- - Page 7 of 18 The Finance Gourmet

Can I Pay My Taxes with a Credit Card?

April 15, 2022 by Finance Gourmet

Yes, you can pay your taxes by credit card, but it isn’t free. In order to pay your taxes by credit card, you must use one of three payment processors. They charge slightly different fees to process your credit card tax payment. How Much Will It Cost to Pay My Federal Income Taxes with a Credit Card? Depending upon the credit card processor you use to pay your federal income taxes with, the fee will range from 1.87% to 1.98% with a minimum payment of $2.50. If you owe $3,000 on your federal taxes, your fee will be $56.10 to $59.40. That is a lot of money and probably not worth it unless you are doing it for some special reason. Is It Worth It to Pay My Income Taxes with a Credit Card to Get Credit Card Points or Miles? As a former financial planner, I still get a lot of money questions and have a lot of money conversations with friends and colleagues, like, “Can I pay my taxes with a credit card?” The number one reason people tell me they pay their taxes with a credit card is to earn credit card reward points or credit card …

Active Mutual Funds Suck Compared To Index Funds

March 28, 2022 by Finance Gourmet

You have probably heard before that most mutual funds do not beat the market. Well, it’s true again, or true still, whichever you prefer. The S&P Dow Jones Indexes (yes, they might be a little biased, but they make their data available, and no one says it’s wrong) put out a report called SPIVA U.S. Year-End 2021 in which they state that nearly 80% of all actively managed domestic equity funds lagged the S&P 1500 in 2021. Even worse, 98.6% of actively managed large-cap growth funds failed to beat the S&P 500 Growth. If that sounds too specific for you, 85% of actively managed large-cap funds trailed the S&P 500. The numbers aren’t much better for other categories. This year, the SPVIA leaves no room to “Yeah, but…” by putting to bed the notion that actively managed mutual funds better handle volatility noting that whether it’s 3-year, 5-year, 10-year, or 20-year risk-adjusted returns, active funds underperform the index. Survivorship Bias The reality is that the situation is actually much worse. Every year approximately 5% of actively managed mutual funds disappear via merger or liquidation. If you think mutual fund companies are merging or liquidating their winning funds, then I have …

401k Contribution Limits 2022 and 2023

October 31, 2022March 22, 2022 by Finance Gourmet

401k contribution limits prevent higher income taxpayers from stuffing too much money tax-free into their 401k plans. Each year, the IRS adjusts tax numbers due to either tax law changes, or statutorily mandated adjustments. However, in some cases, the tax amounts are tied to inflation so that they automatically adjust. In many cases, numbers are only modified for the current tax year when a certain limit or threshold is met. Limits for 401k contributions are indexed to inflation and adjusted every year in this manner, provided there is enough change caused by inflation to modify the numbers. 2022 401k Contribution Limits The current 401k contribution limits for 2022 were set by the IRS in late 2021. These limits are tied to an economic index that measures the overall cost of living. The index is designed to rise with inflation. By tying 401k contributions to the index, Congress doesn’t have to pass a law to change the 401k income limits or maximum annual 401k contribution amounts for 2022. The 2022 maximum 401k contributions limits are higher than they were in 2020 because there was enough inflation during the year to cause an increase. Check out this close look at the details of Acorns …

When Will My Savings Interest Rates Go Up?

March 18, 2022 by Finance Gourmet

Waiting for your bank or credit union to raise the interest rate they pay you on your savings or money market accounts? Don’t hold your breath. Better Savings Interest Rates While the Fed kept interest rates at zero, most banks followed suit with their basic interest-bearing accounts, getting as close as their computer software allowed, 0.01% interest or APY if you prefer. A quick search of big bank websites shows mostly the same. Sure, you can grab a little bit more interest on a little bit more money if you meet certain terms and conditions, but the basic savings accounts all look like this. Bank Interest Rate Chase Savings Interest Rate 0.01% US Bank Standard Savings Interest Rate 0.01% FirstBank Regular Savings Interest Rate 0.01% Bank of America Advantage Savings Interest Rate 0.01% USAA Savings Account Interest Rate 0.01% Wells Fargo Way2Save Interest Rate 0.01% According to company’s website as of 3/18/22 You get the idea. Most of these banks have a way to earn more interest if you perform certain steps like setting up direct deposit or keeping a minimum balance, but even then, the rates are nothing to write home about. The best high-yield savings accounts online do …

How Do Rising Interest Rates Affect Credit Cards?

March 17, 2022 by Finance Gourmet

How Does The Federal Reserve Raising Rates Affect My Credit Cards? You heard that the Federal Reserve raised interest rates. How does the Fed increasing interest rates affect your credit cards personally? It’s actually pretty easy to tell. First off, your credit cards are most likely tied to something called the prime rate, not the federal funds rate. The rate the Federal reserve raises is the rate the Fed charges banks for overnight loans. The prime rate is the interest rate that banks charge their most valuable (wealthy) customers. The prime rate moves in step with the Fed Funds rate. Before the Fed raised rates, the fed fund rate was 0% (technically 0% – 0.25%), now it is 0.25% (technically 0.25% to 0.50%). The prime rate was 3.25% and now it is 3.50%. How do rising interest rates affect your credit cards? Simple. Your credit card interest rate is the prime rate plus another amount. The other amount is made up by the credit card issuer and you agreed to it when you signed the credit card application. Finding out how much your interest rate is, is easy. Just check your statement or log on to your credit card’s website. …

Credit Karma Review – Complaints Accuracy Legit?

November 10, 2022March 2, 2022 by Finance Gourmet

Earlier we discussed how I first found out about Credit Karma and how, as a seasoned financial professional, I was inclined to think that Credit Karma is a scam offer for free credit scores. I decided to do a review after seeing some Credit Karma reviews that don’t really answer my questions (or the questions others seem to be asking.) Most importantly, I want to know is Credit Karma safe. Is Credit Karma legit? Update: Read here about an opt-in service Credit Karma review credit monitoring as a free additional service. Update #2: There is a free Credit Karma tax offering now available. Here is our Credit Karma tax review. Before we get started, there is one very important thing to be aware of. There are scam websites out there that take advantage of people thinking they are going to CreditKarma.com. Remember, Credit is with a ‘c’ and Karma is with a ‘k’. If you somehow end up on either KreditKarma or CreditCarma chances are you are in for a scam. If you get asked to enter a credit card number, be sure you are on the right website first. Second, this review is only about CreditKarma’s free credit score service. …

Russia Invades Ukraine

February 24, 2022 by Finance Gourmet

Thinking about your investments as war starts is kind of cold and calculating, but also perfectly natural. What should I do when Russia invades Ukraine? First, remember, investors do not like uncertainty. Nothing is more uncertain than the course of war. Expect a market downturn with every new development that isn’t the war ending. Second, remember that the markets tend to overreact to initial news because everyone is both reacting, and trying to predict how others will react. Third, remember if you have a well-diversified portfolio, this sort of thing should not affect your investing strategy. Markets go up and markets go down. As far as your long-term investments are concerned it doesn’t matter whether the markets went down because of war, or just a cyclical phase of the market cycle. Do not panic. Do not sell unless you were already planning it. Fourth, if you are actively investing for the long-term in your 401k, IRA, 529 plan, or whatever else, KEEP GOING. This is exactly how dollar cost averaging works for you. Your investments when the markets are down become your buying at the bottom in the future. Do not miss the opportunity. Dollar cost averaging does the work …

How To Improve Your Credit Score

August 2, 2022February 9, 2022 by Finance Gourmet

There is a lot of phony information out there about improving your credit score. There is also a lot of information that once worked, but doesn’t anymore, things like disputing everything on your credit report. So, what is the real way on how to improve your credit score? What Is In Your Credit Score? Let’s start from the beginning. What is in your credit score? Your credit score comes from the information in your credit report. If you are wondering how information gets on your credit report, your creditors are snitches. Each money, they report data to the credit bureaus about what accounts you have with them, how long you have had the account, how much money you owe, how much credit you have available, and if your payment was on-time, late, or never paid. How are they allowed to do that? Easy. When you signed up, it was buried in that agreement you never read. Besides, if it’s true, then there is nothing you can do about it. People are allowed to say true things about you. Your credit score is made up of four main things (check here for how your credit score is calculated) Your Payment History …

Blaming the Fed

January 27, 2022 by Finance Gourmet

Selective amnesia and analysts dying to be “right” is contributing to a flood of inaccurate articles seeking to blame the Fed. I saw this in my Twitter feed this morning and I just couldn’t let it go by. It’s filled with the kind of half-truths and misinformation that builds an analyst’s career, unfortunately, but that doesn’t make it true. Here we go. According to this tweet, The Fed spent 12 years creating an “everything bubble,” a term so bizarre that it requires quotes. Oh, and the Fed didn’t spend 12 years creating this so-called everything bubble. Oh, and before we start pointing fingers, until THIS YEAR neither this analyst, nor almost any other was asking for the Fed to tighten monetary policy because the economy was teetering on a cliff and every bit of the stimulus was required to prevent the Great Recession II, or worse. Yep. For exactly, ONE MONTH, inflation has been a bit crazy. Too bad the graph they posted as “evidence” is so far zoomed out that you can’t see what really happened. Maybe they couldn’t find one that showed more recent events. Oh, wait! Here’s one. The crazy, reckless Fed that has been pumping up …

Credit Karma Tax Review Free Scam or Good Filing?

September 26, 2022January 3, 2022 by Finance Gourmet

Has it really been five years since Credit Karma started Credit Karma Tax? Credit Karma tax is a free-ish way to file your taxes for free. While Credit Karma tax started out with some bumps it is now old enough to have chased out a lot of the bugs. And it is time to update our Credit Karma tax review. Credit Karma Tax Reviews Complaints CreditKarma.com offers a free tax return service, so it’s time for a Credit Karma tax review. The Credit Karma tax scam concerns are pretty much the same as with the original Credit Karma. You are handing over a lot of personal and financial data. The company has been around long enough to have earned some trust, but concerns about all online financial offerings are real. One main difference between Credit Karma and TurboTax, or other offerings, is that you cannot buy and download an offline version. You will fill out all tax forms online and the hidden Credit Karma tax calculator will perform all the calculations online, behind the scenes. Initial Credit Karma tax reviews are mixed, so let’s take a look. (Make sure you are not on CreditCarma, KreditKarma, or any other variations which …