While Memorial Day weekend may be the unofficial start of summer, it’s also one of the last chunks of free time many people will have before summer vacations and other leisure activities overwhelm their schedules until fall. Why not make productive use of this holiday weekend and try one of the suggestions below for improving your finances? Most take a few hours or less to complete, and many can be done in less than 30 minutes. Better yet, you might enjoy your holiday weekend a whole lot more knowing you’ve done something good for your family’s finances.
[See: 12 Frugal Ways to Save on Vacation.]
1. Check your credit reports. By law, you’re entitled to one free credit report per year from each of the three credit bureaus — Experian, Equifax and TransUnion. If you haven’t already reviewed your reports in 2017, now is an opportune time to do so. ( Annualcreditreport.com is the government-authorized source for your free reports.) Taking a moment to review your credit report can alert you to any potential issues of fraud, stolen identity or erroneous information on your credit history. It can also highlight outstanding collections or other credit issues, which you may hope to rectify.
2. Request an increase in your credit card limits. Requesting an increase in your credit limits is one of the easiest ways to improve your credit score. Why? It’s simple: A significant percentage of your credit score is based on what’s known as your credit utilization ratio, which is your credit card balance divided by your overall available credit limit. So, if you owe $5,000 and have a $10,000 limit, your credit utilization ratio is 50 percent. But if your credit limit increases to $20,000, your credit utilization ratio suddenly drops to 25 percent. (Most credit experts suggest that you keep this ratio under 30 percent.) Keep in mind that a higher credit limit isn’t an excuse to run up higher balances. It’s a tool to improve your credit score by demonstrating your responsibility.
[See: 12 Habits of Phenomenally Frugal Families.]
3. Negotiate lower interest rates. While you’re on the line asking for a higher credit limit, also consider asking for a lower interest rate on your debt. If you’ve consistently been making payments on time, you can credibly argue that you’re a lower-risk customer and should qualify for a lower interest rate. This simple move can save you hundreds of dollars — if not thousands — on interest payments.
4. Rebalance your 401(k) or investment portfolio. Regularly taking stock of where your money is invested is critical, and rebalancing is key to ensuring that your money is invested as you intended. Let’s say you originally invested 70 percent of your 401(k) in stocks and 30 percent in a bond fund. Since stocks usually outperform bonds, however, you might find that your stock balance has outgrown your bonds, and your portfolio is now tilted 80 percent in favor of stocks — more than you planned. In this scenario, you might have more volatility or risk than you’d like. By rebalancing your 401(k) and other investment portfolios yearly, you can ensure that your money reflects your intended investment priorities and risk tolerance.
[See: 11 Easy Ways to Slash Travel Costs.]
5. Update beneficiaries and wills. Life’s big changes — marriages, the birth of children and even divorce or death — certainly impact your finances. One way to ensure some modicum of stability amid change is to regularly update beneficiaries on your insurance policies, 401(k) and other relevant assets, so that your loved ones (and your money) are protected. The same applies to wills, advance directives and powers of attorney. Make sure they all reflect your current wishes and present state of affairs.
6. Plan your donations. Charitable giving is one of the most meaningful uses of money you can employ, but unfortunately, it’s often done haphazardly, without much attention to your choices. Resolve to be more intentional about your charitable donations. First, tally what you’re spending in donations or in-kind gifts, such as monetary donations to charitable organizations, plus in-kind donations, such as used clothes or other goods. Then determine your budget for giving and spend a moment considering your charitable priorities. Are there causes you’d like to better support? Or are you spending too much on others that mean less to you? Finally, consider the tax implications of your giving. Mileage and a few other expenses for volunteering are tax deductible, as are food or medical expenses for fostered animals if you foster animals from an IRS-approved charity.
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6 Smart Money Moves to Make Over Memorial Day Weekend originally appeared on usnews.com
