When Life Blows Up Your Well-Laid Plans

Job loss, business failure, involuntary retirement, divorce, disability or the death of a breadwinner — these are just some of the ways our finances can force us to come up with a Plan B. That’s never as simple as downloading a list and ticking off completed assignments, however.

Checklists can be helpful, for instance when you’ve just been laid off. But the biggest task after financial loss may be dealing with your emotions after the future you had envisioned disappears.

Be realistic about your emotions

People who lose a loved one expect to grieve. People who lose their financial security or a standard of living suffer “ambiguous loss,” where many elements of their lives are the same but a major element is now gone, says financial therapist Edward Coambs of Charlotte, North Carolina.

“You know what’s happened, but it’s not like you get a funeral for it,” says Coambs, a certified financial planner and couples therapist. He’s a member of the Financial Therapy Association, a group of advisors who combine financial and psychological counseling.

Acknowledge that your grief is legitimate rather than trying to minimize what you’re going through, Coambs says. Also, don’t expect grief to proceed in predictable stages. Psychological research shows that grief is more dynamic than that, and people may feel shifting emotions that can include sadness, despair, confusion, disorientation, fear, anxiety and even relief.

“A lot of the grief around the financial loss is going to feel kind of unexpected,” Coambs says. “‘Why am I crying now? Why am I angry now? Why am I disappointed or lethargic?’”

This process won’t be quick, Coambs says. Our brains get used to our habits and routines. When those get dramatically disrupted, our brains need to catch up.

“It takes time for the neural pathways to adjust and change, right? My brain is literally needing time to reorganize itself,” Coambs says.

You can help this process by discussing your emotions with someone you trust, says financial therapist Preston D. Cherry, a certified financial planner in Lubbock, Texas. Cherry says writing can help. He writes poetry, but writing in a journal is also effective. Studies have shown that expressive writing — writing nonstop for 15 minutes or so each day without inhibitions about the traumatic event or experience — can help people deal with emotional fallout. Writing can help us organize our thoughts and give meaning to what happened, which can help us break free of ruminating or brooding.

Talk to your kids

Many of Coambs’ clients have problems with money that stem from childhood traumas, often because of a parent’s layoff or the loss of a family business.

“What they often end up seeing is the parent lose their sense of self, fall into depression and despair, and never make it out,” Coambs says.

Processing your emotions can help you avoid that fate, and if you’re raising kids you’ll also want to talk to them in age-appropriate ways about what’s going on, he says. Children need to know this isn’t a problem they created and it’s not their responsibility to fix it.

“Kids will assume inappropriate levels of responsibility for negative outcomes financially,” Coambs says. “Parents can say, ‘Mommy and Daddy are taking responsibility for this. We’re going to try to find the answers. You can come to us with your fears and concerns.’”

Know when to get help

If you’re struggling, keep in mind that this is just one phase of your life and that it, like the current pandemic, will pass, Cherry says. He also recommends regular “self audits” — taking time alone to reflect on what’s happened, work through your feelings and start to consider possible futures.

But when you’re feeling stuck or isolated, you may need to seek professional help. If you’re employed, your company may provide mental health resources. If money is tight, 211.org may be able to point you to free or low-cost treatment.

Depression or anxiety that persists for weeks or months isn’t normal and may need medical treatment. If you don’t have someone to talk to who is empathetic, understanding and nonjudgmental, a therapist could help guide you through your trauma so you can move on with your life.

“That’s probably one of the bigger things that I see, is when people don’t have other people to process the grief with or they feel like they’re becoming a burden,” Coambs says. “That’s when professional help can be a big win.”

This article was written by NerdWallet and was originally published by The Associated Press.

Liz Weston is a certified financial planner and columnist at NerdWallet, a personal finance website, and author of “Your Credit Score.” Email: lweston@nerdwallet.com. Twitter: @lizweston.

Image provided by 123rf.com

Image ID: 49160600

Common Tools Can Save You Time, Money on Taxes

Receipts, like memories, tend to fade with time. That’s just one reason to digitize and track tax-related information. The right apps and habits can save space, time, money and hassle — but only if you use them.

“Apps should make things easier, not more complicated,” says Clare Levison, a certified public accountant in Blacksburg, Virginia. “The definition of a good app is what works for you, not the one that’s the trendiest.”

Use tools you already have

Apps don’t have to be elaborate. The camera on your phone, for example, can capture receipts and other documentation. Levison recommends regularly transferring those images to a designated folder in your photo app to make them easier to find later.

“You don’t want those photos mixed in with all your other selfies and whatever,” Levison says.

Similarly, you can create folders in your email account to collect tax-related documents. If you’re an active investor, for example, you can put your trade confirmations there (or set up a filter so the confirmations are routed there automatically). If you purchase supplies for your business online, a folder can collect emailed receipts.

Another commonplace tool that can be helpful, especially for anyone claiming business expenses or mileage, is a calendar app. These records can help document meetings with clients, business travel and other potentially deductible events.

“The IRS auditor always asks for a copy of my calendar,” says Leonard Wright, a San Diego CPA who’s been audited four times.

Calendar records should be kept for at least seven years, which is how long the IRS typically has to audit you. (There’s no time limit if the agency suspects tax fraud, however, so be sure your choice of electronic calendar lets you retain enough history. )

You also need to regularly download monthly statements from your financial institutions, says Kelley C. Long, a CPA and personal finance specialist in Chicago.

If the IRS suspects you’ve underreported income, it may ask for bank and brokerage statements. If you use a credit card for business or other tax-related purposes, those statements can help support your deductions. While the institutions are required to keep your records for several years, you may have to pay fees to access older statements.

Be sure you’re storing for the long term

Ideally, your computer and phone are already being backed up into the cloud so that you can access your data if the devices are lost, stolen or destroyed. If not, you want to make sure that at least your tax information is regularly transferred to a secure cloud storage system or other safe, off-site location.

The key is to keep information safe and accessible, which means choosing electronic over paper wherever possible. Paper is bulky, inefficient and vulnerable to all kinds of disasters, including fire and flood. Ink can fade, particularly on receipts needed to document expenses (credit card or bank statements typically aren’t considered enough documentation without the accompanying receipts).

“I usually tell business owners, ‘No receipt, then no deduction,’” says Bob Fay, a CPA in Canton, Ohio, who is also a consumer financial education advocate for the American Institute of Certified Public Accountants. “This is a short message that sticks with them as they have so much on their plate every day.”

But the time the IRS gets around to asking for those receipts, all you may have left is flimsy, unreadable paper if you haven’t captured a digital version, Levison says.

Also, paper documents can cost you more.

“People still give their CPAs literally a shoebox,” Long says. “What your CPA does then is pay one of their interns to scan all that stuff into their systems and they charge you for that.”

Consider specialized apps to make it easy

Sometimes, specialized apps can make sense. Scanner apps can help you capture tax-related paperwork, and some have optical character recognition that allows you to turn images into editable — and searchable — files.

If you have an iPhone or iPad and itemize your expenses, ItsDeductible and iDonatedIt can help you track charitable gifts throughout the year and find values for noncash donations, such as clothes and household goods. (These apps don’t have Android versions.)

Apps that create expense reports, such as Expensify or Everlance, can help gig workers and other self-employed people track business-related costs.

Wright, the much-audited CPA, swears by apps that help track mileage, such as MileIQ, TripLog or Everlance.

“Many of these apps are easy to maintain and allow you to track and distinguish between business or personal use,” Wright says. “They’re so simple you can do that while you’re in line at the supermarket.”

But it’s crucial to develop the habit of using the apps and other processes you set up, says CPA Tim Todd of Lynchburg, Virginia. Otherwise, you’re not creating the digital paper trail you’ll need to survive an audit. Plus, you could be costing yourself money.

“Keeping records in real time can also help make sure you don’t forget those items come tax time,” Todd says.

This article was written by NerdWallet and was originally published by the Associated Press.

Liz Weston writes for NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.

Image provided by 123rf.com

Image ID: 38565733

5 Options for People Who Can’t Afford Their Tax Bills

If you know you’re getting a refund come tax time, filing your taxes can almost feel fun. But if you suspect you’re going to owe the IRS money you don’t have, it can be hard to even start the process.

According to a NerdWallet survey, of those who failed to file by last year’s extended July 15, 2020, deadline, 24% knew they owed money but were unable to pay, and 18% didn’t know if they owed, but were afraid to receive a bill they couldn’t pay.

The tax bill you know is better than the tax bill you don’t

Like most problems, stuffing your tax bill in a drawer and forgetting about it won’t make it go away.

If filing your taxes to begin with is burdensome, it may be possible to get help. The federal government has a few programs to offer free tax help to qualified individuals, such as Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Many tax providers also offer a free version of their software for those with simple tax situations, and the IRS itself offers a free file program to those who qualify.

But if you’re pushing off filing because you’re concerned about owing taxes, you should understand your options for tax relief. Here are five ways to get some tax debt help.

1. Pay what you can

No matter what you owe, you should still try to file on time (or file an extension if you can’t make the deadline). Filing an extension will give you more time to file your taxes, not more time to pay your bill, but skipping the extension can lead to harsher penalties.

If you don’t pay your taxes, the IRS charges interest on what you owe. You may not be able to afford your whole tax bill, but if you pay a portion of that bill, you’ll cut down on the amount of interest you’ll have to pay on the rest of your owed taxes.

2. Consider an IRS payment plan

An IRS payment plan, also called an installment agreement, allows you to pay the taxes you owe within an extended time frame.

According to Jordie V. Neth, a certified public accountant and owner of RainCity CPA in Seattle, once you set a monthly payment plan, you can’t renegotiate those payments. “The IRS allows you to pay it off over [up to] 72 months. If you do that option, you can always pay extra, but you can never pay less,” Neth says.

Neth recommends breaking your payments over the longest possible time frame so they are set at the lowest possible amount. “That way, if push comes to shove and you’re in a hardship, you actually have the ability to pay the minimal amount due for any given month,” Neth says.

Keep in mind, a payment plan will incur some interest and penalty charges. You may also have to pay a processing fee for using a debit or credit card and a setup fee, depending on the length of your payment plan and whether or not you apply online.

3. Apply for an offer in compromise

An offer in compromise lets you settle your tax debt. According to Tina Pittman, a CPA and owner of Your Accountant in Chambersburg, Pennsylvania, one of the major benefits of an offer in compromise is that you will end up paying less than what you really owe. Pittman says there are other benefits to an offer in compromise as well, such as avoiding collection calls and letters from the IRS.

Applying for an offer in compromise is a long process that involves a lot of documentation to prove you can’t afford your tax bill, a $205 application fee and an initial payment toward your bill. While your application is being considered, your payments and fees will be applied to your balance, which you will still need to pay off eventually — even if the IRS agrees to reduce it.

Keep in mind, the IRS rejects most applications for offers in compromise. In this case, your initial payment will likely be applied to your balance. Your application fee may be refundable in certain situations.

If you meet the low-income certification requirements, you may not need to pay the application fee or initial payment. You also won’t need to make monthly payments while your offer is being evaluated.

4. Ask for a ‘currently not collectible’ status

Those who can’t pay their tax bill may ask to be put into “currently not collectible” status by the IRS. This means the IRS will temporarily delay collection until your financial situation improves. Keep in mind that this is just a temporary label the IRS puts on your account; the status is not permanent, and you will eventually need to pay your tax debt. (The IRS can also still file a lien against you while you have this status.)

To obtain a currently not collectible status, you’ll need to fill out a form and provide information about your assets, monthly income and expenses.

5. Consult a specialist if you can

Pittman advises people to see a tax professional before taking action with the IRS.

“People are not aware that there are different options with the IRS. They automatically assume all they have is the installment agreement, on which you have to pay the penalties and interest.”

If you can’t afford to work with a tax professional, there are resources for free tax help that may clarify what options would be right for you.

Alana Benson writes for NerdWallet. Email: abenson@nerdwallet.com.

Image provided by 123rf.com

Image ID: 45107458

3 Ways COVID-19 Reshuffled Our Finances

The U.S. economy ground to a halt in March 2020 as state after state issued lockdown orders and shut down businesses to blunt the spread of the coronavirus.

A year later, mask-wearing is commonplace, the phrase “social distancing” is now in the dictionary, elbow bumps have replaced fist bumps and hugs are still on pause.

The tumult of the COVID-19 pandemic impacted our financial lives in ways big and small, too. The big: Many businesses are still temporarily closed, while countless others have closed permanently or are on the brink of doing so, and millions of people are still out of work.

Less acute is the way the coronavirus has influenced how we interact with money, both physically and philosophically. People are being more intentional about how they spend their money, learning what they can do without (sometimes the hard way) and forgoing cash in favor of more contactless payments.

Here are three financial trends we can chalk up to the coronavirus pandemic.

1. Cashless payments

Cash is dirty. Like, covered in bacteria and food and feces dirty. That didn’t bother us much prior to the pandemic. But now, in an effort to minimize contact with germs (namely, the coronavirus) businesses and consumers are ditching cash in favor of credit cards and digital wallets. Payment services quickly pivoted to follow suit. Case in point: Venmo.

Before the pandemic, Venmo was an app you used to split the bill at happy hour or pay your roommate for the electricity bill. Now, you can scan a QR code at CVS to pay for your hand sanitizer using Venmo.

Digital transactions may be more hygienic and convenient, but cashless payment systems typically require a credit card or checking account and, therefore, aren’t easily accessible to the 7.1 million American households who don’t have a bank account.

That’s why major cities like Philadelphia, San Francisco and New York City, along with a handful of states, require retailers to accept cash. And, until the alternative is more accessible, cash will remain king.

2. Shopping small, supporting local

Don’t let the trail of Amazon delivery trucks fool you. The pandemic also prompted people to shop small. In a May 2020 survey commissioned by NerdWallet and conducted by The Harris Poll, 37% of Americans said they made more of an effort to support local businesses as a result of the pandemic.

Shoppers’ desire to support local businesses outweighed their desire to find the cheapest price. In a November 2020 survey by Union Bank, 72% of Americans said supporting small businesses was more important than getting the best deal and 43% said they were willing to spend $20 more on an item to support a small or local business.

While business owners can seek grants and Paycheck Protection Program loans, they will need continued solidarity from shoppers if they are going to rebound from the COVID-19 pandemic.

3. Saving money

Few things amplify the importance of an emergency fund more than an extended, large-scale emergency. The personal savings rate over the past year reflects that trend.

In December 2019, the personal savings rate was 7.2%. In December 2020, it was 13.7%. In the 12 months between, savings rates skyrocketed up to 33.7%, which was an all-time high.

The pandemic didn’t simply illustrate the need to save. By shutting down travel, concerts, restaurants and other fun things we used to spend money on, COVID-19 effectively cut the fun out of budgets.

Almost half (48%) of Americans reported spending less than they did pre-pandemic, according to the May 2020 survey by NerdWallet and The Harris Poll. And 38% said they planned to save more in their emergency fund post-pandemic, too.

But saving money during the pandemic is a luxury mostly afforded to those on solid financial footing before March 2020. Among those with a household income of $100,000 or higher, 47% reported saving more than they did prior to the COVID-19 pandemic, compared with 35% of those earning less than $50,000 per year, according to NerdWallet’s May 2020 survey.

The coronavirus has disproportionately impacted low-income communities and people of color, both physically and financially. And many people struggling to stay afloat before the pandemic find themselves in more dire circumstances now.

Resources like 211.org can help those in need find assistance for bills, housing and other necessities. And nonprofits like Feeding America can help you find food banks in your area.

And if you’re among those with more disposable income since the pandemic started, consider donating to community organizations serving those who need help.

This article was written by NerdWallet and was originally published by The Associated Press.

Kelsey Sheehy writes for NerdWallet. Email: ksheehy@nerdwallet.com.

Image provided by 123rf.com

Image ID: 36333071

This Time, the Stimulus Package Helps More College Students

In the third round of COVID-19 relief, college students and their families could see more money in their pockets than before.

The $1.9 trillion American Rescue Plan Act, signed by President Joe Biden on Thursday, provides students with immediate and long-lasting financial benefits, including:

  • Relief checks, even for dependent students.
  • Emergency financial aid grants from their schools.
  • Child tax credits for students who have children.

Students were largely left out of earlier relief bills. Connel Fullenkamp, an economics professor at Duke University, says that’s because students are overlooked by politicians.

Fullenkamp says he thinks the latest relief package could have a significant and much-needed impact on students. “We are not going to pay their tuition, but we can help defray some of the costs of living,” Fullenkamp adds.

Here are the details on what college students can expect from the relief package.

Parents of dependent students can get a stimulus check

In previous relief legislation, there was an age cutoff. Students 17 or older who were claimed as dependents didn’t qualify for a payment, which left out many high school seniors and college students. This time, they qualify; the money goes to the taxpayer who claims them.

If someone else claims you on their taxes, you are eligible for the same payment the filer gets. All household members included on a qualifying tax return get a check of up to $1,400. If you are a dependent, the person who claimed you will receive payment on your behalf.

The maximum you can receive is $1,400, but the amount will gradually decrease with higher incomes. Those with reported incomes of more than $75,000 for individuals, $112,500 for head of household and $150,000 for joint filers will receive diminished checks. If the person who claimed you makes more than the qualifying maximum, you won’t get a payment at all.

Independent students qualified for earlier relief, and do so again.

If you have a Social Security number, file your taxes independently and have an adjusted gross income of $80,000 or less — which is the qualifying maximum — you are eligible for payment. That adjusted gross income maximum increases depending on your filing status — $120,000 if you file head of household and $160,000 if you file jointly. Income totals are based on your 2019 or 2020 tax refund.

If you file independently, you will receive payment in the same manner you receive your tax refund, via direct deposit or physical check.

Checks are expected to start rolling out this month.

You could qualify for emergency aid from your school

The relief package provides nearly $40 billion in funding to colleges and universities. They’re required to spend half on students in the form of emergency financial aid grants to be distributed through Sept. 30, 2023.

It’s the largest pot of money allotted to students yet. In the original Coronavirus Aid, Relief and Economic Security Act, schools received $14 billion, while the second relief package provided $22.7 billion to colleges. Both packages required colleges to use half on grants for students.

The amount a school receives is based on factors around the numbers of Pell Grant recipients enrolled. Delivery of the emergency aid into students’ hands was largely left up to schools to decide. Some sent money to students automatically based on their eligibility for need-based aid. Other schools required students to apply for it.

What remains unclear is if this time the aid will be accessible to students with Deferred Action for Childhood Arrivals, or DACA, status and international students. Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators says she expects the Department of Education to issue guidance on this in the coming weeks.

Students who have kids might be eligible for more money

As part of the relief bill, parents will receive up to $3,600 a year per child through the child tax credit. Though there is support to make this credit permanent, this new provision is set to last only a year.

“Hopefully it’s going to keep some people afloat in terms of being able to continue their education and not have to stop out,” says Douglas Webber, associate professor of economics at Temple University. “Once you stop out it’s just so hard to come back.”

Lawmakers intend to distribute the sum through monthly checks starting in July. With this arrangement, parents will receive $300 per child for children below age 6 and $250 per month for children between 6 and 17. The remaining credit will pay out after you file taxes.

Unlike with the previous child tax credit, this one is fully refundable. That means even families without a tax obligation will qualify. But payments will phase out for those with a reported income of more than $75,000 for individuals, $112,500 for head of household and $150,000 for joint filers.

Like other measures in the relief bill, payments are based on your most recent tax return — 2019 or 2020.

Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

Image provided by 123rf.com

Image ID: 145940285

How to Craft Smarter Money Goals in 2021

Setting money goals in 2020 was likely an exercise in futility. Maybe you’d been saving for a trip abroad, but the pandemic kept you at home. Or you wanted to save up for a down payment on a house, then the recession left you out of a job.

The pandemic made achieving yearlong goals a challenge for many last year. In fact, 29% of Americans with financial goals for 2020 said COVID-19 forced them to put some of those aspirations on hold until 2021, according to a NerdWallet survey conducted online in late fall by The Harris Poll among over 1,700 U.S. adults with 2020 financial goals.

Although the pandemic is still part of our daily lives, the new year offers an opportunity to craft fresh money goals — and perhaps the trials of last year can help you clarify your financial ambitions.

Know yourself and your priorities

Before you set your goals, think about your current financial situation and your priorities for the new year.

“Take an inventory of where you are and more importantly who you are,” says Jordan Awoye, an equitable advisor based in Long Island, New York.

First, dig into the state of your finances, including your income, monthly expenses and emergency fund. Understand where you are right now to get an idea of where you could be in a year’s time.

Then think about your personal priorities and values — and how they may have shifted as a result of the pandemic — to pinpoint what you want from your finances. Maybe you want to get back to a baseline of where you were in early 2020, before a year of financial challenges. Or maybe you want to use the money you saved while staying at home to put a down payment on a house.

“Start with an understanding of the why behind your goal,” says Kristen Holt, CEO of the nonprofit credit counseling agency GreenPath Financial Wellness. “A great goal is ‘I want to get out of debt,’ but go deeper and ask why. Will you be able to sleep better? Will you be able to enjoy life more? Get clear on your why, because that can be motivation to stick to your goal.”

Craft SMART(R) money goals

With the foundation of your priorities and motivation settled, it’s time to establish the framework to build your financial future. That means crafting your goals in a way that makes them easier to achieve. The SMART template for goal-setting can help:

  • Specific: Make your goals as specific as possible. If you want to curb your spending, for example, pin down how much you spend on unnecessary items each month. Then set an exact dollar limit for such spending.
  • Measurable: Choose a way to track your progress. If you’re paying down debt, think about using a debt tracker. Or if you want to save a certain dollar amount, consider visualizing your goal in a savings progress chart that you’ll color in as you go.
  • Attainable: Your goals need to be something you can accomplish within a year. If you’re paying off $10,000 in credit card debt, for example, find what you can realistically pay monthly, multiply that by 12 and use that amount as your goal.
  • Relevant: Choose goals that are meaningful to your personal values. Similar to finding your “why,” choosing relevant goals helps ensure that your 2021 financial plan is connected to your life goals. If you want to retire early, think about upping contributions to a retirement account so you’re on track to accomplish that multi-year goal.
  • Time-limited: Setting a deadline can keep the pressure on. And think about breaking up your overarching goal into smaller pieces that you’ll achieve on a monthly basis. Hitting monthly goals can provide a steady feed of accomplishments, which can keep you motivated.

Take the SMART acronym a step further by tacking on an “R” for “reward.” Plan rewards for yourself as you make progress. The more enjoyment you get out of the process, the more likely you are to keep working at it.

Say you want to reduce debt. For each $100 you pay off, find a way to treat yourself, maybe by making a nice dinner or having a DIY spa day at home.

Tactics to boost your progress

Finally, here are a few simple tips to build momentum:

  • Automate: Taking a “set it and forget it” approach can make accomplishing your ambitions easier. For savings goals, try direct depositing a portion of your income into a high-yield savings account. And for debt payoff, set up automatic payments for an amount above the minimum due to ensure you’re making progress.
  • Cut your interest rate: If less of your payment goes to interest, more of it goes to debt payoff. You may be able to reduce your rate by refinancing your mortgage, student loan or car loan. If you have credit card debt, see whether you can qualify for a debt consolidation loan or a balance transfer credit card with a 0% APR promotional period.

This article was written by NerdWallet and was originally published by The Associated Press.

Sean Pyles writes for NerdWallet. Email: spyles@nerdwallet.com. Twitter: @SeanPyles.

The article How to Craft Smarter Money Goals in 2021 originally appeared on NerdWallet.

Image provided by 123rf.com

Image ID: 121856523

Put the Cap on Gas Prices: 6 Ways to Save at the Pump

When the price of oil spiked during the February deep freeze, I started using a gas price app and was amazed to find that the cost of fuel in my area varied by 70 cents a gallon. By purchasing the cheapest gas, I could save $8.40 each fillup and as much as $220 a year.

As we come out of the pandemic and pump prices climb, it’s once again time to be smart about your gas purchases. With some simple planning, a household with two cars could easily save the cost of a car payment each year. And businesses with a fleet of vehicles have much more to save.

Combine the following strategies to maximize your savings and perhaps find other rewards, too. (Of course, buying gas at a bargain is only half the opportunity; you can drive in a way that stretches your gas even further.)

1. Use a gas price app

If you do only one thing, this is it. A recent study by GasBuddy concluded that convenience — going to nearby or familiar gas stations — was the biggest money-wasting culprit. Shopping around on a gas app will quickly show you the cheapest gas in your area or along your intended route.

“People think that the difference between $2.00 and $2.21 is not that much,” says Patrick De Haan, head of petroleum analysis for GasBuddy. “But if they are buying 20 gallons every week, the savings adds up fast.” In cities, prices can vary by as much as a dollar a gallon, he says, making the savings even greater.

While GasBuddy is perhaps the best-known gas app, there are others available. And you can filter the results to show the price of different fuel grades and which stations offer diesel.

2. Choose a good rewards program or credit card

Many such programs abound, but drilling down — pun intended — to the savings is difficult. Here’s a quick look at the important factors to consider when choosing the best card for saving money on gas:

  • Annual fee: If a credit card carries an annual fee, it can quickly wipe out your initial savings. However, if the card offers robust savings in other areas too, it might be worth it.
  • Reward caps: Some gas savings are capped either per quarter or per year. Figure out what your spending is and determine whether it fits under the card’s rewards cap.
  • Redemption value: Make sure you understand what each rewards point is worth. Many are a penny, but some are even less. Also, once you accumulate points, what can you redeem them for?
  • Pump or gas station: Some cards offer rewards on anything bought at a filling station, while others specify their gas rewards are for pay-at-the-pump purchases only.
  • Membership requirements: Are there membership costs that ding you or is it a hassle to join?

Remember, if you are using a credit card, pay off the entire balance or the interest will wipe out any gas price savings.

3. Buy from a warehouse club

Filling up at one of the warehouse clubs is a great way to save if you don’t mind the trade-offs, such as membership fees and long lines. The Costco in my area was selling regular gas for 45 cents lower per gallon than my county’s average price as reported by AAA. But keep in mind that you have to offset a $60 yearly membership fee, and long lines means you’re weighing your time versus savings. Still, you could go early in the morning since the pumps open well before the store does.

4. Buy the right fuel for your car

Purchasing a higher grade fuel doesn’t necessarily benefit your car. Look in your owner’s manual or on the gas cap: Is it “recommended” or “required”? For cars that merely recommend it, premium gasoline may slightly improve performance and fuel economy, according to Greg Brannon, AAA’s director of automotive engineering and industry relations.

But if your car doesn’t require premium, don’t bother. When you buy lower grade fuel, “The savings you get is much greater than the cost of the drop-off in fuel economy,” Brannon says.

5. Pay cash

Most gas stations advertise a cash price that is cheaper than the credit card price. This might mean bringing paper money — remember that stuff? — and paying the clerk inside. But at some stations, using a debit instead of a credit card will also get you the cash discount.

If you opt for a debit card, make sure you’re getting the discount before you start pumping since not all stations allow this. And keep in mind that debit card transactions are less secure than using a credit card since thieves could intercept your PIN code and empty your coffers.

6. Fill up before a spike

Natural disasters and severe weather can eventually bring higher gas prices to your area. For example, the deep freeze in Texas forced the shutdown of Gulf Coast and some Midwest refineries and drove up gas prices by 13 cents in one week. You can easily check prices in your area on AAA, which also predicts oil price increases.

Philip Reed writes for NerdWallet. Email: Preed@nerdwallet.com.

Image provided by 123rf.com

Image ID: 51892714

3 Ways to Get Socially Distanced Tax Prep This Year

Before COVID-19, doing your taxes often meant carrying a box of paperwork to someone’s office for a long, in-person visit. For many people, that’s no longer a viable option in this era of social distancing. But there are still ways to get your taxes done safely — if you know what to look for.

1. Ask if the preparer has a secure portal

A secure portal is a dedicated channel through which you and your tax preparer can upload PDFs or pictures of receipts, W-2s and other tax documents, or even review and sign your completed tax return. “People can review the work that we’ve done and then sign their tax return … they never have to step foot into the office,” says Stephanie Gandsey, marketing director at DHJJ Financial Advisors in Naperville, Illinois. TurboTax and H&R Block offer similar options.

Ask about the type of portal your tax preparer is using. Google Drive and Dropbox are not secure options for sending documents that contain your Social Security number and other personal information, Gandsey says.

Know how long your information stays in the portal, too. Michael Cody, a certified public accountant at Lieb, Cody & Co. in Torrance, California, says he usually has only seven days to download documents that clients send through his company’s portal — after that, the link disappears. Clients have around 30 days to download documents he sends to them, and the portal tracks activity. “Anytime someone downloads that document I sent them, I get an email back to me saying so-and-so downloaded it,” he says.

2. Look for drop-off services

If you don’t want to deal with digitizing documents, many tax preparers provide drop-off locations. Cody’s firm, for example, has a secured lobby with a mail slot into which clients can put documents. “They just come in, we point them to the box, and they throw [them] right in,” he says.

Some Volunteer Income Tax Assistance, or VITA, and Tax Counseling for the Elderly, or TCE, clinics also provide drop-off services. These clinics offer free tax preparation for people with low incomes, disabilities, language barriers or who are 60 or older. You might find one in your area at irs.treasury.gov/freetaxprep/ or by searching online for “VITA drop off” plus your city.

3. Schedule a virtual visit

Many tax preparers are holding face-to-face meetings with clients on video-conference platforms to go over tax returns, answer questions and address issues and opportunities. TurboTax, H&R Block and TaxAct also offer packages and upgrades that provide virtual meetings with tax pros if you’re using software to do your own taxes.

“We used to say face time,” Gandsey says. “Everyone wants to get in front, sit right across the desk. And what we’ve really switched to now is attention — giving the client attention. And attention doesn’t have to be in person.”

In some ways, virtual meetings can be a better experience, she adds. Tax preparers can show clients exactly what documents they’re looking at on the screen and even highlight portions to look at. “I think it’s actually made it easier for a lot of people,” she says.

Scheduling is often more flexible, with less wait time before meetings, Cody says. “I can actually get in front of clients quicker now. I want to know what keeps you up at night. Maybe I can help you out. The sooner I can put that to bed, the better.”

Tina Orem writes for NerdWallet. Email: torem@nerdwallet.com.

The article 3 Ways to Get Socially Distanced Tax Prep This Year originally appeared on NerdWallet.

Image provided by 123rf.com

Image ID: 53076723

5 Things to Consider When Picking a College in the COVID-19 Era

Colleges have faced innumerable challenges during the COVID-19 pandemic. And the way they’ve responded to those issues should influence how prospective students evaluate them.

Online learning, strict campus rules and lingering economic concerns have left many students wondering if their college investment will be worthwhile. As a result, fall 2020 enrollment declined by 2.5% — or by more than 400,000 students — according to the National Student Clearinghouse Research Center.

Hafeez Lakhani, founder of college admissions counseling firm Lakhani Coaching, acknowledges the changing college landscape but still advises students to prioritize college. “Education is about playing the long game,” he says, pointing to data showing college graduates earn nearly twice as much over their lifetimes compared with high school graduates.

As you finalize your college selection, consider these questions to gauge which school is best for you in the era of COVID-19.

1. Can you visit campus?

Don’t count out a school just because you can’t physically visit campus.

“Sure, you don’t get to step foot on campus, but you have more opportunities to connect with the school than you had before,” says Sydney Matthes, counselor at college admissions consulting firm Collegewise. She says students can participate in virtual campus tours and virtual class audits.

For example, Hampton University’s campus in Virginia remains closed through at least this spring but is conducting tours and information sessions virtually. Admissions officials say the virtual tours allow prospective students to get a sense of the campus in anticipation of its reopening.

If a school isn’t offering virtual tours, Matthes advises students to contact the admissions office directly and ask to meet via video chat with a professor or current student. “It’s easier to sign up for a virtual tour, but shows interest to write an email,” she says. “Creating relationships is important.”

2. What are the COVID-19 rules?

Having a sense of how a college handled the pandemic’s initial outbreak, the rules it set and its response to students breaking campus COVID-19 rules will give you an idea of what school life will look like.

Brett Joshpe, a lawyer who represented students dismissed from Northeastern University over COVID-19 rule violations, says he got calls from parents all over the country who were concerned about the pandemic rules and their enforcement.

“A lot of parents and [students] in general are rethinking what they’re paying for and where they are going [to college],” Joshpe says.

Make sure you can commit to rules set by a college before deciding to attend.

3. What is your — and the college’s — financial situation?

Many colleges and students are seeing their finances change as the pandemic drags on.

For colleges, Lakhani attributes some of the financial decline to decreased international student enrollment. He says there have been fewer international students coming to the United States over the last several years, and the pandemic only exacerbated the situation.

“International students typically pay full tuition,” Lakhani says. “When you take the flow of international students out, universities have to make up that tuition elsewhere.”

He fears that the cost difference could be passed down to other students, that programs or amenities could be affected and that smaller private schools may have to close.

For students, the pandemic-induced economic downturn means you may have less money available to cover college expenses. According to a June 2020 survey by college study guide website OneClass, about 50% of the 9,000 students surveyed say the coronavirus pandemic has decreased their ability to pay tuition.

But even with a shifting financial landscape, you can still attend college:

  • Select a college you can afford that has a strong financial standing.
  • Take advantage of scholarships, grants and other free money through the FAFSA before borrowing.
  • If your financial situation has changed from what’s represented on your FAFSA, contact prospective schools and request a professional judgment to amend your aid offer.

4. What are the online options?

There is no guarantee that colleges will be back in person by fall 2021. And if they start off in person, they could have to quickly pivot back online.

So even though you may be considering a school based on its in-person classes, campus and activities, also evaluate its online structure. To do this, ask to test drive the school’s online learning platform and attend a virtual lecture. You can also get the perspective of a student who started off in person, but had to switch to online.

And ask if your school keeps records of how many professors are trained or certified in online learning. The ability to teach great classes in person doesn’t always mean the ability to teach great classes online.

5. What support services does the college offer?

The COVID-19 pandemic has led to an increase in mental health issues for college-aged students. According to a June 2020 survey by the research institute Center for Promise, one-third of the 3,300 teenagers surveyed say they have been feeling more depressed or unhappy during the pandemic.

A September 2020 study by the Journal of Medical Internet Research shows 71% of 195 college students surveyed expressed feelings of depression and anxiety. The study concluded there is an “urgent need to develop interventions and preventive strategies to address the mental health of college students.”

Some colleges are responding to this need. Appalachian State University in North Carolina, for example, began offering virtual one-on-one and group counseling for remote and on-campus students. It also hosts a student-led mental health ambassador group that offers peer mentorship.

If you have been struggling emotionally during the pandemic, prioritize a college that has strong support services. Matthes says she advised students to consider support services before the pandemic and that they are even more important now. “The uncertainty can be a little scary, but this, hopefully, isn’t forever,” she says.

Cecilia Clark writes for NerdWallet. Email: cclark@nerdwallet.com.

Image provided by 123rf.com

Image ID: 120571196