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It’s just a dollar here, a dollar there — until it’s not. Sewupari Studio / Shutterstock.com
How many times have you assumed you had money in the bank, only to find that most of it has trickled away, thanks to monthly subscriptions, pricey indulgences and mindless spending on guilty pleasures? If you’re like many people, it’s easy to lose track of everyday and monthly spending. But paying attention to bank account-draining expenses and fees can help you save money to put towards…
There were 12,000 holiday scam victims last year. Find out how to avoid becoming one this holiday season.
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People are much more open to spending money during the holidays, and criminals know it. In 2022, there were a total of 12,000 victims who reported a holiday shopping crime to the FBI, with $73 million in total losses.
Getting scammed out of your hard-earned money is bad enough, but it’s extra painful when you’re celebrating the holidays. Plus, the average American is spending $923 on holiday shopping this year, and losing a chunk of that money to a scammer could be a real blow.
To protect your personal finances this season, here are some of the top holiday scams, according to the FBI, and what you should do if you become a victim.
1. Charity scams
Unfortunately, some scammers like to prey on people’s generosity this time of the year, and some set up fake charities to do so. These scams are popular among criminals because they’re easy to set up and hard to track.
These fake charities pop up during the holidays, take people’s money, and quickly disappear. According to the FBI, criminals often used emails, fake social media accounts, websites, cold calls, and even crowdfunding campaigns to pull off the scam.
One of the best ways to avoid a charity scam is to research the organization thoroughly before you give it any money and be wary of receiving unsolicited requests for money online, via text, or through phone calls.
2. Gift card scams
According to the National Retail Federation, Americans will spend $29.3 billion on gift cards this year, which is probably why they’ve become a popular holiday shopping scam. Criminals may send unsolicited texts or emails asking you to purchase gift cards, seemingly coming from someone you know.
The FBI says criminals may pretend to be your boss, requesting that a lot of gift cards be purchased for a company event. The victim then buys the cards and sends them to the criminal, making tracking or recovering the loss extremely difficult.
3. Online shopping scams
These scams can take many forms, so it’s important to be careful when you receive a text, email, or see an online ad offering you a deal on an item that seems too good to be true. This could be a type of phishing scam that’s designed to steal your financial information.
The FBI notes that social media shopping scams are some of the most commonly reported and often involve posts that look like they were shared by friends. The posts may show offers for gift cards or vouchers, but the links take you to sites that collect your financial information.
To avoid this scam, be cautious about clicking on links for holiday deals on social media or a website, and research the company or site before entering your credit card number.
How to report scams if you think you’re a victim
If you think you’re the victim of a scam, you should first report it to your financial institution. If there is any chance of recovering your funds or halting any additional payments, your financial institution may be able to do so. But remember that the funds may not be recoverable in some cases.
The FBI also recommends that victims of online holiday scams file a complaint with the agency by visiting the Internet Crime Complaint Center at www.ic3.gov. Reporting the scam helps the agency track threats, freeze funds when possible, and warn others of scam trends.
And, as always, the best ways to protect yourself are to be wary of deals that seem too good to be true and to only give your financial information online to companies you trust.
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Although mortgage rates remain elevated, the borrowing limits for conforming loans are making it easier to finance a home purchase. Read on for the details.
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While there are several different types of mortgages in the United States, the most common are conforming mortgages — loans that meet the standards of Fannie Mae and Freddie Mac. Among other requirements, conforming mortgages can be made for no more than the conforming loan limits set by the Federal Housing Finance Agency (FHFA) each year.
Conforming loans are generally more straightforward to qualify for than loans that exceed the conforming limits (also known as jumbo loans). Since they are eligible for purchase by Fannie and Freddie, there is a specific set of standards when it comes to credit scores, down payment requirements, asset reserves, and more. On the other hand, jumbo loans represent more of a risk to the mortgage lender itself, so they tend to have higher approval standards.
In addition, conforming loans can be obtained with low down payments (as little as 3% in some cases). Jumbo lenders typically want a minimum of 10% down, although 20% is more common.
With that in mind, the FHFA recently announced the conforming loan limits for 2024, and they are increasing significantly.
The conforming loan limit is increasing
In 2023, the conforming loan limit is $726,200 in most of the United States for a single-family home. However, with home prices spiking higher in recent years, more buyers are surprised to find that a seemingly average home is falling into jumbo loan territory, making financing more challenging.
However, the limit is increasing by 5.5% in 2024. For single-family homes, the conforming loan limit is rising to $766,550 in most of the U.S. In higher-cost areas, the limit can be as high as $1,149,825. Some areas have a limit that falls between the two extremes, but in all cases, the conforming loan limit will be 5.5% higher than it was in 2023. You can use the full FHFA guide (link downloads PDF) to find the conforming mortgage limits in your area.
Conforming mortgage loans can be made for residential properties with as many as four units. And they can be used to finance primary residences, second homes, and investment properties. Here’s a quick guide:
Number of Units Base Limit High-Cost Market Limit 1 $766,550 $1,149,825 2 $981,500 $1,472,250 3 $1,186,350 $1,779,525 4 $1,474,400 $2,211,600
Data source: FHFA.
It’s also worth noting that these are loan limits, not purchase limits. For example, if you purchase a home for $900,000, you can use a conforming mortgage as long as the amount you finance does not exceed the limit.
Mortgage rates are still high
To be sure, this doesn’t provide much relief from soaring housing costs. It simply makes it easier for many borrowers to obtain mortgage financing for homes that have become significantly more expensive over the past few years. Mortgage rates are still hovering in the mid-7% range for 30-year loans. But with the ability to use a conforming loan, the qualification process can be significantly easier.
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It’s time to give your IRA some attention. Here are a few key moves to focus on in the coming weeks.
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You could decide to save for retirement in a regular brokerage account, with the upside of getting to access your money whenever you want without risking penalties. By contrast, tapping an IRA account before age 59 1/2 will generally result in a costly early withdrawal penalty unless you qualify for an exception, like buying a home for the first time.
On the other hand, traditional IRAs give you a tax break on your contributions. The more money you put into a traditional IRA, up to the annual limit set by the IRS, the more income you get to shield from taxes.
When you invest in a regular brokerage account, you’re responsible for taxes on investment gains year after year. In an IRA, those gains are tax-deferred, so you really don’t have to deal with them until the time comes to take withdrawals from your account.
If you’ve been saving for retirement in an IRA, you may be enjoying the aforementioned benefits. And you may have no plans to tap that account for many, many years.
But it’s a good idea to give your IRA a year-end checkup. Here are three specific moves you may want to look to make.
1. Check on your plan’s performance
The stock market, as measured by the S&P 500, is up 19.5% year to date, as of this writing. Perhaps the value of your IRA isn’t up quite as much, but that’s nothing to worry about. However, if your IRA is only up, say, 2% year to date, or isn’t up at all, then it may be time to take a closer look at your investments and make sure they’re suitable for you.
Any given stock could have a bad year. But chances are, if you’re looking at a huge discrepancy between the performance of your IRA and that of the broad market, then it could be a sign you aren’t diversified enough.
2. Review your investment mix
Maybe your IRA has done fabulously this year. It could be that your retirement plan is beating the broad market — woo hoo!
But that doesn’t mean your portfolio doesn’t need a diversification check. It’s still a good idea to review your investments and make sure you don’t have too large a percentage of your portfolio in a single company or market segment.
If so, a good time to make some changes is when the market is up — meaning now. And remember, if you sell assets within your IRA at a profit this year to make room for other investments, you won’t be hit with an immediate tax bill since gains are tax-deferred.
3. Try to max out — but don’t sweat it if you can’t
In 2023, IRAs max out at $6,500 for savers under age 50 and $7,500 for savers aged 50 and over. It’s a good idea to try to max out by the end of the year to ensure you’re getting the most tax savings. But if you’re not able to finish maxing out by Dec. 31, don’t stress out.
Unlike 401(k)s, IRAs give you until the following year’s tax-filing deadline to finish making contributions. So you technically have until April 15, 2024, to finish funding your account.
If money is tight in the coming weeks due to expenses like holiday gifts, you can always put off those contributions until the new year. However, getting that money into your account by the end of 2023 could make it easier to tackle your 2024 financial goals once January arrives.
It’s a good idea to spend a little time each December checking up on your IRA. Focus on these key moves to maximize your account.
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‘Tis the season for giving — and scammers know it. Learn these five signs of a charity scam so you don’t fall for their tricks.
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People are already in the giving spirit, so it makes sense that the end of the year is also one of the most popular times to donate to charities. And with so many causes vying for your attention, it’s not too difficult for a scammer to sneak in unnoticed. But you don’t have to fall for their tricks. If you see any of the following five signs, you’ll know to take your cash and run.
1. High-pressure sales tactics
Legitimate charities shouldn’t pressure you to donate, but scammers often do exactly that. They might talk up the importance of their mission or try to make you feel bad for not handing over your hard-earned cash right away, but don’t fall for it. It’s your money, and you can take all the time you need to make sure you’re comfortable with your decision.
2. Scant details on what the charity does
A real charity should be able to explain not just its overarching goal, but the steps staff take to meet that goal. The charity should also be able to give you some idea of what your donation is going to be used for. If the person you’re speaking to tries to beat around the bush or makes you feel as though you wouldn’t understand, that’s a pretty sure sign of a scam.
3. Requests for specific or unusual payment methods
The safest way to donate money to a charity is via check or credit card. If an alleged charity requires that you make your donation in cash or via wire transfer, gift card, or cryptocurrency, it’s a scam. These payment methods are more difficult to trace, which is why scammers favor them.
4. Names that don’t quite match legitimate charities
Scammers sometimes try to take advantage of the credibility of large, legitimate charities by either pretending they’re from that organization or tweaking the name slightly. If you’re unsure whether you’re dealing with a legitimate charity or not, it’s always best to avoid giving on the spot and instead look up how to donate to that charity online.
5. Unsolicited emails or phone calls
Charities generally won’t cold call you to seek donations. They might reach out if you’ve subscribed to a mailing list or expressed a prior interest in their cause. But if someone is just contacting you out of the blue, it’s unlikely to be legitimate.
What to do if you come across a charity scam
If you run into a charity scam, the most important thing is to avoid giving out any money or bank account information. You don’t want a scammer to gain access to your funds or steal your identity.
Notify the Federal Trade Commission (FTC) if you suspect a scam. Contact your state charity regulator as well. Provide as much information as you can about who you spoke to, the fake charity’s name and contact information, and anything else they told you. You may also want to alert friends and family via social media if the scammer appears to be operating locally.
How to find a legitimate charity to donate to
It’s not hard to find a legitimate charity to donate to. You can use one of the following tools to verify that the charity is real:
BBB Wise Giving AllianceCharity NavigatorCharity Watch
All you need to do is enter the name of the charity and look up its reviews. If you don’t see the charity there or there’s a lot of negative information about it, it’s probably not the right organization for you to give to. In addition, you can use these sites to browse for charities that match causes you’re interested in.
Fortunately, most people don’t run across charity scams too often, so you shouldn’t let it scare you away from donating. There are plenty of great organizations out there that could use your help this holiday season, and giving could earn you a nice tax break in the process.
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