Your Yearly Money Guide

JANUARY

See where you stand.

• Start off the year with a financial checkup. USAA's free Financial Assessment takes only 10 minutes.
• Calculate your net worth. Add up the value of everything you own, and subtract all your debts.
• Take a look at what you bring home and what you spend each month. Set up a budget, and find some painless ways to save.

Check your credit.

• Keeping a high credit score starts with making sure the reporting agencies have accurate information. By law, you're entitled to a free copy of your credit report every year. Request one from each of the three major agencies (Equifax^®, Experian^® and TransUnion^®) by visiting annualcreditreport.com.
• Your actual credit score isn't free. Expect to pay the agencies around $15 for it. For easy, unlimited access to your credit score for a low monthly fee, sign up for USAA's CreditCheck^® Monitoring.

Consider a Roth conversion.

• In 2010, it could be beneficial for many people to move money from a traditional IRA — and many employer plans — to a Roth IRA. The advantages? Qualified withdrawals from Roth IRAs are tax-free, and there are no required minimum distributions. However, withdrawals made before age 59½ may be subject to a 10% federal penalty and ordinary income taxes. Learn more about conversions.
• You'll pay taxes on the amount you convert, but if you do it this year, Uncle Sam will let you split the converted amounts in half and not tax them until your 2011 and 2012 returns. Consult with your tax attorney for your specific situation.

FEBRUARY

Gather your tax papers.

• It's time to get ready for tax season by gathering your W-2, 1099 and other tax forms.
• If you want to file your taxes on your own, take advantage of a 25% USAA member discount and sign up for TurboTax¹. It's an easy, secure, web-based service. After you start, you can save your progress and come back to pick up where you left off at any time.

Attack your debt.

• Carrying around a big debt burden can make it harder to pay the bills and diverts money that could be used to save for your future. Make 2010 the year you turn the corner on high-interest, non-deductible debt.
• First, get smart about debt, then use USAA's Debt Analyzer to assess your situation and put together a customized plan of attack.

Check mortgage rates.

• Some economists expect interest rates will rise as the economy recovers, which means now may be a good time to shift from an adjustable rate to a fixed-rate mortgage if you are planning to stay in your house for a while.
• On the other hand, a fixed-to-fixed refinance might make sense if the new rate is at least 1% below your current rate and you plan on staying in your house for at least five years.

Don't squander your raise.

• If you were lucky enough to get a raise this year, don't let that extra money get lost in the shuffle. Dedicate at least half of it to savings or paying down debt.
• This is a great time to increase your contributions to your employer's retirement plan, or set up an automatic monthly transfer from your checking account to your savings account.

MARCH

Max out your IRA.

• You have until April 15th to make an IRA contribution for the 2009 tax year. The maximum contribution is $5,000 per year if you were under age 50 or $6,000 if you were 50 and older at the end of last year.
• It's hard for many people to scrape that much money together all at once. Make it easier to reach the 2010 max by setting up an automatic investment plan this month.²

Clean up your investment clutter.

• If you have investment accounts, 401(k)s and mutual funds scattered across the financial world, simplify your life by consolidating them with one trusted provider.³

Get rid of the paper piles.

• Switching from paper statements to electronic delivery will give you a cleaner desk and make your mailbox less attractive to thieves out to steal your identity. Update your USAA document preferences.
• Save stamps: Pay bills easily and electronically with USAA Web BillPay^®.
• Learn how to use USAA mobile to check balances, transfer funds, request an auto ID card, deposit checks⁴ and more.

APRIL

Adjust your withholding.

How did your tax return look?

• If you got a big refund, don't celebrate — that only means you gave the government an interest-free loan during the year. On the other hand, if you ended up owing Uncle Sam too much, you may have been penalized for doing so.
• Fine-tune your withholding to make sure you're closer to the target next time around.

Put your refund to work.

If you got a tax refund, do something strategic with it.

• Pay down debt.
• Build your emergency fund.
• Consider an Individual Retirement Account.
• Save it for college.

MAY

Get ready to move.

• Summer is a popular season for moving. If you're buying a house, figure out how much you can afford to spend, then put yourself in a position to negotiate by getting pre-qualified for a mortgage.
• Check out MoversAdvantage^®5. We'll help you through every step of the relocation process, from selling your current home to buying a new one using a USAA-preferred agent. Plus, you can receive up to $3,100 when you use the service.⁶

Start an emergency fund.

• You should have a stash of cash big enough to cover three to six months of your regular expenses.
• Use a conservative account you can access easily, like a savings account.

Re-think your insurance deductibles.

• Take a look at your auto, property and health insurance deductibles. Consider increasing them to an amount you could cover on your own, which could lower your premiums significantly.

JUNE

Travel safely and smoothly.

• Planning a summer road trip? Store the number for USAA roadside assistance in your cell phone: 1-800-531-8555.
• If you have a USAA credit card, let us know when you'll be traveling. It will help protect your card from fraud and avoid unnecessary disruptions triggered by unusual transactions. Just enter "manage travel notifications" in the search box right here on usaa.com.

Take a look at long-term care.

• $77,000: That's the average cost of a private room per year in a nursing home. If you're over 50, it's time to get educated about long-term care insurance.

JULY

Protect your assets.

• Homeowners policies don't cover floods. Even if you don't live near water, consider a flood policy.
• If you rent, your landlord's policy probably doesn't cover your possessions. Get a renters policy for as little as $10 a month.
• Protect your high-value items — like jewelry, art, silverware, cameras and weapons — with valuable personal property insurance.
• Homeowners, renters, auto and watercraft policies have liability coverage that protects you if you're responsible for harming others or their possessions. As a rule of thumb, each policy should have enough to cover your assets and future earnings. You can supplement this coverage with an umbrella policy.

Take inventory.

• If your property's lost, damaged or stolen, you'll want a good record of what you owned. Make a list or capture images of all your possessions using a camera or video camcorder.
• You can also download free inventory software from the Insurance Information Institute.
• Store your inventory records in a safe and separate location, such as a safe-deposit box.

AUGUST

Boost your energy efficiency.

• Lower your utility bills with a little help from the federal government. There's a 30% tax credit (max value $1,500) for energy-saving improvements like new doors, windows, insulation, air conditioners and heaters.
• You can take another 30% credit — with no cap — for installing alternative energy equipment like wind turbines or solar water heaters. See the government's Energy Star site for details.

Take a hard look at your bank.

• Your bank is at the center of your financial universe, so make sure it's giving you what you need.

SEPTEMBER

Review your investments.

• Are you confident that you have the right mix of investments? The USAA Portfolio Planner can give you a personalized recommendation in a matter of minutes.

Conduct a back-to-school review.

• Use USAA's Education Savings Planner to get started on saving for college or check your progress toward this goal.
• A 529 college savings plan is a great way to save because there are no income limits on contributions and qualified withdrawals are tax free.⁷
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• OCTOBER

  Make a (new) will.

• Don't leave a mess for your family to clean up. Plan your estate by creating a health care power of attorney, a living will and a durable power of attorney.

Review your life insurance.

• Make sure you have the right amount of coverage. Don't rely on employer coverage — it may not be enough, and you may not be able to take it with you when you leave.
• To cover both short- and long-term needs, consider a combination of term and permanent insurance.

Set up Required Minimum Distributions.

• If you're older than 70½, IRS rules require you to tap your IRA and employer retirement plan.
• Last year, this requirement was suspended, but it's back in place for 2010. Review the rules and then make arrangements to avoid a harsh 50% tax penalty.

NOVEMBER

Set a holiday shopping budget.

• Before you hit the stores or the web, set spending limits to make sure you don't get carried away with the spirit of giving. If you can't pay for it in the month you bought it, don't do it.
• Check out USAA MemberShop for rewards of up to 20% when you buy online from hundreds of affiliated merchants⁸.
• Some consumers desperate for cash during the holidays fall prey to payday lenders, pawn shops and rent-to-own stores. Don't be one of them: You'll pay sky-high interest rates and dig yourself a financial hole.

It's Medicare season.

• Nov. 15 is an important date; it's the first day of Medicare's annual open enrollment period. You have until Dec. 31 to enroll in a Part D prescription drug plan or switch providers, and until March 31 to change your health coverage.

Have a heart-to-heart talk with your parents.

• Use the holidays to set aside some time to ask your parents about their financial situation.
• Make sure they have a sound retirement income plan, have addressed the potential need for long-term care the right estate planning documents. and have all

DECEMBER

Make your end-of-year tax moves.

Use these tips to lower your 2010 tax bill:

1. Pay deductible expenses early. This might include your January 2011 mortgage payment, property taxes or charitable contributions you've pledged for the coming year.
2. Defer income. People who are self-employed have the greatest ability to push off income into the next year: Simply wait till the beginning of the year to issue some of your invoices.

Before making a move, talk to a tax professional. If it looks like you'll end up in a higher tax bracket next year, you may actually want to reverse these tactics — accelerating income into this year's lower return, and pushing off deductions to the next year, when they'll be more valuable.

Track your donations.

• December is a popular time for making charitable donations. Keep a record of what you donated and remember you'll need receipts for contributions of $250 or more, and an appraisal for non-cash contributions worth more than $5,000.