Kathryn Vercillo

The Best Money Documentaries to Learn How Money Works

May 28, 2019 By Kathryn Vercillo Leave a Comment

I love to watch documentaries to learn more about a variety of different topics. There are many kinds of documentary films that are typically informative and entertaining. They range from following one individual’s experience to addressing a broad swath of social ills. Here is my list of the best money documentaries to learn how money works.

Documentaries to Learn How Money Works

There are a few good documentaries out there that help explain personal finance concepts. Not surprisingly, in this age of digital streaming, many of these are about hyper-modern issues such as cryptocurrency. While they may touch on individual lives and/or social issues, their overall benefit is in teaching the viewer the basic concepts of specific aspects of finance.

Maxed Out

This film provides a basic understanding of the negative impact credit cards can have on your life. I’m fairly comfortable with my knowledge about credit cards and debt. Nevertheless, it provided a good refresher.

Life and Debt

Maxed Out provides insight into the ways debt affects individuals. In contrast, Life and Debt explores how debt affects countries. If you are interested in international debt lending, then watch this film.

The Rise and Rise of Bitcoin

This was one of the first documentary movies that I ever watched about cryptocurrency. It provided me with a solid foundation for a better understanding of what this modern money is all about.

David Dreman, Contrarian Money Manager

If you feel like sometimes you get in your own way when it comes to investing your money, then you might want to learn more about market psychology. David Dreman is the person to teach you. His theories often go against the norm, which is precisely why you may learn something new from this documentary.

Time as Money: A Documentary Film About Time Banking

People today are hungry for connection. Time banking is a unique approach to connecting neighbors with one another. It’s a cashless network of trading services with one another. If you’re interested in learning more about this unique approach to reducing dependence on money, then this documentary will teach you all that you need to know.

The Retirement Gamble

This PBS documentary provides insightful information to people who want to learn more about the financial aspect of retirement.

Documentaries About the History of Money

There are some films like the above that showcase specific techniques for personal finance. However, I often learn the most about personal finance from movies that provide a broad overview of the history of money. Some are general, whereas others are about specific niches.

Money & Life: A Story About Money that Will Change Your Life

Almost all of the documentaries I’ve seen about the history of money have a negative tone. This is the exception. It posits the question of whether a modern financial crisis can also be a beautiful opportunity. It looks at the history of money through this lens.

The Ascent of Money: From Bullion to Bubbles

This film puts today’s issues into better perspective for me. This film examines 500 years of financial history around the world. It does a particularly good job of illuminating the early days of the modern banking system.

The End of Poverty?

This is a powerful examination of the history of poverty in developing nations. It looks back across time and examines the inequity of power and money.

Money Art: An Uneasy Alliance

One of the aspects of money that I personally have had the most trouble understanding is the financial value of art. It’s a complex issue, which this documentary addressed in depth. It explores a comprehensive history of the relationship between these two fundamental aspects of society. While I can’t say that I have any better knowledge of how to invest in art myself, after viewing the film, I do have a better understanding of the complexity of this unique niche of finance.

Frontline: The Untouchables, Money, Power and Wall Street

This is a 4-hour PBS Frontline investigation into banking and the Wall Stree bailout. Arguably, this is one of the money documentaries that could fall into the category of “socio-cultural.” However, its broad overview of the history of modern finance makes it particularly educational. If you find yourself sometimes baffled by Wall Street investing and want to learn more about how we got where we are today then check this one out.

Inside Job

I think the Frontline, as mentioned earlier documentary covers this same topic really well. However, Inside Job is the more popular documentary about it.

Socio-Cultural Money Documentaries

Some of my favorite money documentaries are those that look at socio-cultural issues through the lens of finance. We all know that money plays a huge role in everything from politics to prison reform, not to mention issues related explicitly to poverty and the income gap. It’s not the only issue, but it’s an issue that can’t be ignored. Here are the best of these documentaries:

Generation Wealth

This is one of my favorite movies about our societal fascination with wealth as well as the consumerism that results from it. Filmmaker Lauren Greenfield has done a number of projects about money and culture over the years. This is a culmination of that work. It’s an in-depth investigation into many aspects of what she’s studied before, touching on the intersection of money with body image and the beauty industry, workaholism, and, as Amazon Studios describes it in the YouTube trailer: “the human costs of capitalism, narcissism, and greed.”

Kids + Money

No mention of Generation Wealth should go without also highlighting one of Greenfield’s most powerful earlier works: Kids + Money. She interviews Los Angeles teens, ranging from the super-rich to those living in poverty, about the way that money affects their lives. It’s a short film, scarcely longer than half an hour. Yet, it is so powerful. Juxtaposing these different statements creates an overarching view of how money affects the trajectories of life for American kids.

Minimalism

This film is the antidote to Generation Wealth. It addresses similar issues of consumption. However, it does so through the lens of people who have chosen to forego that in favor of a minimalist lifestyle.

Freakonomics

If you’re interested in money’s impact on society, then you’ve probably already read this popular book. Have you seen the film? It applies economic theories to an examination of various aspects of our culture in a way that is accessible even if you don’t generally feel comfortable discussing economics.

Money Talks: Profits Over Patient Safety

If you are interested in learning more about the intersection of health care and money, then this is one of the money documentaries you’ll want to see. It digs into the various practices that pharmaceutical companies use to gain immense profits, potentially at the cost of individual health.

The Best Democracy Money Can Buy

If you’re fascinated by the role that money plays in 21st-century American politics, then you might want to watch this documentary. As described on the film’s website it is “a deep dive into the Republicans’ dark operation, Crosscheck” investigating “the billionaires behind this voting scam” including “top GOP donors, the billionaire known as “The Vulture” and the Koch brothers.” The film definitely comes from a particular perspective. In fact, they say on the site that the aim to “expose the darkest plans of the uber-rich to steal America’s democracy.” However, regardless of your political views, it shows some interesting information about the role money may play in elections today.

Documentaries About Individuals and Their Money

People and their money are so fascinating. Many of us love the opportunity to learn more about how very wealthy people acquire and spend their money. At the other extreme, we may be intrigued to see stories about people who live with as little as possible. Here are the best money documentaries about individuals:

James Simons: Money, Math, and Computers

James Simons is a mathematician and code-breaker. He’s also a billionaire investor, thanks in no small part to his unique use of algorithms to assist him in improving his investments. This documentary explores his career.

Unraveled

Yale and Harvard graduate and attorney Marc Dreier had a decent life. He wanted an even more lavish one. He ended up embezzling more than $400 million. This documentary is a discussion about the choices that lead him to that point, filmed as he awaits sentencing. This is one of those money documentaries that shows us the dark side of greed at an individual level.

Documentaries about Steve Jobs

There are so many different documentaries about the wealthy Apple founder. Watching several of them provides an interesting overview of his life. There’s no escaping that his money is a part of that life. Billion Dollar Hippy is probably the one that addresses that aspect most directly.

The Fabulous Life of Billion Dollar Wall Street Ballers

Remember The Lifestyles of the Rich and Famous? If you loved it, then this documentary is for you.

Born Rich

This slightly older (2003) documentary is almost a foreshadowing of the two aforementioned Greenfield films. It’s a look at the lives about one dozen heirs to a fortune. It’s also autobiographical; the documentarian is an heir to the Johnson and Johnson fortune. He’s exploring the experience of feeling silenced about his wealth. It’s a side of rich life we don’t often see examined. Notably, he followed this documentary with another called The One Percent.

Are there any money documentaries that I’ve missed and must check out? Let me know in the comments below!

Financial Psychology: Do You Have a Money Disorder?

May 22, 2019 By Kathryn Vercillo Leave a Comment

Let’s face it: most of us struggle with finances. Dealing with our money is a confusing thing. It’s often fraught with emotion. Even when we have significant knowledge about personal finance, sometimes we get overwhelmed by the reality of our money. Problems can crop up in so many ways. For example, we may be great at budgeting but find it challenging to talk to our family members about money. However, for some people, those challenges rise to the level of a money disorder.

What is a Money Disorder?

Dr. Brad Klontz has co-authored a book called “Mind Over Money: Overcoming the Money Disorders that Threaten Our Financial Health.” In this book, he explains that a money disorder is a destructive pattern of thoughts, emotions, and actions that relate to money. They are distorted beliefs about money. They undermine us, causing behavior that limits or sabotages us financially.

Financial Flashpoints May Cause Money Disorders

Klontz argues that “financial flashpoints” are at the root of these disorders. He says,

“Financial flashpoints are painful, distressing, and/or dramatic life events associated with money that are so emotionally powerful, they leave an imprint that lasts into adulthood.”

In some cases, the flashpoint may be a single traumatic event. For example, if your family experienced a sudden job loss that caused the financial crisis and left you homeless, then that might be your financial flashpoint. However, the flashpoint can also be a more persistent situation as well as one that’s subtler.

For example, if you grew up internalizing certain unhelpful messages about money (such as “money is the root of all evil”) then that could be your flashpoint. This understanding is similar to other types of trauma. For example, someone may develop PTSD because of a single violent event such as a rape while someone else may experience PTSD as a result of chronic insidious mental abuse.

Similarly, we can develop money disorders for different reasons. Furthermore, we may not immediately recognize their root cause.

Types of Money Disorders

In his book, Klontz outlines three broad types of money disorders. There are different types of specific problems that fall under each category.

1. Disorders of Worshipping Money

These types of money disorders related to people who have self-destructive behaviors related to earning and spending money. Specific money disorders in this category include:

Compulsive shopping
Gambling
Hoarding
Overspending
Workaholism

It’s important to note that there is some crossover between other mental health issues and money disorders. For example, hoarding may be more about an anxiety issue than a money disorder. Likewise, gambling may be more about addiction than specifically about money. A professional can help you work through these nuances.

2. Disorders of Avoiding Money

Some people obsess over money whereas others want to avoid it entirely. For example, one subcategory here is “financial denial.” If you’re the kind of person who never knows how much money you have in the bank or what you owe on loans then you might struggle with financial denial.

Financial rejection is another subcategory of avoidant money disorders. This is an emotional reaction toward acquiring money. If you feel guilt whenever you earn or save money then you might be dealing with this type of avoidance issue.

Chronic underspending and excessive aversion to financial risk are also disorders related to avoiding money.

3. Relational Money Disorders

Many of us struggle to connect with others when it comes to money. Think about it – how many of the fights in a marriage are about finances? However, this can rise to the level of a money disorder. Sub categories include:

Financial dependence, which means leaving our finances up to someone else instead of dealing with them ourselves
Financial enabling, such as when a parent continues supporting an adult child even though the parent can’t afford to do so. Notably, the financial dependent is often in a relationship with the financial enabler.
Financial incest, which relates to manipulation and emotional abuse related to finances (typically in a parent-child relationship)
Financial infidelity, which has to do with lying to your partner about spending

In other words, these problems aren’t just general fights about money. Many people disagree over money. Most of us struggle at least a little bit to talk properly about money. However, when it rises to the level of emotional abuse, lying, or destructive behavior to or from another person then it may be a money disorder.

Do You Have a Money Disorder?

Most of us have financial challenges in the “normal” range. However, “normal” is a tricky word. Just like with mental health, there’s not a “right” and “wrong” but rather there is a spectrum.

For example, each of us has experienced some kind of sadness or grief that in the moment could look a lot like depression. Then there are people who live with ongoing life-threatening depression. A large number of people live somewhere in the middle, dealing with shorter bouts of depression during their lifetime. These things are each different. They can’t be treated the same. However, they exist on a spectrum and we can all learn from the lessons at each part of the spectrum.

Similarly, some people have very serious money disorders. Some people are perfectly comfortable with all aspects of their finances. Most of us exist somewhere in the middle. We can all learn from the lessons at any part of the spectrum. That said, if you feel that you do truly have a money disorder, it’s important and okay to ask for help.

How to Get Help for a Money Disorder

There are therapists available who specialize in helping people who are struggling with financial issues. Whether or not you want to use the term “financial flashpoints” the experiences we’ve had with money in the past can definitely negatively shape our experiences with money in the present time. Working through your beliefs, fears, and history around money can help you improve not only your feelings about finances but the status of your wealth as well.

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How to Declutter If You Hate Marie Kondo

May 20, 2019 By Kathryn Vercillo Leave a Comment

Marie Kondo offers what is known as the Konmari method of decluttering your house, which seems to polarize people. She’s a best-selling author—evidence that many, many people love her decluttering methods. Ever since Netflix came out with her television show Tidying Up, though, articles seem to crop up everywhere with complaints about her methods. Her approach doesn’t work for everyone, but that’s okay. There are many different ways of decluttering your home. You don’t have to take her approach.

Understanding the Konmari Method

Personally, I like a lot of what Marie Kondo has to say. (I’m not a fan of the TV show, but I like her books.) I think that even if you don’t appreciate everything about her or want to use her method entirely, there are some great lessons she has to offer. In fact, I think that sometimes when people say they don’t like her method, they actually just haven’t dug into it well enough to understand it.

For example, Project Runway mentor Tim Gunn was recently quoted widely as being anti-Kondo. Marie Kondo is famous for saying that you should only keep objects that “spark joy.” Gunn was cited in numerous articles as saying something akin to, “Roget’s Thesaurus doesn’t spark joy, but I want to keep it.” I think this sweeping statement misses the point. I think at some level, if he’s using that thesaurus and he relates to in terms of how it improves his writing or reading, then it does spark joy.

What I Took Away From Marie Kondo’s Method

In any case, before we dig into alternatives to Marie Kondo, I’d like to say that these are the things I personally find useful in her method:

She practices gratitude. She appreciates each item, even if she doesn’t want to keep it. I think this is a good practice.
It’s helpful for me to take all like items out and look at them together. This doesn’t work for everyone. Some people find it overwhelming. However, I like to see exactly what I’m dealing with all in one spot.
I like the “spark joy” concept. It doesn’t always work for me. My medications don’t spark joy, but they’re a necessity. So I think it’s too simplified. But it’s a helpful method for deciding about things I’m unsure about keeping.
Some of Marie Kondo’s very specific organizing tips are helpful. She has cute methods for folding and storing clothing that I really like.

4 Other Helpful Approaches to Decluttering

Marie Kondo is the name on everyone’s lips right now. However, there are many different methods of decluttering. Some of them have names. Others are just tried-and-true methods. I think it’s worth it to review many different options to find what works for you. You don’t have to use one method singularly and in its entirety. You can pick and choose what works best for you. Here are four different approaches to consider:

1. Your House is a Container

Dana K. White is the author of the book Decluttering at the Speed of Life: Winning Your Never-Ending Battle with Stuff. My favorite takeaway from this book is the idea that every space in your home is a container. Each container can only hold what it holds. Every similar item should go in one container. You should start filling the container with the things you most want to keep.

For example, your bookcase is a container. It can only hold X amount of books. Every single book in the house should fit in this container. In other words, you shouldn’t have extra books on nightstands, in boxes, etc. Take all of the books out and start placing them in the container. You should put the ones you most want to keep in there first. If the container is full, and you want to add a book, then you need to remove one you like less.

Your container may be bigger or smaller. For example, if you have a whole library in your house, then it may contain multiple bookcases. The library is the container. In contrast, the container might be just one shelf. For example, all children’s books might go on on only that shelf. Each room is a container, each space in the room is a container, and that container might have smaller containers such as shelves or drawers.

2. The ClutterBug Organizing Style

Blogger and author Cassandra Aarssen has identified four different types of “ClutterBugs.” When you know your type, you gain a better understanding of the different things that matter to you in terms of organizing. Organizing and decluttering aren’t quite the same thing, but they go hand in hand. The four types of ClutterBugs, briefly, are:

Bee: Believes in a perfect organizing system and wants their items in sight.
Butterfly: Likes simple, quick organizing tools and wants their items in sight.
Cricket: Loves detailed organizing systems with very little clutter in sight.
Ladybug: Likes simple, quick organizing tools but wants items out of sight.

So, for example, it’s helpful for me to know that I like really simple organizing systems. If a system requires too much work or effort, I won’t bother. That means I’m either a butterfly or a ladybug. Since I like my items out of sight, I’m a ladybug. Therefore, decluttering is easier for me when I have simple systems for out-of-sight but accessible storage (such as bins inside closets).

3. Love It? Use It? Need It?

I’m not sure if this system has a name or if there’s a person attached to it. It’s something I heard about years and years ago and have always turned to when making decisions. Basically, for each item in the house, you ask yourself if you love, use, or need it? If it’s none of those three, then you get rid of it. It’s similar, in a sense, to Marie Kondo’s concept of “sparking joy,” but it has more leeway for other items. For example, Roget’s Thesaurus might not spark joy for Tim Gunn, but if he uses it, then he can still keep it. Likewise, I need my meds, so I keep them.

I find this helpful when decluttering non-physical items as well. For example, when I’m cleaning up my finances, I can turn to these questions. I need electricity. I use my Hulu account. As for “love,” well, I love certain magazine subscriptions but could get rid of others to save money.

4. Swedish Death Cleaning Method

Like the Marie Kondo method, the Swedish Death Cleaning method has grabbed attention in recent years. There’s a popular book about it by author Margareta Magnusson. The idea is that you approach decluttering with awareness that if you died, someone you love would have to deal with all of this stuff. Ultimately, it’s a minimalistic approach; you keep what is most meaningful and let go of the rest.

Admittedly, I haven’t tried this one, yet. However, I think it might work particularly well for my collection of writings and journals. If I die, someone will have to go through this. As a writer, I want more control over what’s kept, where it goes, etc. Therefore, I should start uncluttering that stuff now. It’s also a good reminder to properly store passwords, important financial information, etc.

Why Declutter At All?

I happen to love decluttering. When my space is cluttered, my mind feels cluttered. (Conversely, when I’m mentally cluttered, my space gets that way as well.) I find that my health is better when I declutter. However, not everyone feels that way. Some people love having a lot more stuff than I prefer. That’s okay. Find what works for you. With that in mind, though, there are some good reasons to declutter. It’s worth considering them and seeing if they hold true for you. For example:

If your home is so cluttered that you can’t find things, then you might spend money on duplicate items.
When clutter starts to make you feel smothered, it’s time to find a different way of doing things.
Physical clutter often shows up as disorganization in other areas of life, including finances and mental health.
You might have an urge to declutter but ignore it because it’s overwhelming.

How Mental Health Issues Impact Finances

May 16, 2019 By Kathryn Vercillo Leave a Comment

I have struggled with chronic, recurring major depression. So, I know firsthand that mental health issues can impact finances. In other words, mental health challenges not only cost us money, but they also affect how we deal with money. Different conditions can impact people’s saving and spending in their own unique ways. Awareness of those challenges can help us to manage our finances better, despite the challenges.

The Cost of Mental Health Issues

Before we delve into how each diagnosis affects a person’s experience of money, it’s worth noting that mental health issues, in general, affect people’s finances. Dealing with those challenges can be costly. In my case, I needed weekly therapy as well as medication to get through the worst of times. Whether or not you have health insurance, those costs can add up.

Moreover, I needed things that can’t quite be tallied up in exact dollars and cents. For example, I needed a strong support system, which meant that I needed to put in time with friends. Until I learned how to structure friend time around cheap and free events, I spent a decent amount of money on meals and movies together. I don’t regret the cost because it helped build the connections.

I also needed a healthier diet with a focus on nutritious foods. Again, I’ve found ways to cut those costs over time, but buying healthy foods started as an expensive adjustment. Nevertheless, it was wholly necessary for my mental health. In the beginning, I also needed regular yoga classes, because that was the only way I could get my body moving. These days I can do yoga at home and take walks for free, but in the worst periods of depression, I needed to pay for classes to motivate me to go.

Each person finds different things that they have to pay to have strong mental health. People with specific mental health challenges each need their unique combinations of treatments, resources, and quality-of-life purchases. For example, I don’t do well living with other people, so I have to find a way to afford to pay to live on my own. Other people are in the opposite boat; living with people saves them money but also helps their wellbeing. Each person is different, but there is no denying that there’s a financial cost to starting and maintaining mental health treatment.

How Depression Impacts Finances

Each mental health issue requires its own treatment. More than that, though, a specific issue can cause a person to deal with money in unique ways. It’s not just the cost of treatment; it’s that the condition affects one’s ability to earn, save, and spend money. Depression often particularly affects people’s ability to earn money. If you don’t feel like you can even get out of bed to take a shower, how are you going to drag yourself to a job? If you do manage that, how will you be productive once you are there? Many people with depression end up losing time at work or quitting work for a period of time all together because it’s just too hard.

How Unipolar Depression Impacts Finances

Depression isn’t just one condition. We’re learning more and more about this every day. For now, we at least understand that depression exists on a spectrum. At one end is ongoing major depression, also known as unipolar depression. At the other end is bipolar depression, previously called manic depression. There are many different forms of depression in the middle, each of which may impact finances in its own way.

When you think of a classic stereotype of depression, you’re thinking about unipolar depression. It’s characterized by a lack of interest in things and a constant “depressed” mood. Additional symptoms include changes in eating and sleeping (typically overeating and nighttime insomnia combined with daytime hypersomnia), inability to concentrate, and thoughts of suicide and death. Clearly, this kind of depression impacts your ability to earn money. If you don’t even want to live, how can you care about working? If you can’t concentrate or remember things, it’s pretty hard to be productive at work.

Often, people with depression will lose time at work. Not only does this impact earning, but it also impacts saving. I, personally, had to dig into my savings and get loans to be able to pay for my treatment and other needs. I was able to maintain part-time work, but I just wasn’t as productive as I am when I’m at my healthiest, and my depleted savings account reflected that at the time.

As for spending, depression didn’t drive me personally to change my spending much. However, it greatly impacted my emotions around spending. Depression eats away at self-esteem and provokes a lot of shame and mental rumination. I thought a lot about my spending, about my inability to earn well or save money, and most of my thoughts were self-shaming. Of course, that only worsens depression. It’s a bad cycle. I had to learn to be gentle with myself about money as part of my process of getting out of depression, which was the only way I could get back on track with earning and saving money.

How Bipolar Depression Impacts Finances

Bipolar depression is characterized by mania. There may be periods of depression, which can affect finances in the same way as unipolar depression does. However, there are also manic periods, during which a person might feel euphoric, giddy, or anxious. They may experience delusions of grandeur or get unrealistically excited about a major project.

Bipolar depression specifically affects spending. In manic phases, people may engage in impulsive, reckless behavior. Gambling, buying and using drugs, and binge shopping can all lead to financial ruin for people enmeshed in a manic period. Of course, when people are doing those things, it can also impact their job security, which could also affect earning money. Likewise, manic periods can cause problems in some housing situations, and changes in housing can have financial repercussions.

Some people don’t engage in obviously reckless behavior like this. However, their delusions of grandeur can lead to high spending. For example, someone who has a brilliant idea for a new invention might quit their job and take out a large loan to fund that idea. When the mania passes, the idea fades, and all of that spending was for naught.

People with both unipolar and bipolar depression may have disorganized finances. During depressive periods, it’s easy to become overwhelmed by money. Therefore, you might not want to deal with it at all. This can lead to failure to pay bills, using high-interest credit cards because you don’t want to deal with switching and other similar issues. In manic periods, you might just not care about that stuff, racking up bills without attending to paying them.

How Other Mental Health Issues Impact Finances

Depression is just one type of mental health issue. Each type affects finances in its own way. Some other examples include:

OCD can cause excess spending. For example, if you have contamination OCD (related to anxiety about germs), then you might use a bar of soap only once before replacing it with a new soap bar.
OCD can also lead to job loss. For example, if you have a detailed routine before leaving for work, then it can cause you to be late one time too many.
ADHD can lead to disorganization and procrastination with money matters.
Social anxiety sometimes causes spending on items or experiences to help a person feel like they “fit in.”
Research indicates that people with schizophrenia often have limited financial capacity, meaning that some may need assistance with money matters. One study found that 84% of people with schizophrenia say that their mental health issues cause problems with their finances.
People with hoarding disorders sometimes also have spending issues. In some cases, this is due to compulsive shopping. However, spending money on extra storage space is another big culprit.
People with substance abuse issues can have financial problems due to spending money on their addictions. In some cases, the lack of money can lead to theft and other financial crimes.
People with Narcissistic Personality Disorder may use money to control others.

Of course, these are all just examples of how mental health issues might impact finances. Everyone’s symptoms are different, as well as how they handle those symptoms. Someone with major depression, OCD, or another condition can still hold a successful high-powered job. Just because you have mental health issues doesn’t mean you’ll have financial challenges. Certainly, you can’t assume that someone else will have specific issues because of their condition. However, if you deal with mental health issues, it can be helpful to know what some of the common money issues might be so that you can keep an eye out for them in your own life.

What You Should Do Now to Prepare for Next Year’s Income Tax Return

May 14, 2019 By Kathryn Vercillo Leave a Comment

Many people were concerned that changes to the tax laws meant that they would get a lower tax refund than in years past. Luckily, most people found that not to be true. The 2019 average tax refund was comparable to past years for most people. That said, not everyone was happy with their refund.

So what should you do if your refund was smaller than you expected? Even if you got the same amount back this year as last year, it might be nice to get back more next year, right? Here are some things that you can start doing today to prepare for the maximum refund on your income tax return next year.

Update Your Form W4

If you work a regular job (meaning that you aren’t self-employed or trying to work “under the table”), then you have to fill out a Form w4. Most people don’t think twice about this piece of paper. They fill it out when they first get a job. They hand it to their new boss or HR department along with many other new hire forms. It goes on file. That’s the last time they bother with it.

However, that form is really important. It tells the company how much of your money to withhold for taxes. When the tax laws changed last year, people were encouraged to update these forms. The main reason was that you’re no longer allowed to claim a personal exemption, so if you had claimed one, then you needed to change it.

That said, a lot of people didn’t know that they needed to update Form W4. If you didn’t do it last year, then you might not have gotten as much tax money back as you expected this year. Even if your tax refund was about average, it’s worth it to update your Form W4.

Understanding Form W4

Form W4, also called the Employee’s Withholding Allowance Certificate, tells your employer how much money to take from each paycheck to send to the government. Then when tax time comes around, you either owe more or get some of that money back. Most people prefer to get money back, so they find that it’s better to pay in as much as possible throughout the year.

You use a worksheet to determine your number of allowances. The more allowances that you have, the less money gets taken from your paycheck. That means there’s less money going towards what you owe on your taxes. Therefore, if you want more money to go towards taxes, then you need to take fewer allowances.

Of course, you have to claim the correct number allowances to keep things legal. You don’t want to go lying on your tax forms. But there’s a way that you can adjust this. The form has a section that asks if you would like additional money withheld from your paycheck. Most people mark “no” because they want to get that money right away. However, if you want to get more back at tax time (or at least make sure that you don’t owe anything come tax time), then you should think more carefully. If you have a lot of allowances, then you might want to use this section to increase your withholding to benefit you when tax time rolls around.

If You Have Exempt Status

It’s also important to note that you might have previously marked yourself exempt on this form. If you didn’t owe any money in the tax year before you filled it out, then you could claim exemption status. If you don’t make very much money, then that’s okay. However, if no money gets withheld, then anything that you owe at tax time has to come out of your pocket. Therefore, if you can afford not to claim exemption, then you might want to rethink doing so. If you pay in throughout the year and then don’t actually owe taxes, you get that money back in the form of a tax refund.

Remember that the more they withhold, the better off you’ll be. Of course, you don’t want to go into debt as a result. The IRS has a tax withholding calculator that can help you figure out the best solution for your W4.

Other Ways to Improve Next Year’s Tax Refund Starting Today

Updating your W4 form is the best thing that you can do right now to make sure that you get the best possible tax refund next year. However, it’s not the only step that you can take. Here are some other things that you can do:

Give to Charity

The new tax laws affected charitable giving. The changes made it so that more people benefitted from a standard deduction. Therefore, they didn’t do itemized deductions, which meant their donations to charity didn’t help them tax-wise. However, the new laws actually had some little-recognized changes that benefit people who do want to itemize deductions and get credit for giving to charity.

First of all, you can now deduct cash contributions as long as they don’t exceed 60% of your income. Secondly, there is temporarily (through 2025) no limit on total itemized deductions. Therefore, you can max out your donations to charity. You give to a good cause, and you’ll benefit on your taxes. Of course, make sure you read the detailed rules on charitable giving.

Save the Maximum in Your IRA

Your IRA is there to help you when you retire. You need that money. Therefore, you should be setting it aside now regardless of the tax benefits. That said, though, there are benefits, and it’s worth paying attention to them. The more that you put in your IRA, the better off you’ll be. You don’t even have to do itemized deductions to get this benefit. You can take that money right off the top when filling out next year’s taxes. You might even qualify for additional credit, the Retirement Saver’s Credit, depending on your income. Therefore, it’s to your immediate as well as your future benefit to contribute as much as allowed to your IRA account this year.

Review Your Credits and Deductions

When you file your taxes, you get to claim certain credits and deductions. Credits are great because they give you money back directly on what you owe. Deductions reduce the amount of taxable income, so they aren’t as beneficial as credits, but they’re still helpful. Most people don’t bother to review these things until it’s time to file taxes. However, if you have more information, you can make smarter choices throughout the year.

Review all of the credits and deductions that you might be able to get next year. Make adjustments accordingly. For example, you might get a deduction for paying student loan interest. If your student loans are currently set so that you aren’t paying interest, you might benefit financially from changing that. It can feel like a hassle to review those things, but it can also save you a lot of money come tax time.

Similarly, you might decide to upgrade your house with energy-saving in mind. You’ll save money immediately on energy, even though you might have to spend some time to upgrade. Furthermore, you might get tax benefits.

Even if you don’t change anything that you do right now, reviewing your potential deductions and credits can remind you to keep track of everything. The more you have written down come tax time, the better off you’ll be when it comes to finding those benefits.

Why Was My Credit Card Application Denied?

May 13, 2019 By Kathryn Vercillo Leave a Comment

Every once in a while, I’ll fill out a new credit card application. Usually, I research first, and I only apply if I am reasonably certain that the company will approve my application. However, now and then, I have to deal with rejection. When I was younger, this would frustrate me immensely. Over time, though, I’ve learned to cope with credit card application rejection. I see it as a learning opportunity. Taken that way, it’s just information that can help me move forward. Here are some of the reasons your card application might have been denied.

Rejection Is Painful, But It’s Not the End of the World

Rejection of any kind feels painful. Yes, even credit card application rejection hurts a little bit. After all, the credit card company is basically telling you that you’re not trustworthy enough to deserve their loans. If you’ve worked hard to establish good credit, rejection can be particularly painful. That said, it’s really not the end of the world.

Believe me, I know that it can feel like it. For me, the worst times are when I’ve applied for a new credit card because I really need that money. I’m already in a state of fear, so the rejection hits me worse than ever. I feel bad about myself because I didn’t get the money. Plus I feel anxious because I don’t know where the money will come from. However, even though it feels terrible, it’s going to be okay.

So, the first thing that you should do after a credit card application rejection is just to breathe. Relax. Try to calm your mind. Center yourself. If you let yourself spin out of control, you’re not going to handle this as well as you should.

Use the Information to Take Action

When a company denies your credit card application, they provide you with a reason. These days, we usually apply online. We don’t usually get the rejection immediately. Instead, it comes in the form of a letter mailed to the house about a week later. Keep your eye out for the letter. It has important information that you need to be able to decide on your next steps. The rejection feels disempowering. However, the information in that letter actually empowers you to move forward.

Is the Rejection Valid?

That letter tells you the reason(s) that you received the rejection. The first thing that you need to do is to make sure that the reasons listed are accurate and valid. Sometimes credit card companies do get it wrong. Sometimes your credit report has incorrect information. Look at the list of reasons, pull your credit report, and make sure that the credit card company got it right.

For example, let’s say your rejection was because of delinquent payments. However, you know that you have never made a late payment. Pull your credit report and look for signs of late payment. If you see some that you know are wrong, then it’s time to update your credit report. You can file an appeal with the credit reporting agency for review. Once your information is up to date and correct, you can re-apply for a credit card.

The Rejection is Valid. Now What?

Of course, more often, the reasons listed for rejection are accurate. You really did have late payments, for example. Don’t worry; all is not lost. This is still valuable information that will help you get back on track with your finances. As you do, you’ll increase the likelihood of credit card application acceptance in the future. Here are some of the most common causes for application rejection and what you can do about them:

Low Credit Score

If you have a low credit score, you won’t qualify for certain credit cards. There are two things that you can do about this:

Work to improve your credit score.
Apply for a credit card within your approved score range.

If you need a new credit card immediately, then it’s worth doing the latter. In either case, it’s time to start working on the former. The better your credit score, the better options you’ll have in the future.

Low Income

Some credit cards only accept people with a minimum income. If you’ve been rejected because of low income, then it’s time to review that. If you do earn a decent amount of money, then you’ve probably just applied for a fancy credit card that’s out of your range. Apply for one that doesn’t require such high income. Alternatively, of course, you can work to increase your income. If you take on part-time work or extra hours this year, then you should be able to qualify for that card in the future.

Debt-to-Income Ratio

Sometimes it’s not that your income doesn’t cut it. Instead, it’s that your debt is too high, compared to the amount of income that you earn. Again, you can work to increase your income. Alternatively, or in conjunction with that, you’ll have to work to lower your debt. This is the kind of situation where it might make sense to consolidate your existing debt under a lower APR so that you can start paying it off more quickly.

If your debt-to-income ratio isn’t great, then it’s important to think carefully about whether or not you really need a new credit card. It may feel like you do since you want the money. However, remember that you’re already struggling to pay down existing debt. Taking on more credit card debt might not even make sense at this time. Instead, it could be time to rework your budget.

Note that credit card companies might look at all of your loan debt, not just your credit card debt when making these decisions. Therefore, if you have student loans, mortgages, auto loans, and other types of debt, these could be what’s affecting your ability to get a credit card.

High Balances

Maybe you have credit cards, you pay the minimum balance on time, and you earn enough to cover repayment. However, for one reason or another, you’re running high balances on your cards. In other words, one or more cards is close to its credit limit. That’s a red flag for credit card companies. If you find out from your rejection letter that this was the cause for rejection, then it’s time to start paying down that debt. If you can get the balance down below 30% of the credit limit on each card, then you are more likely to qualify for a credit card next time that you apply.

No matter what caused the rejection, it’s information that you can use to improve your chances of getting a credit card in the future. Take the long view but begin working today to remedy the problems.