What to Buy and What to Skip in December

December blows in at the peak of the holiday shopping frenzy, and then it tiptoes out with the end of the year and post-holiday calm. Black Friday deals are long over, and there are no major shopping holidays this month, but you can still find a fabulous deal before and after the holidays. So, whether you’re finishing up your holiday shopping or looking for year-end bargains in any category this month, we’ve got you covered. 

Here’s what to buy and what to skip in December. 

Buy: Electronics

If you missed the Black Friday sales on electronics, you can still cash in on some incredible savings. Many retailers will keep the leftovers from November’s sales marked down through the end of the month. Look for discounted electronics at big box stores, online retailers and directly from manufacturers.

Skip: Winter clothing

It’s still too early in the season to find any real discounts on clothing. If you can wait until retailers start slashing prices on cold-weather wear after the holidays to drum up some business, you’ll save big on winter wardrobe essentials. 

Buy: Toys

As the year draws to a close, you’ll start seeing steep discounts on toys and games from retailers that are looking to clear the season’s inventory before the holidays. If you can handle the stress of last-minute shopping, the week or two leading up to Christmas can be the perfect time to pick up some budget-friendly stocking stuffers for the special little someones in your life.

Skip: Fitness equipment

Trying to slim down before the holidays? Hold off a bit on purchasing exercise equipment and you can save big. Soon, fitness gear and clothing, as well as gym memberships, will drop in price as consumers commence with the annual New Year’s resolutions fitness craze. Until then, you can enjoy brisk walks and runs around the neighborhood at no cost.

Buy: Champagne

Welcome the new year with the pop of your favorite champagne, all at a price that doesn’t break the budget. Liquor sellers will be competing for your business this time of year, and prices on the celebratory beverage will plunge as New Year’s draws near. Take advantage by stocking up on your favorite bubbly at a bargain price.

Skip: Furniture and bedding

This isn’t the time of year to upgrade your household and give your bedroom a facelift. Furniture and bedding will be sold at full price at most retailers this month. Instead, wait for the January white sales to purchase the same items at discounted prices. For even deeper discounts, shop for furniture and other home goods at fantastic prices at Presidents Day sale events in February.

Buy: Christmas decorations

Prepare to deck the halls without spending a bundle. You’ll find holiday decor, wrapping paper, tree ornaments and more slashed up to 50% in price the day after Christmas. With prices like these, it’s not too early to think about next year’s holiday season! Just keep

everything well-wrapped and store in a dry place. Come next year, you’ll be ahead of the holiday shopping before the season even starts. 

Buy: Gift cards

Gift cards are the perfect antidote to out-of-control inflation. They’re always appreciated, and you won’t feel like you’re spending a ton on a gift that’s not really worth the price. Best of all, you can find discounted gift cards all through December on sites like GiftCardGranny, CardCash and through private sellers listing on sites like Craigslist. Some sites will even let you customize the card with a personalized message for the recipient. 

The year is drawing to an end, but the savings on some items is just beginning. Use the tips outlined here for knowing what to buy and what to skip in December. 

Your Turn: Have you picked up any great buys in December? Tell us about them in the comments!

Don’t Get Caught in a Non-Delivery Scam

With the holidays approaching, and online shopping reaching its annual peak, scammers are out in full force to get at your money and your purchases. There are many scams to watch for this time of year, from online “retailers” phishing for information as you shop to brazen porch thieves who swipe delivered packages from doorsteps and so many more. The non-delivery scam can be particularly difficult to spot, and recovery is nearly impossible. Here’s what you need to know about this scam and how to protect yourself.

How the scam plays out

In a non-delivery scam, a shopper makes an online purchase, often at a discounted price. They may have chanced upon this “sale” through a social media ad, an unsolicited email or a banner ad on their favorite website. Unfortunately, though, the promised package is never delivered. After weeks of waiting, the shopper may try reaching out to the seller, only to find that the seller’s gone AWOL, along with the victim’s chances of recovering their money and/or their purchase.

Protect yourself

The best way to protect yourself against non-delivery scams is to practice online safety measures and to shop smartly. Here’s how.

  • Never click on links or attachments in unsolicited emails or on social media, regardless of how amazing the offer may be. If an ad looks promising, look up the alleged associated retailer directly and on your own. 
  • Keep your device’s security at its strongest settings and mark all suspicious emails as spam. 
  • Opt out of websites that are full of typos and/or grammatical errors.
  • Check each website’s URL for authentic spelling and signs of security, like the “https” and padlock icon. Recheck each landing page as you shop. 
  • When shopping a new seller, do some research before sharing any information with the seller. Look for a phone number and street address associated with the seller or company, dig up some online reviews and ratings and Google the retailer’s name along with the word “scam” to see if anything comes up. 
  • When shopping a private seller on an online marketplace, like Jiji or Etsy, check the seller’s profile carefully. Be extra wary if the profile is new.
  • Avoid shopping at retailers who insist on payment via prepaid gift cards or wire transfer. When shopping online, it’s best to use a credit card.
  • Stay away from sellers who advertise as if they are residents of the U.S. and then respond to questions by claiming that they are actually out of the country.
  • Always ask for and save the tracking numbers of online purchases. Monitor the shipping process so you can dispute the charge if the process seems suspect.
  • Be wary of items with prices that are too good to be true; in all likelihood they are.

If you’re targeted

If you believe you’ve fallen victim to a non-delivery scam, there are steps you can take to mitigate the damage. 

First, if you’ve paid via credit card, call the issuing company to dispute the charge as soon as you recognize the scam. If you believe the account has been compromised, you may want to close it and place a credit alert and/or credit freeze on your name as well. Next, be sure to alert the FTC about the scam so they can do their part in catching the crooks. If the alleged retailer is on the BBB website, you can let them know, too. Finally, let your friends know about the scam so they know to be aware.

Online commerce makes holiday shopping so much easier–but scams are everywhere. Shop smartly this season and follow the tips outlined here to avoid getting scammed. Stay safe!

Your Turn: Have you been targeted by a non-delivery scam? Tell us about it in the comments. 

All You Need to Know About SIM Swaps

SIM swapping, also known as SIM swap scams, or SIM hijacking, can be a nightmare for an unwary victim. According to a recent announcement by the FBI, this ruse is on the rise. In 2021, the FBI received 1,611 reports of SIM swapping, with losses totaling over $68 million, a more than five-fold increase from the 320 SIM swap complaints occuring in 2018 and 2019 combined. Here’s what you need to know about this prevalent scam and how to protect yourself. 

How the scam plays out

In a SIM swap scam, a criminal steals a target’s mobile phone number by tricking the victim’s cellphone provider into transferring the number to a SIM card in the criminal’s possession. 

Before the actual scam is pulled off, the scammer will generally employ a phishing scam to obtain some basic information about the target’s mobile number and phone service provider. They may reach out to the target via email, text message or phone call. They’ll pretend to represent the service provider, and ask the target to share or confirm their phone number and/or account number. They may claim there is an issue with the target’s account, and say they need this information to fix the problem. Unfortunately, the target often believes they are engaging with an authentic representative of their phone company, and willingly shares this information.

Next, the scammer will call the target’s service provider and use this info to convince them that they are actually the target. The scammer will claim that their SIM card has been lost or destroyed and they’ve purchased a new one to replace it. If the mobile service provider falls for the ploy, they’ll transfer the phone number to the scammer’s SIM card.

Finally, the criminal inserts the now-active SIM card into their own device and uses it to access the victim’s accounts by bypassing the SIM-based two-step authentication. The scammer then proceeds to change all passwords for online accounts linked to the phone. Unfortunately, this leaves the victim with an inactive SIM card and worse, locked out of their own accounts.

Protect yourself

Despite its prevalence, there are ways to protect yourself from SIM swap scams. The FBI advises consumers to take the following precautions:

  • Never share information about your financial assets while online.
  • Never share information about your mobile phone number or cellphone provider with an unverified contact over the phone or online.
  • Don’t assume every communication from an alleged service provider is legit. If you receive an unexpected call, message or email from your mobile phone’s provider asking you to share or confirm information, do not engage. Contact the provider directly to determine if the communication was authentic. 
  • Keep your social-media platform settings private.
  • Use strong, updated security for all your devices. 
  • Never share personally identifiable information online. 
  • Use strong, unique passwords across all your online accounts.
  • When possible, use strong, multi-factor authentication, standalone authentication, apps and physical security tokens to access accounts that contain sensitive information.
  • Don’t allow your mobile devices to “remember” your passwords, usernames and other personal information.

If you’ve been targeted

If you believe you’ve been targeted by a SIM swapping scam, take these steps to mitigate the damage:

  • Reach out to your cellphone provider for assistance in regaining control of your phone number.
  • Change the passwords and logins on all your online accounts.
  • Let your financial institution and credit card companies know about the scam so they can look out for suspicious activity on your accounts. 
  • Consider placing a credit alert and/or credit freeze on your accounts. 
  • Report the scam to your local FBI field office, your local law enforcement agency and the FBI’s Internet Crime Complaint Center.

Stay alert and stay safe!

Your Turn: Have you been targeted by a SIM swap scam? Tell us about it in the comments. 

How Can I Save on Holiday Shopping?

Q: I’m always worried about money during the holiday season, and with inflation soaring, I’m more stressed than ever. How can I save on holiday shopping this year?

A: If you’re worried about making it through the holiday shopping season in the midst of record inflation, you’re not alone. A recent survey shows that 59% of American shoppers are stressed about buying holiday gifts this season due to higher prices. However, with some careful planning and budgeting, you can enjoy stress-free holiday shopping. Here are seven easy ways you can save during this holiday season.

  1. Shop early

It’s always a good idea to do your shopping early in the season so pressure and crowds don’t cause you to make decisions you’ll come to regret. This year, experts are urging shoppers to hit stores earlier than normally planned so they can take advantage of early season sales. Many big-box stores are struggling with a supply surplus thanks to an inflation-triggered decline in demand. This will likely lead to sales events to make room for more up-to-date inventory. You can take advantage of this surplus by shopping these sales and saving on your holiday purchases.

2. Set a budget

Budgets are for holidays, too. Sit down before doing your shopping to build a reasonable budget for your holiday shopping. Factor in current prices when working out your budget. Of course, this is only half the work – you’ll need to stick to that budget for it to be worth anything. Make this easier by allocating a specific amount for every gift, shopping with cash and/or reviewing your budget frequently as you do your holiday shopping. 

  1. Shop with a list

Instead of hitting the stores blindly, create a list of every gift you plan to buy for friends and family. You can browse online stores for inspiration, but resolve not to start shopping until you have a complete list. You’ll be far more likely to stay within budget when your purchases are pre-planned. 

  1. Leave some last-minute shopping for Green Monday

While it’s best to do the bulk of your shopping early in the season, you can leave some last-minute gift-shopping for Green Monday, which falls on Dec. 14 this year. This is when retailers make their final pre-holiday markdowns. Be prepared for slim pickings, though, so don’t leave any specific gifts for this late in the season. 

  1. Think outside the box when planning your gifts

If ever there was a holiday season to get creative with your gifting, this is it. Retail inventories are full of products that were backed up during the post-pandemic supply-chain disaster. Think furniture, home decor and more. While much of this may not make for typical holiday gifts, there’s no real reason you can’t delight a loved one with a new office chair, exercise bike or coffee organizing station.

  1. Give gift cards

Protect your gift list against inflation by giving gift cards. You can find discounted cards on sites like GiftCardGranny and CardCash, or use cash-back apps to earn them at no cost. Gift cards are easy to shop for, easy to budget for and always appreciated by the receiver.

  1. Use apps to save

In 2022, there are so many apps that can help you spend less on your shopping, and even put money back in your pocket. Here are some money-saving apps you might want to download ahead of this shopping season:

  • Drop. This free app allows you to link your credit and/or debit card, and shop directly from the app at 300+ retailers. Earn points back on every purchase. Use your points to purchase gift cards.
  • Honey. Why pay full price when you can get the same item for less? This coupon-scanning app will automatically find promo codes and coupons for items you’re searching for so you can save on your shopping. You can earn points on purchases made through the app, too.
  • Fetch. Earn points on grocery purchases by scanning your receipts after you shop. Redeem points for gift cards.
  • Ibotta. Get cash back for your purchases by scanning your receipts with this app. Use for online purchases, and by linking store loyalty cards for in-store purchases, too. Redeem points for cash or gift cards. 

Holiday shopping may be a race against inflation this year, but with a little pre-planning, you can complete your shopping with your budget intact. Use the money-saving tips outlined here to get started.

Your Turn: How do you plan to save on holiday shopping this year? Share your best tips and hacks in the comments. 

Step 10 of 12 Steps to Financial Wellness-Plan for Retirement

[Now that you’ve learned how to indulge responsibly and are mindful of your credit score, it’s time to start planning for retirement. This is true no matter your stage of life.]

It’s never too early – or too late – to start planning for your retirement. However, like all long-term savings goals, retirement should ideally be planned for as much in advance as possible. That’s because the more time you allow for your savings to grow, the bigger the nest egg you’ll be rewarded with when it’s time to cash in on your funds. 

Here’s how to get started on planning your retirement.

Set a target number

Before you start squirreling away money for the future, determine how much you’ll need to have saved for living comfortably and independently throughout retirement. Experts recommend taking your current living expenses and multiplying that number by 400 to reach the amount you’ll need for sustaining yourself based on a 4% return.

Choose your retirement accounts

Next, you’ll need to select a place to keep your retirement savings. There are many options to consider, some of which you may already have if you are employed. Here’s a quick review of the two most common retirement accounts:

  1. 401(k)

If you’re currently or previously employed, you may already have a 401(k) that’s collecting money for your retirement, and investing it so it can have an opportunity to grow. Take advantage of this retirement tool by maximizing your contributions. Additionally, many employers will match a portion of, or all, your contributions, which is literally free money that will help your investments grow, tax-deferred.

  1. IRA

An Individual Retirement Plan (IRA) is a retirement fund that allows your money to grow, tax-deferred. Like with a 401(k), some employers will match a portion of, or all, contributions. However, there are federal limits on how much you can add to your IRA annually. You can choose between a conventional IRA or a Roth IRA. A conventional IRA lets your money grow tax-deferred, but withdrawals are taxable. A Roth IRA does not feature tax-deferred growth, but qualified withdrawals are not taxed.

Presented in the table below is a brief summary of the pros and cons of each retirement vehicle for easy comparison. 

Features401(k)IRARoth IRA
Allows Matching FundsYesNoNo
Tax-DeductibleYesDepends on income, tax-filing status and other factorsNo
Tax-Deferred GrowthYesYesNo
Taxable WithdrawalsYesYesNo
Maximum Yearly Contribution (2022)$20,500$6,000 $6,000
Maximum Yearly Contribution Age 50+ (2022)$27,000$7,000$7,000

After you’ve identified the retirement fund strategy that best works for your goals, you’ll also need to choose somewhere to invest the money. Low-risk investment vehicles, such as federal bonds or trust funds, are usually the best choice.

Select a target date fund

If you are saving for retirement through the use of a 401(k), be sure to check if your employer offers a target date fund. This refers to your planned retirement date. You’ll know your employer offers a target date fund if there’s a calendar year in the name of the fund, such as “B.K. Holdings Retirement 2055 Fund”. Simply determine an estimated guess of the year you intend to retire, and then pick the fund with the date closest to your anticipated retirement date. 

A target date fund is a smart choice because it spreads the money in your 401(k) across many asset classes, such as large company stocks, small-company stocks, bonds and emerging-markets stocks. Then, as you near the target date, the fund becomes more conservative, owning less stocks and more bonds, automatically reducing your risks as you near the date of your retirement.

With a bit of work and a lot of planning, you’ll have your future secured in the best way possible.

Your Turn: What’s your retirement vehicle of choice? Share it with us in the comments!

Broke Millennial: Stop Scraping By and Get Your Financial Life Together

Title: Broke Millennial: Stop Scraping By and Get Your Financial Life Together 

Author: Erin Lowry

Paperback: 288 pages

Publisher: TarcherPerigee

Publishing date: May 2, 2017

Who is this book for? 

  • Cash-strapped 20- and 30-somethings who are always stressing about money.
  • Anyone looking to take control of their financial health.

What’s inside this book?

  • A step-by-step guide to take you from broke to financial master.
  • Tips and tricks for tackling every kind of money situation, in addition to basics, like investing, credit card debt and budgeting.
  • Anecdotes from Erin’s own journey from a debt-crushed millennial to a money master who successfully negotiated a 40% raise.

 4 lessons you’ll learn from this book:  

  1. How to understand your personal relationship with money.
  2. How to manage student loan debt without falling into a panic.
  3. How to successfully navigate social outings in which you’re the only broke one among your friends.
  4. How to find out about your partner’s true financial health.

4 questions this book will answer for you:  

  1. Should I treat money more like a Tinder date or a marriage?
  2. Is it possible to conquer a mountain of debt without getting a massive windfall?
  3. How can I learn about money on millennial terms?
  4. How can I get on the same money page as my partner?

What people are saying about this book: 

“Broke Millennial takes the typical preaching and finger-wagging out of money lessons and replaces them with humor, empathy and a fun, pick-your-financial-path twist, while offering helpful and practical advice to successfully navigate all the financial questions you’ll face in the real world.”— Farnoosh Torabi

“Rich with specific advice to guide readers on the path to financial wellness. Millennials who may be overspending because of #FOMO need to read this book stat!”— Bobbi Rebell

“Thinking about money, especially when you don’t have much, can be painful. But Erin Lowry shows that you don’t need to be a mathematical genius to get on the right track. She makes it easy for people to build a financially healthy plan for life. Spend some time with this book, and your financial decisions and confidence will improve, no doubt.”— Nicholas Clements

“If you’re looking for a book to give to a recent grad, your friend who has no idea what a budget is, or just want to read a personal finance book from someone like you who’s been there…you absolutely need to grab a copy of Broke Millennial.” — Jessica Moorhouse

Your Turn: What did you think of Broke Millennial? Share your opinion in the comments. 

What to Buy and What to Skip in November

The biggest shopping month of the year is here! With Black Friday deals running for as long as the entire month of November and Cyber Monday giving the internet a chance at boasting super-low deals, too, ‘tis truly the season to save. Before you start charging up a storm, though, keep in mind that not every Black Friday deal is really all it’s cracked up to be. Some purchases should wait until December – or until after the holidays have passed. Lucky for you, we have the info you need to score the best deals this month (and beyond). Here’s what to buy and what to skip in November. 

Buy: Headphones and audio gear

Tune into your favorite holiday jams with a pair of state-of-the-art headphones bought at a bargain price. Music gear is marked down in November, with sales on all things audio beginning as early as late October and lasting through Black Friday near the end of November.

Skip: Winter clothing

The winter shopping season is just getting started, so you won’t be seeing deals on winter clothing just yet. This applies to winter outerwear, too; November is not the best time to shop for that overstuffed parka or warm woolen overcoat. Unless you absolutely need it now, wait another month or two before stocking up on cold-weather wear for steep savings.

Buy: Personal care items

Look your best this season without spending a fortune. You’ll find personal care and grooming items like razors, hair dryers, electronic toothbrushes and more marked down in November. Treat yourself to new products for the holidays, or stock up on favorites you can use all year. 

Skip: Toys

You may be eager to cross some gifts for little ones off your list, but you won’t find many deals on toys this month. Instead, wait until the calendar gets closer to the holidays to purchase toys and games at lower prices. Of course, you’ll risk finding some of the hotter toys of the season all sold out if you choose to wait, but for big savings on classic playthings that never go out of style, it’s best to wait.

Buy: Electronics

Marked-down electronics give Black Friday its fabulous name. You can check out stores and sites of major retailers for discounts on large and small electronics from Nov. 1 through the end of the month, though the best prices will only be available at Black Friday sale events. If you miss out on these marked-down prices, you can also find Cyber Monday electronics deals online. 

Skip: Jewelry

This is not the month for sparkly purchases, as most diamond and gold jewelry will be retailing at full price in November. Choose another holiday gift for a special someone and wait until the second half of February, when jewelry prices plunge up to 80%, to buy a beautiful new piece that you can save for a celebration, holiday or a just-because gift.

Buy: Gaming consoles

Major retailers are competing for gamer bucks this month, so expect to see the best bundles with the hottest games at bargain prices in November. Surprise the gamer in your life with a new console and/or trending games, or indulge your own hobby with new gear and games. 

Buy: Small home appliances 

If you need a new slow cooker, you want to spring for an Instant Pot or you need another kind of small home appliance, this is the month to buy it. Black Friday famously features super-low deals on small home appliances for the kitchen and beyond. Pick up a new vacuum cleaner, microwave, food processor and more at slashed prices in November!

Black Friday sales notwithstanding, there are some products you’d be best off skipping this month, but some you’ll want to grab for steep savings. Use this guide to learn what to buy and what to skip in November.

Your Turn: Have you picked up any fabulous deals in November? Tell us about it in the comments.

Don’t Get Caught in a Pre-approval Scam

You’ve got mail! But beware, because this particular missive telling you that you’ve been preapproved for a large loan – maybe even a mortgage – may not be as it seems! The exciting news may be accompanied by a check that’s made out to you and even for the full loan amount! It’s a dream come true. Until, of course, it all turns into a living nightmare. 

Here’s what you need to know about preapproval scams and how to stay safe.

How the scams play out

In a preapproval scam, a target receives a letter in the mail, an email or a text message informing them they’re preapproved, or “prescreened,” for a large loan. The letter is often accompanied by a live check, or an unsolicited check that can be cashed in by the named recipient – which is you. The letter may also be highly relevant to your life. For example, if you’re in the market for a new home, the offer may feature an alleged preapproved mortgage loan. If you’re looking for a new set of wheels, the letter will likely offer a bogus auto loan. More commonly, though, will be the offer of a personal, or unsecured loan, through a live check. 

When you go ahead and cash that check, you may be playing right into the hands of a scammer. 

The authentic-looking check cannot be cashed unless the recipient shares their personal information. Of course, this means providing a scammer, or a scam ring, with all the info they need to empty your accounts, commit identity theft or worse. In addition, the check may appear to clear but then bounce a few days later, leaving you to pick up the tab for any of the money you’ve spent. Finally, if you really do need to take out a large loan, the bogus offer can set you back significantly by hurting your credit score.  

Checklist for legitimate preapproval offers

If you have a credit history, you’ve likely received these preapproval offers at least several times. Some of them are actually legitimate offers to cover a loan for a large amount. How, then, can you tell which of these offers are legitimate or scam?

First, it’s important to know that, while some of these offers may be legit, that doesn’t mean they’re good for your financial health. If you cash that check and/or accept that loan offer, you’ll be bound by the loan terms, which you may not be truly aware of until the first repayment bill becomes due. Most of these preapproval offers will have exorbitant interest rates and may demand full repayment quicker than typical loans obtained from a bank or credit union. 

Now, let’s take a look at how you can determine whether one of these preapproval offers is legit. If you receive an offer as described, look for this information to verify the authenticity of the offer: 

  • A disclosure of the loan fees
  • The annual percentage rate (APR), which is the annual cost of the loan 
  • The payment schedule
  • The loan agreement
  • A privacy notice about the sharing of your personal information
  • An opt-out notice for future offers
  • Contact information for the sender, which includes a number and street address

If any of this info is missing from the preapproval offer, you’re likely looking at a scam. 

If you’ve been targeted

If you’ve been targeted by a preapproval scam or a legitimate but shady offer, there are steps you can take to protect yourself from further harm and to stop the annoying letters from landing in your mailbox. 

First, let the Federal Trade Commission (FTC) know about the circulating scam. Next, it’s important to note that, under the Fair Credit Reporting Act, you have the right to opt-out of future loan offers for five years, or permanently. To opt-out for the next five years, call 1-888-5-OPTOUT (1-888-567-8688) or visit OptOutPrescreen. To opt-out forever, visit OptOutPreScreen to request a Permanent Opt-Out Election form. Return the signed form and you should be off the list of all preapproval offers. Finally, keep your online interactions safe from scams by using the strongest and most up-to-date security settings across your devices and being careful about the information you share online.

Preapproval scams can be super-annoying and destructive, but you can outsmart them. Stay safe!

Your Turn: Have you been targeted by a preapproval scam? Tell us about it in the comments. 

What is the Homestead Exemption?

Q: What is the homestead exemption and how do I know if I qualify? 

A: The homestead exemption can help you save a significant amount on your taxes and offer other legal provisions. Read on for all your questions on the homestead exemption, answered. 

What is the homestead exemption?

The homestead exemption is a legal provision in a state’s tax laws that reduces the property tax on a home, can protect a home from bankruptcy and provides specific rights to surviving spouses. 

A homestead refers to a dwelling that is inhabited by the homeowner. It can be a manufactured home, a condo or a three-story colonial, though the exact criteria will vary by state.

The “homestead exemption” generally refers to the exemption the homeowner can claim when filing taxes to lower the taxable value of their home by a specific dollar amount. However, a homestead exemption can also provide additional legal protections, such as preventing the homeowner from having to sell the home after declaring bankruptcy. The homestead exemption also includes a feature of probate law, wherein the homestead does not have to be included during probate and can allocate an allowance for a surviving spouse or children.

What are the qualifying factors for a homestead exemption?

Eligibility requirements for the homestead exemption are different in each state. However, the principal qualifying factor in most states is that the homestead is the primary place of residence for the homeowner. Generally, the homeowner must be able to prove they have lived in the homestead on Jan. 1 of the taxable year to be eligible for an exemption. 

Some states make a general homestead exemption available to all homeowners who reside in the home. In other states, only senior citizens, surviving spouses of veterans and former military members and people with a disability can qualify for the exemption. There may be income limits for the exemption, as well. Other states establish qualifying criteria around the homestead alone. Still others, such as New Jersey and Pennsylvania, don’t offer the homestead exemption for tax filers at all. [In XXX, the homestead exemption is available for…]

How much money can I save with a homestead exemption? 

The homestead tax exemption can lower a property tax bill by a substantial amount. The dollar amount of your exemption can be directly deducted from the total taxable value of the home. For example, if you qualify for a $30,000 exemption on a $250,000 home, your taxable home value will only be $220,000. 

As mentioned, criteria for the homestead exemption can vary tremendously by state, and this is true of the exemption amounts as well. Most states have established a maximum amount for the exemption, which starts at just $5,000 and goes all the way up to $500,000 in states like Massachusetts and Rhode Island. In Florida, the homestead exemption can be as high as $50,000, Texans can write off $25,000 in a homestead exemption for school district taxes, and Californian homeowners can deduct $7,000 off their taxable home value. 

The average homestead exemption amount in the U.S. is approximately $30,000 to $50,000.

In addition to the dollar savings on your taxes, a homestead exemption can also freeze your home’s assessed value or limit how much the future assessed value can increase. 

How can the homestead exemption shield me from unsecured creditors?

The homestead exemption offers a limited amount of protection from unsecured credit lenders, which includes credit cards, personal loans and lines of credit. This means these types of creditors cannot force the homeowner to sell the home if they are owed money. The amount of financial protection offered for unsecured credit varies by state, with some states, including Florida, Iowa, Kansas and Texas, providing unlimited financial protection to qualifying homeowners against unsecured creditors.

It’s important to note that protection limits are relevant for the equity of the home and not for the value of the property. Consequently, if the equity of your home is less than the limit, the law prevents creditors from selling your property. However, if the equity of the home exceeds the state limit, creditors can force the sale of the home in question but will need to share a portion of the proceeds with the homeowner. 

Secured credit, however, like mortgage loans, cannot be protected by the homestead exemption. That means a homeowner can, therefore, lose their home to a mortgage lender if they are not up-to-date on their mortgage payments, even if they qualify for a homestead exemption. 

How can the homestead exemption help a surviving spouse?

Homestead exemptions are part of the probate code to help a surviving spouse. After someone dies, their surviving spouse and family may be granted the right to continue living in the homestead as their residence, even if the title of the house transfers to someone else. The right to live in the homestead may continue until the surviving spouse passes or the youngest child turns 18 years old.

In addition, some states preclude a property with a homestead exemption from probate proceedings. This can significantly lower the amount of estate tax owed to the state after the death of a loved one. 

Finally, homestead allowances can provide a surviving spouse with a specific amount of money, which is also protected from creditor claims. It’s important to speak with an estate attorney to find out exactly what you’d qualify for as a surviving spouse under the homestead exemption. 

How do I file for a homestead exemption?

To receive a homestead tax exemption, you’ll typically need to make a homestead declaration by filling out an application. The deadline is usually toward the beginning of the year, before the first quarter’s property taxes are due. The exact deadline will vary by state, so be sure to verify your state’s deadline and file the application in time. You’ll likely need documents to show proof of residency when filing an application for a homestead exemption. Depending on your eligibility criteria, you may also need additional documentation. 

Your Turn: Do you qualify for a homestead exemption? Tell us about it in the comments. 

All You Need to Know About Cybersecurity

Cybercrimes are increasing exponentially by the year. Unfortunately, developments like the pandemic, the growth of cryptocurrency and the increase in online working and shopping have created a target-rich environment for cybercriminals. In fact, according to Cybercrime Magazine, cybercrime will cost the world $10.5 trillion annually by the year 2025. 

The best way to protect yourself from cybercrimes of any kind is by being aware of common warning signs as well as keeping your systems and devices secure. High levels of cybersecurity are employed at all times on the internet to keep websites–as well as power grids, water systems and more–running and free of malicious activity. As a private consumer, you can also utilize cybersecurity on your own devices, albeit on a smaller scale. In honor of Cybersecurity Month, let’s take a closer look at this essential toolset and how to best harness it for your protection. 

What is cybersecurity?

Cybersecurity refers to the protection of all online devices, networks, data and electronic systems from attacks by hackers, scammers and cybercriminals. 

There are several major categories of cybersecurity:

  • Network security is the practice of securing a computer network from intruders who commit crimes via targeted attack and/or malware. 
  • Application security focuses on protecting software and devices from threats. 
  • Information security protects the integrity and privacy of data.
  • Operational security includes handling and protecting data assets. 
  • Disaster recovery and business continuity include the ways an organization responds to an actual or potential security breach.
  • Cloud security refers to creating secure cloud applications for companies that use cloud service providers, like Google, Amazon Web Services, etc. 
  • Identity management and data security protects processes that enable authorization and authentication of legitimate individuals to an organization’s systems. 
  • Mobile security protects data that is stored on mobile devices from threats like unauthorized access, device loss or theft, malware and viruses. 

Types of cybercrimes

Cybercrimes can be divided into several categories:

  1. Cybercrime includes criminals acting alone or in groups who target systems for financial gain or to cause disturbances.
  2. Cyber-attack will often involve groups of criminals gathering information for political reasons.
  3. Cyberterrorism is the act of hacking electronic systems with the intent of causing panic or fear.

Methods of cybercrimes

All forms of cybercrimes threaten cybersecurity in some way. Here are some of the methods cybercriminals use to wage attacks: 

  • Malware. This threat includes ransomware, spyware, viruses and worms. These can install harmful software, block access to computer systems or provide scammers with access to data.
  • Trojans. This attack tricks users into thinking they’re opening a harmless file when, in reality, they’re installing a backdoor that provides cybercriminals with unauthorized access. 
  • Botnets. This attack is conducted via remotely controlled malware-infected devices and is usually deployed as a large-scale attack. Compromised computers are integrated as part of the botnet system to further spread the attack.
  • Adware. This threat involves a potentially unwanted program that is installed without the user’s permission and automatically generates unwanted online advertisements.
  • Phishing. This attack is employed via email, text or social media message to trick the target into sharing sensitive information. Often, the tactic will also lead to the installation of malware.
  • Man-in-the-middle attack. In these attacks, a hacker will insert themselves into a two-person online transaction. The hacker will then steal data and/or login credentials.

How can I protect myself against cyberattacks?

Fortunately, there are lots of preventative measures you can take to protect your information and your money from cyberattacks: 

  1. Update your software and operating systems. Accept every update you are offered because these will provide the strongest and most current protection.
  2. Use anti-virus software. This software will detect and remove threats in real-time. 
  3. Use strong, unique passwords across all your online accounts. Be sure to vary your use of capitalization, symbols, letters and numbers. For optimal security, switch up your password every six months.  
  4. Never open email attachments or click on links from unknown senders. These can automatically download malware onto your device.
  5. Avoid using unsecured public WiFi. Using unsecure networks leaves you vulnerable to attacks.

Cybersecurity is a crucial component of modern day digital safety. This guide can help you learn how to utilize this essential toolset for your personal security. 

Your Turn: How do you utilize cybersecurity to protect your information and your money from cybercrimes? Share your best tips in the comments.