease Becomes ‘Your’ Lease

Signing a lease with someone else is just like co-signing a loan: you are ultimately on the hook for the entire amount if the other person doesn’t pay. “If you sign a contract, even if someone signs it with you, you are responsible for performance under the contract,” says Ohio consumer protection attorney Barbara Quinn-Smith. ”If you have signed a lease you are fully responsible for the rent … and the landlord can go after both of you.”

This is perhaps the most crucial thing to understand going into a lease: You could wind up paying the entire rent, plus more, if there are damages to the property. Can you afford that? If not, you can face eviction and/or collection accounts for balances owed, both of which can severely hurt your credit. (You can read more on how eviction impacts your credit scores here.)

2. Utility Bill Woes

Sharon said that when she decided to move out of the apartment she was sharing with a roommate, the power company refused to disconnect her service in order to take her name off the account. “They tell me it is illegal for them to do so. I can’t think that just because I once lived here and am going elsewhere that I can be forced to leave this service in my name forever …. Help.”

And Sarah found a past due account from a cable/TV/Internet provider on her credit report. “I had transferred the account to my roommate when I moved out of the apartment. Apparently service was terminated in late 2012 and the last tenant failed to pay the last bill,” she wrote.

One of the crucial things you’ll have to decide is whose name the utilities should be in. If they will be in your name, what happens if you leave sooner than your roommate? If they are not in your name, what happens if they leave early, or if they don’t pay?

And what if there is an unexpectedly large bill? Would you and/or your roommate be able to pay it? If not, who could be stuck with it?

Utility providers don’t typically report payments to the credit reporting agencies. But if bills remain unpaid they will be sent to collections, and those accounts do hurt credit scores.

3. They Steal Your Identity

Most cases of identity theft involving roommates don’t turn out to be as sensational as Brittany Ossenfort’s, whose roommate allegedly stole her identity, mimicked her appearance and used her name when arrested for prostitution. But ID theft situations don’t have to be dramatic to be traumatic.

“We hear, on a regular basis, that victims know their identity thieves,” says Eva Velasquez, president/CEO of Identity Theft Resource Center. While she isn’t aware of how often the perpetrator is a roommate, “identity theft is often a crime of opportunity, and people that have ready access to your information have plenty of opportunity,” she wrote in an email. “Especially when they have access for long periods of unattended time, like a roommate would.”

Identity theft can wreak havoc on your credit reports and scores, and sometimes takes months — or years — to resolve. In the meantime, it may be difficult to get credit.

How to Protect Yourself

If you decide the benefits of a roommate outweigh the risks, here are some ways to protect yourself.

  1. Screen your roommate as a landlord would. While exchanging credit reports is probably too much information (and could make it easier for the recipient to commit fraud), you could both get your credit scores and share those results with each other. You can each get a free credit score and analysis of your credit at Credit.com.
  2. Treat personally identifying information just as you would any other valuable, suggests Velasquez. “Guard it, allow only limited access to it, and keep track of it,” she recommends. “Would you leave a $100 bill sitting out on the table? Apply this same principle to your financial statements, tax returns and information, medical info, and any other documents that have your information, particularly your Social Security number on them.”
  3. Monitor rent and utility bills — and your credit. If you and your roommate write separate checks for your shares of the rent, make sure their payment actually gets paid. When you move out, get a statement from the landlord indicating that the balance you owe is zero. If you are giving your roommate money for your share of the utilities, make sure those bills are getting paid. And monitor your credit. Get your free annual credit reports and review your free credit scores on a regular basis to help you spot problems.

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MONEY Budgeting

6 Ways You’re Cheating on Your Budget

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Jeffrey Coolidge—Getty Images

#4: You're keeping your money too accessible.

If your budget always seems to fall short, you might tell yourself it just doesn’t work or that you’re plain better off without one. However, the problem might not be the budget, but rather the person who created the budget — you.

A spending plan isn’t going to follow itself, so if you get into a pattern of cheating on your budget and making excuses, you might never stop overspending. An honest examination of your budget and spending behaviors might reveal clues such as these as to why your budgets haven’t worked in the past.

1. Overstating Your Income

Overstating your income doesn’t work when creating a budget. Obviously, you need to include all your income when budgeting, but only if the income is regular or consistent.

Some people make the mistake of including overtime income in their budgets. But since overtime income can fluctuate from paycheck to paycheck, adding this income to your budget can make it appear like you have more money than you actually do.

If you base a budget on money you don’t have, you could end up overspending throughout the month, and you might have to use a credit card to get by.

2. Denial About How Much You Actually Spend

Not only are some people in fantasyland about how much they earn, they’re also in fantasyland about how much they spend. Guesstimating monthly expenses isn’t going to work. You need to be as realistic and accurate as possible.

“A budget should always include actual numbers, such as the actual income received that month and actual expenses,” says Michelle Schroeder-Gardner, author behind the personal finance blog Making Sense of Cents. “Too many people use numbers that they estimate or numbers they wish they were at, which is a big mistake because an estimate doesn’t help you grasp the real picture of your finances.”

To illustrate, if you normally spend $120 a month on fuel for your car, don’t under account for this expense and only budget $80 a month, unless you plan on adjusting how much you commute. Take a look at bank statements or monitor your spending for an entire month to get an accurate picture of your expenses.

3. Never Reviewing Your Budget

A budget isn’t a Crock-Pot, so you shouldn’t expect to set it and forget it. In the beginning, your budget won’t be perfect, and you’ll need to make tweaks here and there until you get it right. Also, some unexpected expenses might result in extra spending, so you have to monitor your budget regularly to make sure everything stays on track. And if you spend money unexpectedly outside the budget, be ready to adjust or reduce how much you spend in other categories to avoid overspending or having to use a credit card.

4. Keeping Your Money Too Accessible

A budget is the perfect tool if you’re always in the hole. But a budget doesn’t magically cure a spending problem. You still have to recognize your weaknesses and limitations, and work in harmony with your budget. If you have a problem controlling spending, yet you walk around with extra cash and credit cards in your wallet, there’s a pretty good chance that you’ll cheat and blow your budget. Don’t make it too easy to spend money. Only carry the cash you’ll need for the day and keep your credit cards at home.

5. Forgetting to Budget for Splurges

You need to include a little splurge money in your budget so it doesn’t feel like you’re depriving yourself. Giving yourself spending cash might seem a step in the wrong direction if you’re trying to save money. However, depriving yourself almost always guarantees that your budget will fail.

“No budget on earth will work long-term if you don’t allow for some fun stuff, even if it’s as small as a chocolate bar once a week,” says Avery Breyer, best-selling author of Smart Money Blueprint: How to Stop Living Paycheck to Paycheck.

6. Stealing Money From Other Spending Categories

This is your budget, so you have to decide a reasonable amount to spend in your various spending categories. If you want to eliminate a category in order to put additional cash in another area, this is entirely up to you, but you shouldn’t start a practice of stealing money from essential categories to satisfy a need for fun.

If it’s the 20th of the month and you’ve already blown through your entertainment budget for the month, don’t steal $100 from your housing budget in order to have a good time with friends this weekend. Spending the money you need for essential expenses can put you in the hole. And again — what’s the point of budgeting if you don’t stick to it? Be honest with yourself, and your money will thank you.

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MONEY Saving

4 Quick Phone Calls You Can Make Right Now to Save Money

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Want to lower you bills? Speak up.

With late fees, penalty interest rates and complex credit-scoring algorithms, it often feels like the world of personal finance is designed to be unfavorable to the consumer. As challenging as it may be to keep everything in order, there are plenty of things about your finances you can control, even when it seems like someone else is calling the shots.

If you’re looking for ways to save money, start asking questions. Can you qualify for a credit card with better rewards than the one you have? Would a different cellphone carrier give you the same service for a lower price than what you’re paying now? Researching alternatives is always a good idea if you want to change your expenses, but you may be surprised how much power you have in your existing relationships. Sometimes, all it takes is a phone call to save money.

1. When You Get Hit With a Late Fee

Even the most organized consumers miss a deadline now and then. With many bills, that results in a late fee, but you might be able to get out of it. Often, if you put in the effort to contest a fee (particularly if you have an otherwise great track record of paying things on time), you can get it waived. After paying your bill, call to see if the customer service department will reverse the fee. The worst that can happen is you get turned down and have to pay the fee, but you’ll definitely have to pay if you never ask for an exception. If you’re regularly late with payments, you might want to also shop for a credit card that doesn’t have late fees or forgives late fees for good customers. For example, the winner of the Best Simple Credit Cards in America this year has no late fee.

2. When Your Insurance Premium Seems High

Shopping around for insurance is an important part of managing your finances, because you can often get comparable coverage for varying price points. Before you decide to jump ship on your current provider, call and ask about any discounts for which you may be eligible. The insurer probably wants to keep you as a customer and may be willing to help you save money in order to do so.

3. When Your Monthly Bill Goes Up

Promotional offers are great — until they expire. Internet services commonly provide an introductory rate but increase their prices after you’ve been a customer for a year. Before you decide to suck it up and pay the higher bill (or go through the hassle of changing service providers), call to ask about any deals going on that could add value to your subscription or keep your monthly expenses down.

4. When You Get Charged for Something You Didn’t Buy

Whether it’s a mistake or an instance of fraud, you may sometimes find charges on your credit or debit card statements that don’t reflect a purchase you’ve made. That’s one of the reasons checking your account activity is so important. As soon as you find a transaction you didn’t make, call your financial institution to dispute it. It helps if little time has passed between the transaction’s occurrence and your report.

The same thing goes for errors on your credit report. Inaccurate, negative information could cause you problems when trying to get a loan (or a variety of other things), potentially costing you a lot of money if the errors hurt your credit score. To avoid a problem like that, regularly review your credit history, and immediately dispute any inaccuracies. You can get your free annual credit reports from each of the three credit reporting agencies.

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MONEY privacy

5 Secrets Identity Thieves Know About You

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Here's how to get your peace of mind back.

Identity thieves don’t want you to read this article.

They’ve made an entire industry out of living off of other peoples’ good names. And when you know their typical tricks, stealing your identity is much harder.

Unfortunately, not enough people know what puts their identities at risk for theft. And that has helped keep identity theft the No. 1 consumer complaint to the Federal Trade Commission for 15 years running. Do you like the idea of thieves using your name to make money and cause you financial headaches? Of course not. So take a minute to make sure you’re aware of five foolish behaviors that identity thieves love and how to fix them.

1. You Hand-Deliver Valuable Personal Information

To identity thieves, your trash can and recycling bin are seen as an “inbox.” They appreciate when you toss out anything with personally identifying information — especially credit card offers, bank statements, insurance-related materials, and medical statements or records.

The fix:

  • Buy a quality crosscut shredder and give identity thieves an impossible puzzle to solve.
  • Shred everything with your name and any other important information on it before throwing it out (thieves will move on to easier targets).

2. You Leave Virtual Doors Open

There are entire organizations dedicated to computer hacking and scams. So if you’re using a simple password or not employing the right security measures on your computers, smartphones and tablet devices, your information is at a much greater risk. It’s like leaving a door open with money sitting on a table just inside.

The fix:

  • Be sure to use security software that includes a firewall, antivirus and spyware programs, and regularly update them.
  • Set your devices to automatically install security updates from manufacturers.
  • Use strong passwords that contain a mix of eight or more numbers, symbols and upper and lowercase letters. Don’t use anything obvious, such as your child’s or pet’s name. Also be sure to change passwords often, and use unique passwords for important sites.

3. You Provide Ready Access to IDs & Documents

Your house and office have a treasure trove of documents with identifying information and important IDs, including passports, Social Security cards, birth certificates and much more. If they’re not locked up, anyone with access to your house could take a quick smartphone picture or even grab them.

The fix:

  • Put important IDs and files into secure drawers, closets or safes.
  • Keep them locked away when you’re not using them.

4. You’ve Never Visited AnnualCreditReport.com

Your credit reports include any credit- or loan-related accounts that are opened in your name. Even if you don’t need to apply for credit or a home or car loan, it’s important to ensure that your credit is clean and your credit score is as high as possible for when you do need it.

The fix:

5. You Don’t Guard Your Social Security Number

A Social Security number is like a master kay. Once identity thieves have it, along with a few other personal details, they can establish credit or potentially gain access to your existing accounts. That’s why you want to limit how and where you share your Social Security number.

The fix:

  • Don’t carry your Social Security card or number in your wallet or purse.
  • Never give your SSN to someone you don’t trust.
  • Provide your SSN only when it’s required.
  • Avoid using your SSN as an identifier (if a company or medical provider wants to do this, ask them not to).

By taking these steps, you can rest more easily knowing you’re not an easy target for identity theft.

Read next: I Ate Thanksgiving Dinner With My Identity Thief for 19 Years

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