There’s no summer break when it comes to monitoring your money. Rising fees, changing investment risks and overlooked opportunities might warrant a fresh look at your financial situation.
Here are some issues to review.
Check up on unused gift cards
It’s easy to lose track of unused gift cards, vouchers or store credits. Nearly half of U.S. adults, 47%, said they have at least one of the above, according to a recent survey by Bankrate.com. Among those with unused gift cards, the average amount is a sizable $187 per person.
Consumers enjoy important protections with gift cards. For example, they can’t expire for at least five years after the activation date. There are also limitations on fees. “The card issuer cannot charge a dormancy or inactivity fee on a gift card unless there has been no activity for one year and the card clearly states its policy toward that fee,” said the Federal Deposit Insurance Corp.
Still, gift cards can get stolen or lost, so it’s smart to use them promptly or at least keep track of what you have.
Remember, also, that scammers often request payment in gift cards, demanding that you provide the codes and personal identification numbers listed on the back side. “No business or government agency will ask you to make payments with gift cards, so if you are contacted in this manner, it is most likely a scam,” the FDIC cautioned.
Check up on deposit insurance
If you have bank accounts, make sure your money is covered by federal deposit insurance. Most consumers don’t need to worry much about this on conventional bank or credit union accounts, which typically are insured up to $250,000. But this can arise as an issue with money stored on payment apps such as PayPal, Venmo and Cash App, warns the Consumer Financial Protection Bureau.
Money sitting in payment-app accounts often lack deposit insurance, the agency added, and user agreements often don’t specify where the funds are held, whether or not they are insured and what would happen if the company holding the money were to fail.
“Popular digital-payment apps are increasingly used as substitutes for a traditional bank or credit union account but lack the same protections to ensure that funds are safe,” said CFPB Director Rohit Chopra in a prepared statement.
More than three in four American adults have used payment apps, finding them a fast and convenient way to pay friends, retailers, service providers and others. They are especially popular among younger adults, the agency said.
Check up on insurance policies
It’s a good idea to evaluate your auto and home insurance policies from time to time, especially when costs are rising like now.
Premiums for auto coverage have risen about 15.5% over roughly the past year, said J.D. Power. This reflects more expensive vehicles, more costly repairs, more drivers resuming their workday commutes and other factors. Higher premiums have led to the largest decrease in customer satisfaction with insurance coverage in the past 20 years, J.D. Power reported.
In addition to shopping around and possibly switching insurers, there are other ways to shave premiums. These include bundling home and auto policies to get a discount and allowing your insurer to monitor your driving behavior with telematics devices installed on your vehicle.
Home insurance premiums also have risen, up 8% per policy over the past year to a national average of $1,902, according to a study by QuoteWizard by Lending Tree. The price hikes are more pronounced in states including Arizona (up 15% to an average of $1,608). Factors contributing to the increases include more expensive homes and costlier repairs and building materials.
Check up on your investments
Now that the stock market is humming again, that makes it easier for investors to overlook — or choose to ignore — emerging risks in their portfolios. But a rare recent rebalancing of the technology-dominated Nasdaq 100 index is a reminder that it’s usually best not to let big stocks get out of hand.
The rebalancing on July 24 reduced the weighting or importance of seven giant companies to reduce their dominance in the index and increase the presence of smaller stocks, Nasdaq said. These seven stocks still have a combined weighting of around 40% in the index, though that’s down from nearly 50% previously. It’s not a huge change, even for investors owning funds pegged to the Nasdaq 100, but it serves as a reminder that, when a few stocks are crowding others out, a portfolio becomes less diversified and thus more risky.
Big tech stocks have enjoyed a huge run lately, driven by excitement over artificial intelligence and more. The Magnificent Seven are Amazon, Apple, Alphabet (Google), Meta Platforms (Facebook), Microsoft, Nvidia and Tesla. These giants could continue to outperform for months or years to come, but investors should recognize the risks.
Hence the wisdom of looking under the hood of your portfolio, and examining the top holdings in various mutual funds and exchange-traded funds, if you haven’t done so in a while.
Reach the writer at russ.wiles@arizonarepublic.com.
