This Week In Your Wallet: The Paper Chase
There is a pile — a growing pile, if I’m being honest — of papers on the top of my desk awaiting filing. They have been waiting longer than usual because it’s that time of year. Again. The time of year when I send everything tax-related to my accountant, clear out the 2017 files (shredding everything for which an end-of-year summary has shown up), move the old files to the basement and start again. Not my favorite way to spend a Sunday afternoon, which is why I haven’t tackled it yet.
It’s also the time of year I start receiving questions about what’s necessary. What has to be shredded, kept, tossed? What can be stored online versus off? Are there any new rules and recommendations?
My friend Ron Lieber tackled all of these questions in his column over the weekend. In a nutshell: There are some strange IRS guidelines about how long you need to keep the documents related to filing your taxes. The baseline is three years — but should you make a mistake or otherwise fail to report some of your income, it jumps to six years. (And if you neglect to file at all, you’re supposed to keep the paperwork forever.) How to interpret this? If your situation is straightforward — i.e. you get all of your income from one employer in the form of a salary — three years is okay. If you have multiple sources of income, however, I’d go with six — even if you’re sure you did everything right. Wondering what you should do with that shoebox in your closet filled with receipts? Scan, then shred. Lieber says digital copies are fine, as are credit card statements. When it comes to keeping records on your investments, you can usually depend on your brokerage firm to be your record-keeper (though it’s a good idea to ask how far back their records go). And there are certain pieces of paper you should hold onto forever, including insurance policies, loan documents, child support and alimony payment records, divorce documentation and home improvement receipts.
Oh, and if you missed Ron’s column about trying to unload a mortgage servicer he was unhappy with, you should read it. (It included some hysterical insights into his personality from his wife, the wonderful New York Times reporter Jodi Kantor (who was among those who broke the Weinstein story).)
The Scamming That Never Sleeps
According to a new study from Javelin Strategy and Research, 2017 marks the first year more Social Security numbers than credit card numbers were swiped by hackers. We mostly have the Equifax breach to thank for that. All in, an estimated 16.7 million Americans were victims of identity fraud in 2017— a record high, reports NBC News.
Much of this stolen data is being used to conduct what the security industry calls “new account fraud.” Thieves generally sell your data to others who use it to open new credit card, cell phone, and other accounts with your name on them. (It’s particularly bad when a thief has access to both a cell phone and payment account because they can then receive an authentication code on the phone that legitimizes their behavior on the account. Yes, that’s happening.) So how do you keep yourself safe?
While there’s no 100 percent solution, there are ways to decrease the odds you’ll be victimized. Use two-factor authentication wherever you can. (If you’re not familiar with it, think of it as separating the lock from the key. When it’s turned on, getting into your account requires a second, separate action, like a entering a code that’s sent to your phone through a text message — after providing a username and password.) Secure all of your devices by locking your screens. Steer clear of public Wi-Fi. And sign up for transactions alerts on your bank and credit card accounts. Finally, if you haven’t frozen your credit, it’s time.
Letting Your Bargain Guard Down?
According to new research from McKinsey and Company, Americans aren’t as concerned with being thrifty as we were just a few years ago. That makes sense — the economy is doing better. But the way in which we’ve let our guard down is interesting. Once we find a retailer we think is less expensive overall, we stop paying attention to prices and start spending more freely. Much of this freer spending is happening online.
The problem with that strategy — as we reported in our piece on home assistants — is that it doesn’t always work. Amazon (which I’m sure is the happy recipient of much of that online buying) will show you its best-selling air conditioner or dog leash (or whatever you’re searching for) — not necessarily its least expensive. Just a little tidbit to keep in mind when you’re running this weekend’s errands.
Facebook Could be Ruining Your Savings
Finally, should we be blaming social media for the fact that we’re such bad savers? This post on Average Joe Finance says perhaps. It points out that social platforms have broadened the swath of people we tend to compare ourselves to — and the pressure to look good for your virtual friends doesn’t look to be abating anytime soon. A study by the American Institute of CPAs found that 40 percent of American adults said that seeing other people’s purchases on social media made them look into similar purchases for themselves. On top of that, 11 percent said they followed through. Don’t get me wrong — I love seeing my friends and family doing well (financially and otherwise) on social media. But remind yourself: People generally only present their best selves. What’s going on behind the selfie is often another story entirely.
Have a great week!
Jean
