Valentine’s Day week was actually quite interesting for me. I learned a few things, including you should not leave roses out if you have a young kitten around (she destroyed an entire set). I also learned that people really love complaining about the price of bank services, as I learned when I cut loose on TD about their jacking up their fees for Safety Deposit Boxes and seeing the reaction from my readers (wow, didn’t know you folks were that passionate about your financial safe places). Maybe everyone has porno movies or dark secrets hiding in those boxes (as Hollywood seems to imply).
We also seem to be going into another European funk, with Greece spiraling further down the financial whirlpool. Let’s hope this does not keep up all year.
On my twitter feed I found some of my favorite “oldie but goody” posts, including:
I got an interesting comment to my “bitching” about the jump in service charge on the TD Safety Deposit Box. It got me thinking about another great trick the banks have devised. That is the offering of “free banking” services if you carry a minimum balance in your bank account.
The comment almost seems from a TD employee (but that is only my guess). The commentary points out that if I were smart enough, I’d carry the minimum balance ($5000). Then it would be:
“… saving all these fees which would be similar to making the money in an investment….”
To me, that is a staggeringly exciting leap of faith. Pinning down $5000 a year in an account with a rate of return of 0.00% annually, is a good idea? Is this an excellent investment because I have saved $60?
The comment’s author is mistaken. It isn’t listed on the website that the Safety Deposit Box Fee is waived for the Infinity account (it is for the Plan60 account, and there was another one listed, which I can’t remember). I will be going into the bank next week and asking if this fee can be waived for the year. It never hurts to ask.
Even more interesting is that I am not complaining about the Fee for the Safety Deposit Box (I Safety Deposit Boxes are a good idea if you want to keep your stuff safe remember The Safety Deposit Box: Our Friend ), I was complaining about the price hike, which was astounding. Yes, the fees for losing a key and getting your box drilled are penalties, which are your fault (much like overdraft fees), but jumping the cost by 42% is a pretty big jump.
The question I leave you, is this: Is leaving a sizeable minimum balance in an account to avoid banking fees really like investing that money? My opinion is no.
Of course, there are plenty of folks that offer free banking
Remember that your safe deposit box is no longer a valid carrying fee.
Yup, whilst doing the Great American Novel also known as my tax returns for my Family I went over last year’s returns to see what I had forgotten and sure enough from Line 221 leading to Schedule 4 in my return, I had forgotten to declare my Safety Deposit Box (again). I do this every year but this is why it is important to review your previous returns to see if you are forgetting things.
This may not seem that important but each of these small things really do add up in terms of money back from your taxes. What other things have I almost forgotten over the years?
Active child tax credits (and this year, if you are an Ontario resident, you get some there too).
Charitable donations, in general. Many of these get forgotten and if there isn’t a receipt (or you were given the receipt last April, and you forgot to file it), you can lose out on some easy refund money.
Moving Expenses, if you are a new grad and you moved to somewhere new to get a job, that is part of your taxes, and you should look into this. I forgot this on my first taxes (but back then we did it with pencils and forms, so I can be forgiven).
Rental costs if you are a student (or if you rent), remember that could add up depending on how much your income might be.
Actually filing your return!
Yup, I know more than a few folks, who have not filed their tax returns for the past few years. I am astounded that these folks haven’t, since they most likely are owed money by the government.
Don’t forget some of these easy credits or deductions and for gods sake, please file a return!
What is interesting, is when you write for long enough, tax laws change. Here is a perfect example, both of these tax credits are now gone. It may be tax time but you can’t claim them, however I leave them here for historical purposes. Maybe they will come back one day?
Child Tax Fitness Credit
Here is one to remember for those of us who either live in Hockey Arenas or Gymnasiums (or soccer fields) most of our days. The Child Fitness Tax Credit allows you to claim up to $500 per year for each child under 16 who is in an accredited fitness program (read the rules and regulations carefully here, evidently there already have been folks claiming that have been told their claim is incorrect).
One important point for me this year is the statement (taken from the web site):
The children’s fitness tax credit lets parents claim up to $500 per year for eligible fitness expenses paid for each child who is under 16 years of age at the beginning of the year in which the expenses are paid.
Since one of my daughters did turn 16 last year but AFTER January 1st, I can still claim her fitness credit for one more year (and that is nothing to ignore). I thought I had lost this for my daughter, but after careful checking of the web site, I am still good for one more year.
For most of us gifted with kids who are on teams, $500 is really only the start of expenses for a lot of sports, but it is not to be ignored either.
Fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund),including safety deposit box charges,
There it is in black and white, so make sure you claim it. What if you have a home safe? I have no idea where that might fit in this, but I do know that Safety Deposit boxes are covered. Anyone care to comment on whether they have claimed a home safe for this same deduction?
Security of your financial information is essential, for many reasons. Identity theft is the main issue, in that if someone can get enough information to re-create your identity in some fashion and get credit cards (or worse) in your name, it will create huge issues for you.
Fraud is rampant in our society, and you must be diligent to ensure you are not a victim of this crime.
The Shredder , as we spoke about on Tuesday is your security weapon for your printed records. Any old financial records must be destroyed (after they are no longer needed, please don’t just destroy records without knowing whether you need them any more), or stored in a safe place until they are no longer needed. The safest place I can think of for saving important financial documents would be either a Safety Deposit Box or a home safe (or strong box). This will secure your printed information.
What kind of information?
Old Tax Forms, with receipts and associated responses from the government
An inventory of your house with it’s estimated value (don’t store that in the house)
Birth certificates and such
Receipts from Credit Cards, Property Tax Payments, and such (I think the rule of thumb is at least 3 years of that data).
First whatever computer you are running your Financial Software tools on, must be secured with a password of some kind, that is common sense.
Next if the computer is connected to the Internet (which it most likely is), then it must also have Anti-Virus and Anti-Spy Software, or your data can be corrupted, or worse still your machine can be compromised by:
Trojan Horse software that simply replaces parts of your system with it’s own versions which will look for information on your computer.
Key Capture software that will simply steal your on line banking password, by logging all the keystrokes you type on your system and sending them to another computer
Yup, this can happen to you, and you need to protect your finances from this kind of attack. There are many others, I am just highlighting the major ones here (there are many, many more attacks out there).
If someone can break into your home network, they can get onto your home computers and steal information directly from your system. There are some easy fixes to stop this (or at least slow it down).
If you have a home network and have a home router, please change the password on the router from the factory default and turn off remote administration! You may as well leave your front door open if you have this turned on, and I can’t tell you how many configurations I have run into that are set up this way.
Linksys, has changed their default configuration to FORCE people to change the default password, but on older routers, this is not the case. If you have a router and don’t know what I am talking about, you need to get someone in to set up your network security.
If you have a wireless home network, TURN ON WAP or some other wireless security, and turn off SSID broadcast. Look up War Driving and see what can happen to unsecured wireless home network configurations.
I had an old router who’s security was compromised, and I ended up selling Herbal Viagra for a while (I didn’t make any money on the deal, and I had my Internet access turned off for a week, and only got it back because I plead stupidity about how I had not configured security on my system).
Again, I am only highlighting a few areas, if you aren’t sure, consult the Internet or call someone who knows about this kind of stuff, don’t just hope it doesn’t happen to you.
Should you have old floppies around the house and you do not know what is on them, run a powerful magnet over them, or destroy them (with a hammer). You are a hoarder if you do.
If you have been doing backups on to CD’s or DVD’s and you do not need these backups any more, destroy the media (my shredder actually chews up CD’s and DVD’s, so that is where they go).
Your old thumb drives will need to be demolished as well (i.e. hammered to bits).
This media if just thrown out, is insecure and can easily be used to get information about you (especially if they have been used to back up your financial data).
The one computer point people don’t think of is disposal of your computer. Your computer has a hard drive in it, if you simply throw the computer out, the hard disk has all of that information on it about your finances, and whoever picks up the computer now has this information.
The best thing to do with an old computer is the following, remove the hard drive from the system, and physically destroy it. Either take it apart and smash the platters, go at it with a sledge hammer or something of the like.
If you want to give this computer to someone or donate it, you must find a shop that will WIPE the disk clean or buy software that will do that. This software will overwrite the data on the disks over and over with varying patterns until the only people who might be able to read it is the CIA or CSIS, you can then donate your computer (but I won’t, I will destroy the hard drive by hand, I don’t trust any of this stuff).
Never, ever give a computer away with the hard disk intact, if you have used it for any financial work at all. Even if all you did was order some stuff from E-bay on line, wipe it clean.
Am I Being Paranoid?
You are only paranoid if everyone is not out to get you (hey I am now the Big Paranoid Cajun Man), but seriously, securing your financial data both hard copy and soft copies and the associated software is the most important thing you can do for yourself, and your family.
Image courtesy of Stuart Miles, / FreeDigitalPhotos.net