Categoria: personal finance

Two banks have collapsed since Friday, the federal government swooped in to save the day, and there’s still a lot of uncertainty about what comes next.

Depositors at Silicon Valley Bank — which failed Friday after a bank run — and New York-based Signature Bank — which collapsed Sunday — will see their money guaranteed by the federal government. In a joint statement Sunday, the U.S. Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. said all deposits at both banks would be guaranteed — but not at the expense of taxpayers. Depositors were told they would have access to their money Monday.

» Ask a Nerd: How Does SVB’s Closure Affect Me?

The move was an attempt to alleviate systemic risk to the banking system and shore up public confidence, according to the statement. In other words, the federal government hoped to ward off the potential for a contagion of collapses that could destabilize the banking system and cause an economic crisis akin to the Great Recession, in late 2007 to mid-2009.

Since 2001, there have been 563 bank failures, according to the FDIC, but these are the first since Kansas-based Almena State Bank in October 2020. SVB and Signature Bank’s collapses were the second and third largest in history, with Washington Mutual — which fell during the 2008 financial crisis — still No. 1.

The markets responded to SVB’s collapse with a swift decline Friday. On Monday morning, after the Fed’s joint announcement, markets were jittery, indicating high volatility in an uncertain financial climate. Bank stocks, especially regional bank stocks, have plunged.

How SVB and Signature Bank collapsed In the joint news release, the Fed said: “The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry.”

But not all reforms have stuck. In 2018, under then-President Donald Trump, Congress rolled back Dodd-Frank Act regulations for regional banks with under $250 billion in assets. At the time of its failure, SVB had $209 billion, according to the FDIC. Senate Banking Committee Chair Elizabeth Warren, D-Mass., cited the rollbacks as a contributor to SVB’s collapse, saying the decision reduced “both oversight and capital requirements.”

So how did it happen? The simplest answer is a bank run, which happens when depositors withdraw their money simultaneously out of fear of insolvency. On Wednesday, CEO Greg Becker sent a letter to shareholders telling them that SVB had lost $1.8 billion on the sale of U.S. Treasurys and mortgage-backed securities. Becker indicated the bank planned to raise $2.25 billion to bolster its finances. This announcement sparked a panic among its customers, who collectively withdrew $42 billion from their accounts Thursday. By Friday morning, SVB had a negative cash balance of $958 million. The FDIC said it had taken over SVB and established the new Deposit Insurance National Bank of Santa Clara. (Disclosure: NerdWallet also banked with SVB before its closure.)

Then on Sunday, New York state regulators closed Signature Bank, a lender primarily serving real estate and law firms that recently started focusing on the cryptocurrency industry. A similar bank run happened at Signature. The FDIC took over the same day and established a new Signature Bridge Bank N.A.

Without government intervention, the collapse of SVB could have been catastrophic for depositors with large accounts. Deposits are FDIC-insured only up to $250,000 regardless of whether the account was individual or corporate. More than 90% of SVB’s deposits were not insured by the FDIC, according to a Bloomberg analysis of recent regulatory filings. SVB was known as the bank of choice for startups, venture capitalists and tech companies. Its collapse Friday raised questions for some companies about whether they would be able to meet payroll.

Was this a bailout? Calling this a bailout or not is semantics. Either way, the federal government wants to make sure you know that the burden is not falling on taxpayers. In the joint announcement, the trio of government agencies indicated the Deposit Insurance Fund would cover the money in depositor’s accounts. The Deposit Insurance Fund is funded through fees assessed on financial institutions as well as interest on government bonds.

President Joe Biden, in a televised address Monday morning, repeated this sentiment: “No losses will be — and I want — this is an important point — no losses will be borne by the taxpayers. Let me repeat that: No losses will be borne by the taxpayers.”

The Federal Reserve Board also announced it will make additional sources of liquidity through the creation of a fund that would safeguard deposits. The new Bank Term Funding Program will offer loans of up to one year to banks, savings, associations, credit unions and other eligible depository institutions that pledge U.S. Treasuries, agency debt and mortgage-backed securities as collateral. The program will have an initial $25 billion available made possible by the Exchange Stabilization Fund.

Will the Fed still raise interest rates? The bank failures may soften the Fed’s stance on interest rates. The hawkish tenor of Fed Chair Jerome Powell, in his Senate testimony last week and with the February rate hike, indicated a 50-basis-point increase was likely for the March rate decision.

But the SVB and Signature failures have clouded that outlook.

In a widely reported analysis of the failures, Goldman Sachs said it no longer expects the Fed to deliver any rate hike at the March 22 meeting, adding they had “considerable uncertainty about the path beyond March.” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., was widely reported saying he expects a 25-basis-point hike at next week’s meeting.

As of Monday, the CME FedWatch Tool indicated the probability of an increase next week is between no hike and a 25-basis-point hike.

What happens next? On Monday, Biden’s message aimed to assure Americans of the safety and strength of the U.S. banking system. He indicated management of these failed banks would be fired and investors in those banks would not be protected, and he called for a full account of how these failures happened. Finally, he called on Congress and banking regulators to strengthen the rules for banks to lessen the chances of additional failures.

The FDIC will facilitate buyers for SVB and Signature Bank. It will also sell off SVB’s assets to be used for future disposition.

By Sabrina Parys

Crowdfunding organizations, such as GoFundMe, have made it easier than ever to raise and collect funds for personal causes.

If you found yourself at the helm of a campaign last year, or if you set up a fundraiser for another person, chances are that meeting your donation goal was top of mind. But there are also some important tax considerations to be aware of as you prepare to file.

The nature of your campaign and how you go about collecting funds play a big role in whether the IRS will deem the money you raised to be taxable. So, if you want to avoid a headache at tax time, knowing the rules helps.

Is crowdfunded money taxed? Donations can be considered nontaxable gifts for tax purposes, according to the IRS. However, you may have to pay taxes on money raised in a crowdfunding campaign for a few reasons:

If donors receive something of value in return for their contribution, the IRS could consider the donation a sale, which would mean any profits could be taxed as personal income. If an employer donates to a crowdfunding campaign set up to benefit someone who works for them, the contributions probably will not be considered a gift and should be added to the recipient’s gross income. The same rules are in effect for funds you set up on behalf of another person, as long as the money was given to them as promised.

If you’re raising money for a business venture, things can quickly get more complicated, so it might be a good idea to work with a tax professional if you have any doubts about the taxability of your fundraiser.

Is GoFundMe tax-deductible? On the other side of the aisle, people who donate to crowdfunding campaigns may be wondering if their generosity could score them a tax deduction. The answer? Typically not.

That’s because the IRS has strict rules about what kind of donations merit a tax deduction.

To snag a tax break for giving, the agency requires that your donation be delivered to a qualified 501(c)3 tax-exempt organization. If you have questions about the tax deductibility of a donation, the IRS also has a handy tool that can help you quickly search for and locate eligible organizations.

Some crowdfunding websites also make it easier to distinguish between a personal campaign and fundraisers run by 501(c)3 organizations. GoFundMe, for example, has a separate landing page for campaigns run by charitable organizations, and Kickstarter encourages donors to reach out to project creators directly to confirm whether a donation is tax-deductible.

Do I need to pay gift taxes on the money I donate? If you donated over $16,000 in 2022 (or $17,000 in 2023) to a crowdfunding campaign not run by a qualifying charity, be aware that you may be on the hook for filing a federal gift tax return. This doesn’t mean you’ll owe the federal gift tax — few people actually end up paying gift taxes — but you may need to report your generosity to the IRS come tax time.

What crowdfunding tax documents do I need? If your crowdfunding campaign raised more than $600, and if contributors received anything in return for their donation, the fundraising platform will probably send you a tax statement called a 1099-K form that outlines exactly how much money you netted. Remember that you’re not the only recipient of this form — the IRS gets a copy, too — so that should be enough to wash away any thoughts of not reporting the income when you file your taxes.

As with all things tax, it’s essential to keep good records and receipts. Documentation can provide proof to the IRS about the taxability of your campaign and money earned through it.

The agency urges anyone who sets up or runs a fundraising campaign via crowdfunding to keep a paper trail of the campaign and how the funds were dispersed for at least three years. And if you have questions about a campaign’s tax implications, it’s never a bad idea to call in a tax professional for a second opinion.

Most personal finance advice boils down to this: Save as much as you can, and spend as little as you can.

That’s the simplest way to accumulate wealth, build investment income and achieve financial independence (even if it’s not so simple in practice).

Yet when it comes to travel rewards — those points and miles earned through airline, hotel and credit card programs — this conventional wisdom is turned on its head. Saving a million miles might sound impressive, but it’s generally a poor financial decision.

“I hear all the time from business travelers who ‘saved their miles for retirement,’ and are devastated to learn that the purchasing power of their miles isn’t what it would have been five, ten, fifteen years ago,” Tiffany Funk, co-founder and president of travel rewards booking search tool Point.me, said in an email.

“Programs have successfully made loyalty currencies feel so valuable that people are often reluctant to use them because they are afraid they are giving up too much value.”

Several factors explain why hoarding travel rewards isn’t a great idea:

Points devalue over time. Although 2022 was a rare exception where many points became more valuable because of the relative cost of cash fares, rewards generally lose their value over time. They’re un-investable. Unlike dollars, which can be invested to reap the benefit of compound interest over time, travel rewards just sit there. Some points expire and programs can always go belly-up. There’s nothing guaranteeing the value of points and miles except the companies offering them. Yet, despite these facts, the saving habit can be hard to undo. Especially for those with a psychological bias toward “maximization.”

Can’t get no satisfaction Analysis paralysis can pose one of the biggest challenges to inveterate points and miles hoarders. Making the decision to spend that pile of rewards accumulated during the pandemic is one thing. Actually spending them is another.

“Airline revenue systems are intentionally opaque,” Funk said. “So even if your credit card offers the ability to transfer points to partners, your bank literally doesn’t have the mechanisms to guide you through which partner makes sense for a given trip, what the expected pricing should be or even how to book flights with that program.”

This opacity freezes many would-be spenders in their tracks, making them second-guess whether a given redemption offers the best value.

This bias toward getting the most value, while positive on its surface, can lead to a spiral of comparison shopping and waiting for the perfect redemption.

“I just give the advice not to overthink it,” says Adam Nubern, a certified public accountant who specializes in serving digital nomads.

“Don’t get caught up in the maximizing the redemption value rat race. Then you have to keep up with the program changes and all that. How many hours do you spend researching that? Do you want a part-time job as a points maximizer?”

Not only does this “maximizer” mentality lead to more hoarding, it can also make you unhappier.

A 2018 study by the Department of Psychology of Chengdu University in China found that maximizers tend to score lower on scores of overall well-being than those who accepted “good enough” options.

In other words, those who obsessed over the best purchase were less happy with the outcome than those who took a more relaxed approach, so-called satisficers.

The term “satisficing,” a combination of “satisfy” and “suffice,” is a decision-making process that involves collecting enough information to make an acceptable choice. It’s a great way to overcome travel reward overaccumulation.

Take charge of your points Travel rewards bloggers have long hyped those redemptions that offer the absolute best value.

Taking a first-class flight to Asia, for example, might offer 5 cents per mile in value, while an economy flight within the U.S. could yield only 1 or 2 cents per mile. This creates an incentive to use miles for the most lavish, luxurious options.

But think about it this way: Those high-end redemptions only offer more value because the cash equivalent is so high.

A round-trip flight to Asia can easily cost $10,000 when paying cash, which makes points and miles redemptions seem like a great value — but only by comparison.

Instead, travelers sitting on a cache of points should keep it simple.

Taking a flight to visit family? Use airline miles. Looking for a hotel during a road trip? Use credit card or hotel points. These redemptions might not get many likes on Instagram, but they’ll burn through those quickly depreciating rewards.

Just make sure the redemption you choose doesn’t offer value too far below baseline. Use an online calculator to compare the value of using rewards or paying cash.

But, when in doubt: Use those points.

“I think, ‘Well, dang, I don’t have to use actual money, so let’s go,” Nubern says. “I try not to get caught up in that decision fatigue. In my mind, I’m not using a dollar, so any kind of redemption is great, and I just go for it.”

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

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Sam Kemmis writes for NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

A tax credit is among the most satisfying benefits you can turn up when preparing your return.

Unlike a deduction, which decreases the income on which you’ll be taxed, a tax credit reduces your overall tax due. The result can mean hundreds of dollars knocked off your bill — or added to your refund.

“With a credit, you get a 100% benefit,” says Andrew King, vice president of tax policy and research at Goldman Sachs Ayco Personal Financial Management in Cohoes, New York. “It’s a full recoupment of taxes you’d otherwise have to pay.”

Some tax credits apply to a huge swath of the population, while others are specialized to incentivize specific economic activity. Before you file your return, here are some tax credits you may want to review.

1. Earned Income Tax Credit The earned income tax credit, or EITC, is one of the most common income tax breaks, designed to help lighten the burden for middle- and lower-income families.

For the 2021 tax year, 4 out of 5 filers claimed this tax credit, with an average benefit upward of $2,000. The total value those credits was approximately $64 billion, the IRS said.

Even better, the EITC is what is known as a “refundable” tax credit. That means if the credit amount is higher than your tax owed, the government will pay you the difference.

Do You Qualify? 

As its name suggests, eligibility for the EITC mostly depends on your income, and you have to have worked to receive the credit. For the 2022 tax year, the income limits range from $16,480 to $59,187, depending on your filing status.

There are a few other requirements, including:

You can’t have more than $10,300 in investment income. Everyone on your tax return has to have a valid Social Security number. 2. Child Tax Credit If you’ve used the child tax credit, or CTC, in the past, it’s important to remember that this benefit for families with children has undergone some significant changes.

During the pandemic, the government temporarily increased the credit amount, providing thousands of dollars worth of additional relief to some families. But in 2022, the credit reverted to its previous levels. Taxpayers who saw a big refund last year thanks to the credit may be disappointed when they file this time around.

Still, the CTC can wipe out a considerable chunk of your tax bill. The benefit can reach $2,000 per qualifying child, and up to $1,500 of that is refundable. People with dependents who don’t qualify for the full credit can be eligible for a credit up to $500.

Do You Qualify? 

Families with children under 17 are generally eligible for the child tax credit as long as their kids have valid Social Security numbers. However, the amount you can claim depends on your income.

The credit begins to phase out once your adjusted gross income exceeds $200,000, or $400,000 for those married filing jointly. At a certain income level, the benefit lapses entirely.

3. American Opportunity Credit and Lifetime Learning Credit The American opportunity credit and lifetime learning credit are two education-focused tax breaks that help people with expenses such as tuition. Both credits have a similar setup, but they are tailored toward different types of costs.

The American opportunity credit is targeted toward students pursuing formal degree programs. The lifetime learning credit, on the other hand, can be used for other types of training and education.

The partially refundable American opportunity credit is also more generous: Taxpayers can claim up to $2,500 per eligible student, including for expenses beyond tuition, such as course materials. With the nonrefundable lifetime learning credit, you can claim a total of $2,000 per tax return for tuition only, regardless of how many students would be eligible.  You can’t claim both credits for one student.

Do You Qualify? 

The eligibility criteria for these two education credits vary. For instance, the American opportunity credit can only be used for four years of post-secondary education, and eligible students have to be enrolled at least half time.The lifetime learning credit is broader, and can apply to graduate courses or vocational classes.

The credits do have basic eligibility requirements in common. Both share an income limit of $90,000 for single filers and $180,000 for married people filing jointly.

This article was provided to The Associated Press by the personal finance website NerdWallet. Andy Rosen is a writer at NerdWallet. Email: arosen@nerdwallet.com.

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When you’re caring for a newborn, it can be hard enough to carve out time to shower, let alone stay on top of money tasks. In the fog of sleep deprivation, you may miss a bill payment or impulse-buy random things online to help with infant care. Suddenly, your credit scores are down and your budget is stretched.

Planning for the baby itself — the name ideas, the nursery themes — is certainly more adorable than developing a system to make sure you remember to open the mail, but the last thing you’ll want to do is leave money management up to chance when your baby arrives. Here are ways to start financially nesting.

Knock out important tasks Take advantage of the pre-baby months to make some big decisions, including:

Health insurance for the baby: Giving birth or adopting a child is considered a “qualifying life event” as far as health insurance coverage goes. That means you won’t have to wait for open enrollment to add your child to your plan, but you’ll have only a limited amount of time — about one or two months — after the birth or adoption to do so. Check your insurance plan’s rules to know what your deadline would be. If you and your partner have separate plans, compare costs and decide who will take the baby on as a dependent. Estate planning: Talk to an estate attorney about drafting a will, selecting a power of attorney and health care proxy, and establishing a trust for your child if appropriate for your situation. “If something were to happen to one of you or both of you at the same time, it would just create a myriad of problems for your child,” says Paul Sydlansky, founder and senior adviser at Lake Road Advisors in Corning, New York. Life insurance: A life insurance policy can provide vital funding for your family if something were to happen to you, your partner or both of you. Get your budget baby-ready From smaller ongoing purchases like diapers and formula to massive costs like child care, those baby expenses are going to add up. If you’re taking unpaid parental leave or one parent is leaving their job to handle caretaking full time, the money coming in is going to change dramatically.

Start by identifying cuts you can make or bills you can renegotiate to bring down costs. If you have credit card debt and there’s room in your budget to pay it down aggressively, that can free up more money for necessities later. Begin to price out expected ongoing baby expenses, like the monthly cost of day care, so you can get a general sense of how your spending will change.

Next, automate bill payments for recurring costs, like credit cards, utilities and mortgage payments. If you rent your home and normally mail a check to your landlord, use your bank’s bill-pay feature so it’ll send checks on your behalf. Set up whatever you can in advance so these services will continue without interruption and late fees.

Expect the unexpected Don’t neglect to make room in your budget for unexpected costs.

Emily Rassam, a senior financial planner at Archer Investment Management in Charlotte, North Carolina, found herself spending more on self-care than she planned. “My interest level in grocery shopping and cooking plummeted during pregnancy,” she says. That meant more of her food budget went toward restaurants and takeout.

Rassam also recommends confirming child-birth expenses with your insurance company in advance. She learned, for example, that the hospital she planned to deliver at was in her insurance network but the anesthesiologist wasn’t. In that situation, getting an epidural would cost more than anticipated.

Tap into your village Your loved ones aren’t just great sources of hand-me-downs, advice and free babysitting. They can also help with financial tasks, whether that’s checking in with you about your money goals or even reminding you of payment due dates.

Lori Gross, a financial and investment adviser at Outlook Financial Center in Troy, Ohio, says neighbors have the same deadlines for costs like property taxes and utilities, so ask them to text a reminder when they pay their bill so you don’t forget.

“Family and friends are very good about helping out with those things, but a lot of parents hesitate to ask for help,” Gross says. “They don’t think they’re going to need it.”

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

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In most cases, when we have children, we do not plan on raising them as single parents. But sometimes dreams and plans for a family change or get derailed as we navigate life, and wind up raising children on our own.

For years, the U.S. Department of Agriculture published an annual report that calculated the cost of raising a child to adulthood, not including college expenses. When the last report was published in 2017, the cost of raising a child born in 2015 was $233,610. According to the U.S. Bureau of Labor Statistics CPI Inflation Calculator, $233,610 in January 2015 has the same buying power as $299,045 in January 2023.

That means we can expect the cost of raising one child to adulthood to be roughly $300,000, not including the additional cost of college. This is a staggering number, especially if you’re responsible for it all on your own.

Understanding and managing your finances while setting realistic goals can help reduce financial anxiety. How can you manage your finances as a single parent so that you do not feel overwhelmed or helpless?

Budget First, you need to take control of your finances by analyzing and tracking your monthly cash flow.

Budgeting will help you prioritize your spending, earmark money to save for the future, and plan for your short- and long-term goals.

Are you living within your means or spending more each month than your income allows? The goal of a budget is to ensure you are meeting your basic needs — and some wants — without spending more money than you receive as income.

Manage credit and debt Credit is borrowing money to buy goods and services with the promise that you’ll pay the money back by a specific date.

Credit cards are easy to access and, if responsibly managed, will help to establish you as a good borrower. When you apply for a credit card, it is especially important to understand the terms. Often, the fees and interest rates are not obvious when you are signing the application. The annual interest rate on your credit card — that is, the percentage of interest you will pay on credit card debt — will be nowhere near the interest rate your bank is paying on your savings account but closer to a range of 17% to 29%.

If your credit history is poor, perhaps because you are not making your loan payments on time or at all, it can take up to seven years for the data to be removed from your credit report. Some negative credit issues, such as bankruptcy, can last ten years on your credit report.

The unexpected As we have recently experienced throughout the pandemic, life can change unexpectedly and fast. Are you prepared for a job loss, illness, disability, natural disaster, or lawsuit?

Insurance and savings can help to protect you against unforeseen events. Confirm with your insurance agent that your policies are providing the coverage you need and keep an emergency reserve fund of three to six months of cash to help make sure unexpected expenses do not financially derail you from your budget.

Leasing a vehicle instead of buying Before you lease a car for your child, understand the long-term ramifications of this decision.

When you lease a car, you will usually have lower monthly payments than if you finance a car with a loan. And you can transition to a new car every two to three years by simply returning the car to the dealer at the end of your contract.

Unfortunately, you will need to refinance the debt or pay off the outstanding balance if you want to keep the car when the contract has reached full term. Additionally, you will be penalized if you terminate your lease early, exceed the allowed annual mileage (usually 9,000 to 12,000 miles per year), or damage the vehicle through excessive wear and tear.

Save for retirement When we are raising children, retiring can seem so far away that ignoring it is easy. Unfortunately, delaying saving for retirement often means that you will be working well into your later years. Even if you cannot afford to save much, allocate some funds each month to contribute to your retirement savings.

If your employer has a company retirement plan, understand the benefits of the plan. Will your employer match a percentage of what you save? If so, take full advantage of the company match; this opportunity provides tax-deferred funds at no cost to you.

Remember that even though retiring may seem like it is a lifetime away, you will eventually reach an age when you no longer want to work. In retirement, you will need assets and income sources to maintain your current standard of living.

Review tax return Filing a tax return and paying taxes is not anyone’s favorite task. Gathering data to submit to the tax preparer is a chore, and waiting for the results can be laden with anxiety. When your tax preparer calls and provides your update, good or bad, make sure you spend a few minutes reviewing the data.

What is your household income? Does the information on the tax returns look accurate? If reading your tax returns is completely foreign to you, ask the tax preparer to explain the information you are reviewing. You may not prepare your state and federal tax returns on your own, but you will sign the documents and are accountable for accurately reporting the information to the tax reporting agencies.

Learn to negotiate Strong negotiating skills are beneficial when seeking a raise or a promotion and when buying a home or a new vehicle. Spend some time learning and practicing the key steps to fine-tune this art. Successful negotiators learn to control the process, coming away with an outcome that feels equitable and favorable to their objective.

Being engaged and vocal about your finances will not only increase your confidence, but it will also empower you to maintain control of your financial life over the long term. Living within your budget while raising a child may not be an easy journey. And temptations to spend money will present themselves every day. Fortunately, setting an example as a fiscally responsible parent will be a skill set your child learns by observation.

Place your needs before your wants and learn that it is OK to say no when you cannot afford a purchase. As a parent, showing your child that you manage your finances is one of the best gifts you will ever give them—the gift of a lifetime.

Teri Parker is a vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Reach her via email at Teri.parker@captrustadvisors.com.

Last year, one of my family’s credit cards was used to rack up hundreds of dollars in bogus charges at Apple.com. Another card was compromised four times in a row, as thieves repeatedly charged merchandise and Uber rides.

We ultimately got our money back, but repeated credit card fraud can be frustrating and disheartening. Dealing with the aftermath taught me to prize security over convenience, and to change some bad habits that made me an easier target.

The clock is ticking on credit card fraud Under the Fair Credit Billing Act, consumers have 60 days after bogus charges show up on a statement to report them to the credit card issuer to avoid most liability, says attorney Amy Loftsgordon, legal editor at Nolo, a self-help legal site. (The law limits a consumer’s liability to $50 per series of unauthorized uses, but most issuers waive that, Loftsgordon says.)

So my heart sank when I realized that the fraud on our Apple.com account had started at least six months earlier.

I’d noticed that the Apple.com charges had been ticking up, but assumed my husband was buying more audiobooks and my daughter was downloading more games. I’d grouse at them occasionally, they would proclaim innocence and the charges would continue.

Finally, the thief went too far and charged over $300 in a single month. I contacted Apple and discovered our card had been used to purchase dating apps and virtual phone numbers, which were likely being used to scam other people. The electronic receipts for these purchases were sent to an email address I didn’t recognize.

A new card didn’t stop the fraud The kicker: The thief was using a credit card number that had already been reported as compromised. Normally, credit card issuers will deny new charges on a compromised number. But according to the card issuer, the thief started their crime spree during the few days that my replacement card was in the mail. Since we already made regular purchases at Apple.com, the card issuer assumed the charges using the old card were legit and allowed them to go through “as a courtesy” — month after month. (I was assured that this sequence of events “is extremely rare and hardly ever happens.”)

An Apple customer service representative deleted the most recent month’s charges and the issuer removed the rest — even those well past the 60-day mark.

My takeaways: Sites where you make multiple purchases each month need to be monitored carefully for bogus transactions. Compare what your credit card statement says you’ve charged with your purchase history on the site. You may have to search online for how to find that history; Apple certainly doesn’t make it easy or intuitive to find your charges. And if you find fraud, report it — even if it’s beyond the 60-day deadline.

Make fraudsters work harder It’s still not clear why my other card was repeatedly compromised. I’d no sooner get a replacement card than I would receive a text from the issuer asking about another suspicious transaction.

I removed the card from the browsers and websites where it had been stored. We may like the convenience of not having to type in our credit card numbers, but every place we store our cards is another place where they can be stolen, says security expert Avivah Litan, a distinguished vice president analyst with research firm Gartner Inc.

The mobile app for this card allowed me to see many of the places where my card was saved. But the list wasn’t complete. After the fourth hack, a phone rep said my card was stored at Airbnb, Walmart.com and Uber — three places that didn’t show up in my app and that I hadn’t authorized. The rep disconnected the card from those accounts. In the future, I’ll call in to report fraud so I can ask for this review rather than merely responding to a text warning or going online. I also learned that I could “lock” my card in the mobile app to prevent unauthorized use. Unlocking it when I want to make a charge just takes a few seconds. I wish more issuers offered this feature.

At the issuer’s suggestion, I ran antivirus and anti-malware software (my devices were clean) and changed the passwords on my email accounts as well as my financial accounts, in case a thief had broken into those. I already had two-factor authentication, which requires a code and a password to sign in, on my financial and email accounts. I added it to my most-used retail sites as well.

I’ve also started using a mobile payment system wherever possible. These systems — which include Apple Pay, Google Pay and Samsung Pay — create a “token” that’s transmitted to merchants so that your credit card number is never exposed or stored. Similarly, some credit card issuers will provide virtual numbers that you can use instead of your real account number when making purchases online.

I don’t imagine all this will make me fraud-proof, because that’s impossible. I’m just trying to make the thieves work a little harder next time.

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

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The article Make Your Credit Cards Less Vulnerable to Fraud originally appeared on NerdWallet.

At a staggering $1.76 trillion, student debt is among the largest debts in the U.S. — second only to mortgages — affecting over 43 million Americans, according to federal data. And it’s taking a toll on borrowers’ mental and physical well-being.

The American Journal of Preventive Medicine links higher student debt to a greater risk of cardiovascular disease and related conditions. The authors of its 2022 report concluded that as student debt piles up, the health risk to borrowers could undermine the health benefits of postsecondary education.

In addition to long-term effects on physical health, the debt burden also puts a strain on borrowers’ mental health.

Among borrowers on track to receive Public Service Loan Forgiveness with 37-48 student loan payments remaining, 18% reported suicidal thoughts, per a 2022 study by the Student Borrower Protection Center. According to the study, this is at least double the percentage of those who noted suicidal thoughts with fewer remaining payments, or who had already reached forgiveness.

Similar results were found in a survey by the Education Trust, a nonprofit education advocacy group, that looked at the disproportionate impact of student debt on Black borrowers. Of the 1,272 Black borrowers surveyed, 64% said student debt had a negative impact on their mental health. When interviewed, respondents mentioned experiencing a “loss of confidence, high levels of stress, anxiety, and suicidal ideation,” according to a summary of the 2021 study.

Given the impact of debt on borrowers’ well-being, anyone feeling burdened by student loans should find ways to manage their mental health as well as their finances.

» MORE: How to get student loan help

How to cope with severe stress due to student debt 1. Find community

A support system can be a difference maker if debt leaves you feeling alone, ashamed or full of regret.

“Having a community helps students and past students feel connected to people who are going through similar situations,” says Katherine Street, a Lexington, South Carolina-based mental health clinician with TimelyMD, a virtual student health care platform. “At a minimum, it gives them support that might have felt unconquerable to get through alone.”

Street, seeing a common theme of self-blame with regard to financial struggles, says that shame can leave you feeling like an outlier. Instead of hiding, realize that you can get through this. You’re a part of a larger group of borrowers facing a similar struggle.

2. Fully understand your financial situation

Ashley Agnew, a Dartmouth, Massachusetts-based certified financial therapist with investment management firm Centerpoint Advisors, says student debt stress can often show up as an “out of sight, out of mind” relationship with money. Completely avoiding your finances is one way financial distress can manifest itself, she explains.

But without taking the difficult step of looking at your finances — total debt, monthly expenses and monthly income — you can’t create a realistic plan to get out.

In fact, a common piece of advice given by financial experts to those overwhelmed by student debt and severe stress is to create a personalized money plan. But it isn’t something you have to do alone.

» MORE: How to lower student loan payments

3. Work with an expert

A licensed therapist can help you process a lot of the thoughts, feelings and emotions that come with severe stress, offering strategies to cope while you work on your finances.

Certified financial planners, or CFPs, will work with you to create a plan. This could involve diving into the details of your spending and exploring your student loan repayment and refinancing options to land on a unique strategy that helps you manage it all.

Similarly, you can work with a certified financial therapist for a blend of therapeutic strategies to help you deal with financial stress and financial strategies so you can better manage your student debt.

For example, visualization or “imagery” — a psychological technique used to improve the chances of achieving a goal — can be used in combination with budgeting, aggressive debt payoff strategies and other healthy financial habits. Financial planning paired with visualization, according to Agnew, can open the borrower’s eyes to a more positive financial future by showing them what’s possible.

Many licensed experts come with a fee, but some schools and companies may offer mental health and financial counseling at little to no cost for qualifying members. If you work for an employer, start by contacting your human resources department to see what benefits may be available to you. Students can also reach out to their school’s student services department.

Last, if you experience suicidal thoughts or ideations, please reach out to the 988 Suicide & Crisis Lifeline, formerly the National Suicide Prevention Lifeline, by calling 988 on your phone.

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For the executive, professional, or business owner, having a thought partner that keeps you on track, growing and meeting your goals can be highly effective.

The right executive coach – one who supports you in developing an ability to lead while helping to grow your business or area of responsibility – can do this for you. In fact, statistics show that investing in the right executive coach has an average of 3%-10% return on investment. Because of this, the need for good coaches is growing.

However, even when you have found one that works for you, there are times when it’s necessary to make a change. It may be that your executive coach has retired, won the lottery or died. Or it can be that your current coach can’t help you move to the next level.

So, how do you handle this?

You could certainly decide to do without an executive coach. After all, chances are that you arrived at a certain point professionally without that help. At the same time, when considering the ROI described above, you may want to engage a new one.

When to make a change Here’s a telltale sign you need to consider change: You and your coach have come far. You’ve grown immensely and accomplished some great things by working together. However, you feel stalled with this coach and are no longer able to meet new goals.

As with any helping profession, a coach knows that they cannot support development and business needs if they don’t have the training, lens and experience to keep helping you move forward. If you find yourself in this situation, it’s probably time to make a change.

On the other hand, you may be grieving the loss of a great coach. Here’s hoping they did not die, but instead won the lottery and went on to an exciting new chapter. But no matter how they exited, this still means that you are without a thought partner. And you’ve decided the value this support brings to you is such that you want to find a replacement.

Criteria for replacing your executive coach should include the following:

—Energy fit. Do they energetically feel like a good fit for you? When connecting with potential coaches, make sure that you are comfortable with the way you connect with them in conversation. Does it feel comfortable and trustworthy, or stilted and awkward? Just as you are unique in how you show up, so is the coach.

—Formal training and certifications. Where did they receive their training for executive coaching? Is this a school accredited by one of the coaching industry bodies (International Coach Federation, for example). Did their training provide evidence-based methodologies for coaching – proven frameworks that help develop people? Do they have current certifications that reflect best practices in coaching standards?

—Experience. Is the coach you are interviewing one that has a modicum of experience coaching with other executives or leaders at your level? Have they dealt with challenges similar to those you are outlining? An executive coach does not need to be a knowledge expert in your industry but must know how to facilitate your thinking processes and decision-making for the growth you seek.

—Their approach. Can the coach outline how they would approach what you are looking for? Can they articulate their process for helping you to identify and reach your goals? Do they include a way to measure progress and success? If diagnostics are needed, can they provide these to incorporate in your work together?

—References. Can the coach provide you with 1-2 references from satisfied clients? Don’t hesitate to reach out to these references to learn more about how they felt their experience was, and the differences it made.

Executive coaching can certainly help you sharpen your leadership skills to achieve higher performance and greater work satisfaction. Choosing the right one if you need to replace yours, however, will be key to your success moving forward.

Patti Cotton serves as a thought partner to CEOs and their teams to help manage complexity and change.  Patti@PattiCotton.com.

If your accounting firm is taking an unusual amount of time to return your calls, or if you have found errors they should have caught, there might be a good reason.

Approximately one-sixth of accountants and auditors left the profession in the last two years, according to the Wall Street Journal. The American Institute of Certified Public Accountants reported 75% of Certified Public Accountants had reached retirement age by 2020, and many decided after the pandemic that they had had enough.

Making matters worse, new college graduates are opting for less technical professions with higher pay, not as much stress and shorter hours. As a result, most firms are critically understaffed and overworked, and clients are suffering because of it.

So, what should you do if, instead of receiving that annual organizer package, you receive a notice that your accountant has sold their practice or retired?

Your first step is to dig out your last three years of personal and business returns with all the supporting paperwork. Your tax professional should have provided you with a pdf or hard copy of your completed returns at the time of service. They also should have returned all of your original documentation.

Should I prepare my own return? After gathering your documents, the first question you should ask yourself is: Are my taxes simple enough to do myself?

If you are one of the 90% of Americans who no longer itemizes their deductions, and if you do not own a business, rental properties or investments (other than traditional retirement and brokerage accounts), you could consider using a tax program to prepare your own taxes.

Tax programs have become increasingly easy to use, and you can avoid the cost of hiring someone. Programs commonly offer an interview approach with the questions a preparer would ask if they were sitting across from you. Sometimes, a tax person can answer questions over the phone for an additional fee.

The disadvantages of preparing your own taxes depend on your return’s complexity. The more complicated your taxes, the more time you will spend researching regulations and completing forms. You might miss valuable deductions and credits. Also, there is a chance there will be errors your tax program will not catch. Even unintentional clerical errors can lead to potential audits and penalties.

Do I need a CPA? If you decide preparing your own taxes is not worth it, who will you hire to prepare your returns?

If you have a simple return, using a tax preparer should be sufficient, with a caution that the quality of preparers varies widely. It is easy to become a licensed preparer, and most do not carry insurance for errors and omissions. So, If one year your return is more complicated or if you require accounting services, the tax preparer may be unable to help. Also, only EAs, CPAs and attorneys can represent you if you are audited.

What is an enrolled agent? Enrolled agents are tax professionals licensed by the Internal Revenue Service to represent taxpayers in all matters related to the IRS, including audits, collections and appeals. An EA candidate must pass a comprehensive exam and a background check. They are a good choice for tax preparation for most taxpayers.

If a preparer claims to be an EA or CPA, those initials will be after their name on the signature page of your 1040 tax form. (Watch for similar tricky initials like CBA or ETA that are not the same.)

You can also go online to the IRS (for EAs) or State Board of Accountancy (for CPAs) to check if a license is in good standing.

When most people think of CPAs, they associate them with taxes. However, most CPAs do not specialize in individual return preparation. Surprisingly, taxes represent only a small portion of the CPA exam.

Some CPAs specialize in tax planning, a service separate from tax preparation. Tax planning is developing a strategy to minimize or delay the taxes you pay. Examples of tax planning are the choice of an entity when you set up a business, maximizing tax deductions with benefits planning, and deferring taxes with the timing of transactions.

While both EAs and CPAs can prepare accurate tax returns and are held to professional standards, EAs are less likely than CPAs to utilize tax planning strategies, primarily because EAs are trained by the IRS.

Most higher net-worth families hire CPAs. The relationship with a CPA is much more comprehensive than a once-a-year meeting to fill out tax forms. CPAs generally talk with their clients several times a year and work with their attorneys, bankers, financial advisors, and other consultants to meet the client’s financial and tax savings goals.

Also, although many EAs call themselves accountants, the EA license does not require a college degree or any accounting education or experience. Therefore, a CPA would be preferable if you own a growing business since CPAs have years of comprehensive training and experience in accounting, finance, and business. They could be particularly helpful with obtaining financing, managing cash flow, and maximizing the value of your business for eventual sale.

What is an LLM? If you see LLM behind an attorney’s name, it stands for a Master of  Laws (generally in taxation) that they earned after law school. They can represent clients in court and advise on tax-related matters. It is increasingly uncommon to find one who prepares returns. You will typically want to hire them if you have complex tax situations or legal issues, such as a tax dispute with the IRS.

Not all tax professionals, even licensed ones, are equally qualified. If necessary, file an extension this year and take your time to interview several professionals over the phone. (Just a reminder that an extension will extend the time to file your return, but your tax balance will still be due by the original due date of your return.)

When you call them, inquire about recent law changes they have learned about, how many returns they prepare a year, and if they have time for new clients. Also, ask about their audit representation experience and if they specialize in clients like you. They should be open to answering your questions,  and you should feel a rapport with them. Listen to your instincts.

If you choose your tax professional wisely, you can have a rewarding lifelong relationship, at least until they decide to retire.

Michelle C. Herting specializes in succession and tax planning, trust administrations, and business valuations.