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Apache is functioning normally

May 29, 2023 by Brett Tams

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It may not come as a big surprise since we all know that Mint users are financially savvy – but saving for a big purchase and paying off debt reign supreme for Mint users when it comes to their 2015 financial resolutions!

In a recent Mint survey, millennials revealed that their top financial stressor included debt (think student loans), saving for retirement, and over spending – while respondents age 36+ were most stressed out by not having enough savings for the future (you’re not alone)!

We hope the takeaways from the Mint user survey below will help encourage you to be good with your money  and keep working towards your 2015 financial goals all year long!

Mint.com 2015 Survey Results:

In 2015, my primary financial goal is:

  • Saving for a big purchase (house, car, etc.): 35%
  • Paying off debt: 34%
    • Paying off student loans – 14.16%
    • Paying off credit card debt – 19.06%
    • Saving for an emergency fund – 22.20%
    • Saving for a vacation – 9.62%

How much do I save?

  • 93% of respondents are saving at least once a year with 83% of all respondents putting money away every paycheck

What do I spend my money on?

  • 59% of all respondents by far the biggest expenditure every month was housing
  • 28% of respondents said their highest expenditure is food and beverage

What I find most stressful about finances:

  • The overall trend of financial stressors among respondents age 36+ was not having enough money or enough savings for the future
    • Interesting, a number of respondents over the age of 36 are still paying off student loan debt
    • Among millennials – the responses seem to vary including not making enough money, debt (including student loans), saving for retirement, over spending, and not having enough money  to afford the things they want

Do the results above ring true for you? Let us know in the comments below!

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Apache is functioning normally

May 9, 2023 by Brett Tams

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Do you remember what it’s like being a kid with no financial responsibilities? Neither do I. It seems like we have been adulting forever. If life insurance isn’t quintessential adulthood, I don’t know what is. As you are reading and researching life insurance, one of the biggest questions you ask yourself is “Do I even need life insurance?”

Ask yourself this question: Does someone rely on me financially? If the answer is yes, then you likely need life insurance. Let’s discuss a few different types of people and their need for life insurance.

Single? You probably don’t need it.

If you are single and have no children, you probably don’t need life insurance. However, if you’re an ultra-planner or want to have a family sooner rather than later, locking in those low rates while you’re young and healthy can be a wise move.

Here are a few situations in which buying life insurance would be recommended even if you’re single:

  • Co-signed loans

Maybe your grandparents are co-signers on your private student loans or your parents co-signed on your mortgage. If you die before the balance is paid, the creditors can go after your co-signers. Life insurance can pay for these debts.

  • Caring for relatives

If you are caring for siblings or aging relatives you should consider life insurance to ensure that your loved ones are still provided for even if you are no longer around.

Have dependent children? You definitely need it.

Those with children have the greatest need for life insurance. Children rely on you for food, clothing, shelter, medicine, and everything else. If you die, life insurance can continue to fund these things, and it can also pay for hopes and dreams such as college tuition or a wedding.

Let’s take a closer look at specific parental situations:

  • Dual income families

If your household has two incomes contributing to standard of living, the sudden loss of a parent can cause financial upheaval if there is no life insurance to replace the lost income. One parent is now responsible to provide what two incomes previously did. For example, the proceeds from a life insurance policy can pay off the mortgage ensuring the children do not have to be uprooted from their home or school district.

  • Single parents

Let’s face it, the loss of a single parent to a child would be devastating. When married couples purchase life insurance, they often plan with the possibility that one spouse will remain to care for the children. Single parents do not have this luxury and absolutely need life insurance.

  • Stay-at-home parents

When you think of life insurance, you may only think a breadwinner needs coverage and not a stay-at-home parent – this could not be further from the truth. Imagine everything a stay-at-home parent does: babysits, cleans, cooks, transports, grocery shops… the list goes on. According to Salary.com, a stay-at-home mom is worth approximately $112,962. If the stay-at-home parent were to die unexpectedly, life insurance can pay for someone to help with these tasks.

Married? You most likely need it.

You don’t need to have children to rely on your significant other’s income. You’re building a life together and doing so requires money. You are likely both contributing to rent or a mortgage, car payments, utilities, and credit card bills. What happens if one of you were to die prematurely? The death benefit from a term life insurance policy can help pay for those expenses and cover the cost of a funeral.

It’s not uncommon today for couples to be in a committed relationship but postpone marriage. While it’s a little easier to own life insurance on your significant other if you are married, non-married couples can still purchase life insurance on one another as long as they can prove insurable interest.

Insurable interest is when a person can expect to suffer financial loss upon the death of another specific person. Having both names on a mortgage loan, both named on a lease, or owning a business together are just a few examples of how you can prove insurable interest.

The two types of life insurance

There are two main types of life insurance: term life insurance and permanent life insurance.

Term insurance:

  • Basic, inexpensive life insurance
  • Temporary – lasts a certain length of time (typically 10, 20, or 30 years)
  • Ideal for most people

Permanent insurance:

  •  Lasts a lifetime
  • Accumulates cash value
  • Much more costly than term insurance
  • Not necessary for most people

For most individuals, term life insurance is suitable coverage. It is designed to last only during the years in which you have the greatest need for it. Permanent life insurance can be beneficial for more complicated situations such as managing wealth for large estates.

The key benefits

Buying life insurance means you hand over some of your hard earned dollars to an insurance company – so what do you get in return?

  • Your life insurance policy will provide significant funds to your loved ones when they need it most, allowing them to grieve without the added financial stress.
  • The death benefit is typically considerably greater than the premiums you paid.
  • The proceeds are generally safe from creditors. Even if you die with debt, creditors cannot go after the life insurance proceeds paid.
  • Life insurance proceeds are typically not taxed by the federal government.
  • Peace of mind in knowing your loved ones will be financially protected if you are taken from them too soon.

Natasha Cornelius is the content manager and editor for Quotacy. She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country. Connect with her on LinkedIn.

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Apache is functioning normally

May 9, 2023 by Brett Tams

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One of the rights afforded to us under the Fair Credit Reporting Act is the ability to challenge information on our credit reports with which we do not agree. I addressed several methods of disputing credit entries in this Mint article.

The credit dispute process is free and normally takes less than a month. There is some confusion, however, about the impact a credit dispute can have on your credit scores. In this post, we’ll cover what happens when you dispute a credit report, how a credit dispute impacts your credit score, what is disputable, and how you can do so.

When Can I Dispute a Credit Report?

When you file a dispute with the credit reporting agencies, they are required by the Fair Credit Reporting Act to show that the item is “in dispute.” They accomplish this by placing the code “XB” on the offensive credit entry.

The XB code is what’s referred to in my world as a “Compliance Condition Code.” When it’s placed in your credit report, it reads as “Consumer disputes, investigation in process” or some derivative of that wording.

Essentially, it means that the credit bureaus received your dispute and are actively investigating the information.

The Impact of “XB”

When the XB code is present on an account, a public record, or a collection, credit scoring systems treat it differently than they would if the account was not actively in dispute.

This is where the confusion comes from. The FICO score will not allow an item that is actively being disputed to harm your score. How does it accomplish this?

FICO will not consider an item with the XB code present for either its Payment History or Debt related measurements. So, if you have a credit card account with late payments and you’re disputing those late payments, the FICO score will choose not to consider those late payments. And, if you have a credit card account with a large balance and you’re disputing the balance, the FICO score will not consider the balance.

So, does disputing a credit report hurt your score? No. The act of disputing items on your credit report does not hurt your score. However, the outcome of the dispute could cause your score to adjust. If the “negative” item is verified to be correct, for example, your score might take a dip. Note: this dip is not because the dispute was proven inaccurate, but because the XB code is taken off. Alternatively, if the disputed item is proven to be inaccurate, this could raise your credit score.

The fact that the FICO score is temporarily ignoring these items can cause your scores to be higher. Having said that, the score improvement is temporary and can’t be used to “game” the system.

What happens if the disputed item is found to be accurate?

If the item has been verified as accurate, then the credit bureaus are no longer investigating it. That means the credit bureaus will remove the “in dispute” label by removing the XB code.

Once the XB code is gone, then the item is fair game in the eyes of FICO because it has been verified and is, arguably, accurate.

This process isn’t news, and lenders also know about it, which is why you can’t just go and dispute everything that’s bad on your credit reports, have your FICO scores shoot through the roof, and then go apply for a loan.

Most lenders, especially mortgage lenders, require that all items DO NOT have the “in dispute” label before they process an application to closing. They realize the score that has been calculated is likely not the consumer’s most accurate score because the model is ignoring certain aspects of the credit report.

And FICO isn’t the only scoring system that has this specialized treatment of items that are currently being investigated. If you check your credit score using the VantageScore model, you may run into a similar situation.

According to Sarah Davies, Vice President of Analytics and Product Management at VantageScore Solutions, “While an account is documented as ‘Account information disputed by consumer under the Fair Credit Reporting Act (XB)’, it is temporarily excluded from consideration by the VantageScore model.”

What if the item is still being disputed?

If you were not successful getting the offensive credit entry removed or changed, then you can still have it shown as being “in dispute” for as long as it remains on your credit reports. But, that is not the same as an item that’s in dispute AND being investigated.

That is to say, lenders will still likely consider the item when evaluating your credit score since the XB code has been removed.

If you still disagree with an item you can have a label added to your credit reports showing as much. But, that’s not going to cause the score to reflect that label for Payment History and Debt measurements.

How to Dispute a Charge on Your Credit Report

If, after reviewing what happens when you dispute a credit report, you decide it could be the right course of action for you, here’s how you can get the ball rolling.

Step One: Obtain a recent copy of your credit report

In order to dispute an item on your credit report, you’ll need to prove to the powers that be that your credit report is inaccurate. To do so, you’ll want to have a copy of your credit report handy. Consumers are entitled to one free credit report each year from each of the three main credit reporting agencies, which you can access through AnnualCreditReport.com. Or if you’re a Mint user, you can easily view your credit score in the Mint app whenever you please!

Once you’ve got your credit report in front of you, pull out that red pen of yours and notate any items on the report that are inaccurate or with which you do not agree.

reasons to dispute items on credit report to help you decide if it’s worth a shot:

  • There is incorrect personal information on your credit report, such as your name or Social Security Number
  • There is a negative item that is beyond the statute of limitations for reporting
  • The report shows that you carry a debt balance which you have already settled
  • There is duplicate information shown on your credit report
  • You have a duplicate credit report or mixed information for yourself and another person
  • There are fraudulent items on your report, like a new credit card or loan that you did not open or apply for

Step Three: Decide which credit dispute method to use

File a report with the credit bureau: This is the most common method consumers use to dispute credit reports. Each of the credit reporting bureaus—Experian, Equifax, and TransUnion—have dispute forms on their website which you can fill out. 

Here’s where you can find them:

If the error appears across each of the credit bureaus’ reports, you’ll need to file a separate report for each. Each of the credit dispute processes vary slightly, but in general, you’ll need to include the dispute form with an explanation of the error(s) as well as a copy of your report with the same error(s) notated.

Report the error to the furnisher: Another method you can use to dispute a debt on your credit report is to go directly to the source—the lender, bank, credit card company, or collection agency that misreported information. When you dispute the item, the furnisher will then be required to report the dispute to each of the credit bureaus, making your job a little easier.

Takeaways

To wrap up, let’s review a few of the key takeaways we covered.

  • Does disputing a credit report hurt your credit score? No, credit disputes do not hurt your credit score. When an item on your report is being investigated, the credit bureaus will notate this on your credit report using “XB” code which signals to lenders that the item is under review and should not be considered in their evaluation.
  • Depending on the outcome of your dispute, your credit score may be adjusted to reflect the updated information. If a negative item is removed, the dispute could improve your credit score.
  • To dispute an item on your credit report, follow these steps:
    • Get a copy of your credit report
    • Decide whether or not you should dispute the item
    • File a dispute with the furnisher or the three major credit bureaus with a dispute form and a copy of your credit report

For more information of credit disputes, check out this blog to learn how to win a credit dispute.

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Apache is functioning normally

May 8, 2023 by Brett Tams

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Understanding your policy’s death benefit.

Q: How long does it take my beneficiaries to get my life insurance death benefit?

Once the death benefit claim form and a copy of the death certificate have been received by the carrier, beneficiaries typically receive the death benefit check in two weeks.

However, if the insured dies within the contest-ability period (which is typically two years) the death benefit may take longer because the life insurance company has the option to investigate the claim if they choose do to so.

Q: How do I know my beneficiaries will get paid the death benefit?

Life insurance companies are not in the business to rip people off.  As long as your policy is inforce at the time of your death (in other words, the premiums were paid up-to-date) your beneficiaries will receive the death benefit payout.  There are only a few exceptions to this, which we discuss in detail below.

Q: Are there any situations in which my life insurance policy won’t pay out?

There are three instances in which a life insurance company can choose to deny or reduce a term life insurance policy’s death benefit.

One: Contest-ability Period

Life insurance policies include what is called an Incontestability Clause.  This clause states that the life insurance company has a specific period of time (typically two years) to dispute the validity of the insured’s statements made on an application.  So, if you die within the contest-ability period, the life insurance company has the right to investigate the details of your medical history to ensure you did not misrepresent yourself on the application.

For example, stating that you did not smoke cigarettes when, in fact, you did up until the day you died.  In a situation like this, insurance companies have the right to withhold some of the death benefit from your beneficiaries or even deny the claim altogether.

Two: Suicide Clause

Another situation in which the life insurance company has the right to deny a death benefit is if the insured commits suicide within a certain period of time, again typically within two years.  In this situation, however, the life insurance company will return all premiums that have been paid to date to the family.

Three: Homicide

The last situation in which an insurance company may not pay a death benefit is if the insured was murdered.  If the insured was murdered, the life insurance company will typically call the police department involved and inquire as to whether or not the beneficiary of the policy is a suspect.

If the beneficiary is a suspect, the life insurance company will hold payment until the charges are dropped or the beneficiary is deemed not guilty of the crime.

Q: Will my term life insurance death benefit payout be taxed?

Term life insurance is the least complicated type of life insurance and in most cases your beneficiaries will not have to pay federal or state income taxes on the death benefit they receive.  Since the policy premiums are paid using after-tax dollars, Uncle Sam already got his cut.

There are two main exceptions to this rule:

  • Estate taxes
  • Gift taxes

If you own your own policy, the death benefit proceeds become part of your taxable estate.  If your estate exceeds the exclusion amount, which is over $5 million dollars, it can get taxed.  For most people, this isn’t an issue.

The second exception is what is known as “The Goodman Triangle.”  If the policy owner, insured, and beneficiary are three different people, the death benefit could count as a taxable gift to the beneficiary.

Q: How can I be sure my policy’s life insurance carrier will still be around when I die?

All major life insurance companies have financial strength ratings.  There are multiple agencies each with their own rating scales and standards that assess the long-term financial stability of these insurance companies.  These ratings typically follow the school-like A through F scale.  The higher the rating, the more stable the company is and the more likely the company will be able to pay future claims.

When you are looking to purchase life insurance, whatever means you are using to buy it through should tell you the insurance company’s rating.  Any company with an A rating or better is considered financially stable and you should not worry about any future claims not being paid out.

Natasha Cornelius is the content manager and editor for Quotacy.  She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014.  A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country.  Connect with her on LinkedIn.

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Apache is functioning normally

May 7, 2023 by Brett Tams

Replacing your policy

I currently have a life insurance policy – could I get a better price elsewhere?

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The short answer is yes – it is possible to get a better price. The long answer is that it depends on quite a few factors, and there’s no guarantee that your price will drop with a second application.

One of the biggest things to keep in mind is your age. The older you are, the higher your chances of dying naturally, which will slowly increase the baseline price of a policy. Applying for a policy at 45 will be more expensive than applying at 35, all other things being equal.

When in doubt, work with a life insurance agency. They’ll be able to give you some insight into how much your price could drop if you switch to another carrier.

If my health has improved since I got my last policy, can I reapply for a better price?

Depending on how your health has improved and the amount of time that has passed since your previous application, you could see significant price drops.

For example, smoking is one of the priciest things that you can do with regard to a life insurance application, and typically, you need to have kicked the habit at least one year ago before life insurance carriers are willing to look past your tobacco history.

My last agent sold me a policy from the company he worked for. Can I get a better price if I shop around?

If your agent was captive, meaning they only represented one insurance company, the first thing that you should do is get a quote from an independent source that represents many. Because carriers jockey for position to undercut their competitors’ prices in certain situations, it’s possible that another carrier beats your current carrier in price.

Sometimes the difference in price will be pretty obvious from the get-go. If you can’t find a dramatic difference in price, it’s often wise to talk to an independent agent or online company and tell them the facts about your case. An experienced agency can help point you in the right direction by shopping your case around for preliminary price checks with various carriers.

Natasha Cornelius is the content manager and editor for Quotacy. She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country. Connect with her on LinkedIn.

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Apache is functioning normally

May 6, 2023 by Brett Tams

Reviewing your policy

How often should I review my policy?

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We suggest reviewing your life insurance policy once per year to make sure you have enough coverage.  Most importantly, you should review it anytime your life and circumstances change.

What should I look for during my policy review?

When reviewing your policy you should look for anything that may need updating. Examples include your name, address, phone number, billing information, and beneficiary.

When should I update my beneficiaries?

Make sure you keep your beneficiary designations up to date.  There are certain circumstances that will warrant a beneficiary change. These include:

  • Marriage or divorce
  • The birth or adoption of a child
  • Your designated beneficiary passes away
  • You are now caring for your elderly parents

When should I apply for a new policy for more coverage?

Just as life is ever changing, so are your life insurance needs.  You may have purchased a small insurance policy when you were fresh out of college to cover your student loans.  A few years have passed and now your lifestyle has changed.  Here are some common circumstances in which you may want to increase your life insurance coverage:

  • Starting (or adding to) your family
  • Purchasing a new home
  • Job promotion with higher income

Natasha Cornelius is the content manager and editor for Quotacy.  She has worked in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014.  A long-time Mint user, Natasha lives in Bozeman, Montana where she loves to garden, DIY anything she can, and explore beautiful Big Sky country.  Connect with her on LinkedIn.

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Apache is functioning normally

May 5, 2023 by Brett Tams

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Aaron Hahn vividly remembers the moment he decided to crush his debt.

It happened in March, while visiting his retired aunt and uncle in Arizona.

Their home, with a lush, sprawling golf course as its backdrop, symbolized to him the power of hard work and consistent savings. Not to mention, this was their vacation home, a place where his “snowbird” aunt and uncle enjoyed visiting during the winter months.

“It was my ‘aha’ moment,” says Hahn, who, at the time, had about $42,000 in debt spread across student loans, a car loan and credit cards.  “I was like, ‘O.M.G. I want this life.’ I want to do what they’re doing. I want to be financially independent.”

Hahn had also just celebrated his 34th birthday, which served as another wake-up call. “It was a confluence of events…I realized that I just wasn’t taking care of money like I should be, like a grown-ass man,” says Hahn. “I feel like there’s an awakening when you’re in your 30’s.”

His first plan of attack: Obliterate his $11,000 in credit card debt. For Hahn, credit was just a tool to for buying stuff when you didn’t have the cash. “The credit card debt was just something I was misusing,” he admits. “It became another part of my spending arsenal. I used credit for more spending power.”

Since March Hahn, who works in the Navy, has embarked on a diligent plan to reach debt zero across his four credit cards. Using a free personal loan calculator, he’s given himself 12 months to eliminate all balances and has, for the first time ever, begun budgeting.  He’s using Mint to stay on track.

Will Hahn cross the finish line in time? I thought it would be interesting (and fun?) to check in from time to time to report on his progress and setbacks. He says he likes having me as an accountability partner.

Here’s how Hahn’s staying focused and handling some setbacks in the first few months.

“Budgeting is Like Yoga”

Hahn’s Mint budget is his first true budget. “It is a behavioral modification. It’s like doing yoga for the first time. There’s pain and discomfort,” he laughs.

To make room for the roughly $900 a month debt payments, he’s had to make some big trade-offs. The greatest challenge has been cutting back on restaurant meals and outings with his girlfriend. “I though you needed to go out and have dates in order for there to be a connection,” Hahn says. “Instead, we’re spending more time at home and realizing that it’s ok. I have her support in that.”

His girlfriend is also helpful in planning and cooking their meals at home. “She makes enough so I have lunch the next day.” This alone, saves him $70 per week, Hahn estimates.

The “Wall of Shame”

While Hahn has a total of $42,000 in debt, he’s zeroing in on the credit card balances first using the snowball method and attacking the card with the greatest interest rate first. All the while, he’s stopped using plastic and sticking to a cash-only diet.

For motivation, he uses visual reminders. “I’ve printed a list of all the individual balances on my fridge. It’s my ‘wall of shame’ and I’m looking forward to crossing them off,” says Hahn.

Simultaneously Saving

It’s been a slow process, but Hahn is also working towards a three to six-month emergency reserve. “That was what my credit cards had been.” So far he’s managed to tuck away $1,000. “I just love the idea that, for the first time in my adult life, I saved $1,000 and didn’t spend it. It’s such a good feeling.” Once the debt’s paid off, he plans to make savings a higher priority and add more to the account.

An “Actual” Emergency

It’s a good thing that he started saving because in May, Hahn emailed me to say that his debt payoff plan had suffered a minor setback. But it was for an important cause: healing his cat.

He wrote: “One of our emergency funds just came in handy. The day after I (quite literally) cut up my credit cards, our cat, Yasmin, became very sick over the weekend, requiring a visit to an emergency veterinary clinic. Between buying a new pet carrier and the vet expenses, this was $550 that neither of us had planned. 

Fortunately, Andrea (my partner) has an emergency stash of her own, and between the two of us, we were able to handle this curveball with relative ease. Yasmin is okay (we have a follow-up appointment in two weeks), and we’ve used this event to reinforce just how crucial it is for both of us to set aside significant, liquid savings.

As for my debt repayment plan, this will weaken my attack for the month of May, as I want to stash an additional $500 into an emergency fund for when we run into another inevitable hurdle.”

Following that email, Hahn wrote about another surprise: A bigger car maintenance bill than anticipated.

All said, between the vet and car maintenance costs, he had to fork over $800 in unplanned expenses.

“This is definitely going to slow my debt repayment down by a month. Not very thrilled about this. Feel a bit defeated, honestly,” Hahn wrote.

Still, none of that $800 got charged to a credit card. So, in my book that’s #progress.

How will Hahn fare over the summer months? Will he find a way to get back on track?

Stay tuned to the Mint Blog for more updates on his debt payoff plan.

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at far[email protected] (please note “Mint Blog” in the subject line).

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

 

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