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Give Your Child the Gift of Stocks

Winning a late-night Hatchimal bidding war or driving across the state to pick up the last PlayStation gaming console in the region will certainly score parents points with the little ones this holiday season. But for a present with the potential to keep a child engaged well into adulthood, consider the gift of stocks.

You don’t need be a master investor to pick the right stock. Buying shares in a publicly traded company is less about the stock’s return than getting the young’uns engaged in the art of saving and investing at an early age. And if the stock happens to be a winner, experiencing the magic of compound interest firsthand will be an added bonus.

Here are some other reasons why stocks can make the perfect gift for kids:

Stocks can be tailored to all ages and interests: Kid-related investment ideas are everywhere. From breakfast to bedtime, children are exposed to products and services from publicly traded companies. Who makes their favorite cereal, snack or special-occasions-only fast food? Which brands are behind their most beloved toy, gadget, sneaker or sweatshirt? Explain that a owning a share of that company’s stock means they are not just customers — it makes them part owners of the business and comes with show-and-tell bragging rights.

You can buy them individually wrapped or in thematic bundles: Making a gift of a share (or more!) of a single company’s stock is great for a child who’s enamored with a particular product or brand. For children who are more broadly interested in a particular field (e.g., technology or medicine) or cause (the environment or social responsibility), a good option is to invest in a sector-specific mutual fund or exchange-traded fund. Each share of a fund or ETF buys part ownership in dozens of publicly traded companies that are chosen for their adherence to specific criteria or an investing philosophy.

Getting started is easy: One of the simplest ways to get children started with stocks (and to give them a true sense of ownership) is to set up a custodial brokerage account in their name and seed it with some starter stocks or shares transferred from your brokerage account. You’ll need their Social Security number and a grown-up to name as the custodian. Adult supervision is required to manage the account until the child reaches the age of majority (between 18 and 21, depending on the state).

Most major discount brokerage firms offer custodial accounts, including some with better terms than their regular accounts. Look for a firm with $0 minimum balance requirement, reasonable commissions and no extra account management fees (or one that waives them on custodial accounts). Alternately, an informal option is to purchase and hold shares in your own brokerage account to transfer to junior in the future.

You can bond over the ongoing activity of investing for years: Make a standing date to get together for regular shareholder meetings. At first, you might simply track performance and ogle at new products. As your child grows, so will her interest in her portfolio, and she’ll start to get the hang of how to invest in stocks. Don’t be surprised if you begin to bond over earnings reports, annual letters to shareholders and conducting on-the-ground research. The best way to keep your budding Warren or Wendy Buffett interested is to let him or her drive some investment decisions and pick companies for the portfolio. Encourage your children to add their own money to their account (reinforcing the “pay yourself first” habit) and offer to match the amount they choose to devote to investing.

Dayana Yochim is a staff writer at NerdWallet, a personal finance website. Email: DYochim@nerdwallet.com. Twitter: @dayanayochim.

How to Donate Credit Card Points, Miles or Cash Back to Charity

Forgotten loyalty accounts, unused sign-up bonuses, cobweb-covered miles. The ghosts of credit cards past might be a downer for you, but donating unused rewards to charity could help those in need — and might even keep the rest of your points and miles from expiring.

Donations of frequent-flier miles are a “critical, budget-relieving resource” for the Make-A-Wish Foundation, says Josh deBerge, the foundation’s director of public relations. The charity grants wishes for children with life-threatening medical conditions. “We grant 15,000 wishes each year with tens of thousands of wish participants, so airline travel is our largest expense as an organization.”

Donating rewards and perks that might otherwise go to waste is a painless way to help out organizations like Make-A-Wish. About one-third of earned loyalty rewards — worth $16 billion! — weren’t redeemed in 2011, according to the most recent data available from Colloquy, a loyalty marketing research firm.

How it works

These days, most airline, hotel and issuer loyalty programs let you donate miles, points and cash back to charity with just a few clicks. Programs that allow donations are listed in the next section. Here’s how you can contribute:

  1. Go to your loyalty program’s charity page and log in to your account. 
  2. Select a charity. Most programs let you donate to big-name nonprofits, such as the Red Cross, the Make-A-Wish Foundation and UNICEF. Others are more specialized. Hawaiian Airlines, for example, offers a selection of Hawaii-based charities.
  3. Indicate how many points or miles or how much cash back you want to donate. Generally, rewards will be deducted from your balance right away, and you’ll get a confirmation email from your loyalty program or the charity.

Loyalty programs usually count donations as “account activity.” That means that if your points or miles are due to expire because of inactivity, a small donation could restart the clock. If you’ve been sitting on a mother lode of miles because you’re waiting for a sweet flight deal, making a mileage donation could keep those miles active.

» MORE:  The best ways to donate to charity

Where you can donate

To donate rewards, go to the website where you’d normally redeem them. If you have a co-branded airline card, for example, go to the airline’s website to donate, not the card issuer’s website. Here’s where you can give, based on the types of rewards you’ve earned.

Airline miles Alaska Airlines American Airlines Delta Hawaiian Airlines JetBlue Southwest United Airlines Frontier (There are no online mile donations, but call (801) 401-9003 to make one.) Hotel points IHG Rewards Club Marriott Rewards/ Ritz Carlton Rewards Hilton HHonors Wyndham Rewards Choice Privileges Starwood Preferred Guest Issuer rewards American Express Capital One Citi Discover

 

What does the charity get, exactly?

You might think that if you donate 5,000 points, the charity will get 5,000 points — right? Well, not necessarily. It depends on your loyalty program and the charity.

Charities usually receive rewards donations in one of two ways:

  • Travel credit: Your charity might use your points or miles to cover a plane trip or hotel stay for one of its beneficiaries. For example, Fisher House, a nonprofit that supports military families, uses donated airline miles and hotel points to cover travel for wounded, injured or ill service members and their families.
  • Cash value: In some cases, your issuer might convert your points or miles into cash before sending it to the charity. The amount donated depends on the redemption value. With American Express, for example, the charity you choose would get 1 cent per point for the first 500,000 points you donate in a calendar year. After that, it would get 5 cents per point.

Most nonprofit websites clearly explain how they use point and mile donations. If you have any questions, you can always give them a call and get more information.

The fine print

Hypothetically, donating your rewards is simple: You find a good charity, unload your points, miles or cash back, and go about your business with a smile on your face. But there are a few other important things to know beforehand:

Donations aren’t tax-deductible. The IRS generally views credit card rewards as discounts, not income. So even if you earned thousands of dollars’ worth of credit card sign-up bonuses this year, Uncle Sam wouldn’t ask for a cut. The downside: You typically can’t claim a deduction for donating those rewards. However, you could get a tax deduction if you redeemed your rewards for cash back and used that money to make a separate donation.

Contributions are irreversible. For the most part, points and miles donations are final. So before you fork over your entire rewards balance, make sure you’ve thought things through.

Rewards can have low redemption values. If your issuer converts your rewards to dollars for donations, your gift might become less valuable. For example, Hilton HHonors points usually are worth about 0.5 cent each, according to NerdWallet valuations. But when you donate them, the charity gets only 0.25 cent per point, cutting their value in half.

A low redemption value doesn’t have to be a deal breaker. A small donation is better than no donation, right? But if you want to make a bigger difference, consider making an additional cash donation or signing up to volunteer with the organization. The charity will appreciate the extra support.

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.

How Retirement Accounts Can Affect Your Tax Bracket

Making the right decisions about your retirement savings can do wonders for your tax burden. That’s because retirement accounts come with tax advantages.

We asked Kathryn Hauer, a financial advisor in Aiken, South Carolina, for more information about these incentives.

What should retirement savers know about retirement accounts and income tax brackets?

How much you pay in federal income tax is based on your taxable income, which is your income minus any exemptions or deductions for which you qualify. The higher your taxable income, the higher the percentage of your income you may pay in taxes, depending on your income tax bracket.

As an example, for married couples filing jointly, income of less than about $18,550 is taxed at 10%, the amount between about $18,550 and $75,300 at 15%, the amount between $75,301 and $151,900 at 25%, etc., up until the highest rate of 39.6% for income of more than $466,950. You can see the IRS website for tax rates for each filing status.

Anything you can do to reduce your taxable income, therefore, could mean you take a smaller tax hit.

How does contributing to a 401(k) plan help reduce taxes?

When you’re building your retirement account, you get to defer paying taxes on the money you put in, and it is not counted as taxable income. That’s a great deal, because you pay less in tax. If you’re 35 years old and you and your spouse both contribute the maximum of $18,000 to your 401(k) this year, your taxable income will be $36,000 less than it otherwise would have been, which could put you in a lower tax bracket.

Remember, though, that 30 or 40 years from now, when you need to withdraw that money in retirement, it could add enough to your income stream to put you in a higher tax bracket.

How do required minimum distributions affect your tax bracket?

The government requires that you start taking withdrawals from your non-Roth IRA, 401(k) and other retirement plans when you reach age 70½. These required minimum distributions increase your taxable income and could affect how much you pay in taxes.

Here’s an example: Let’s say you and your spouse are both 70 years old and retired, and together you collect $30,000 per year in Social Security. One of you collects a monthly pension that totals $15,000 per year, giving you a total adjusted gross income of $45,000.

Each of you also has $500,000 in a traditional IRA that you built up over your working years. Neither of you has taken withdrawals up to this point, but after you turn 70½, you both know that you will have to take a distribution to avoid penalties.

Required minimum distributions are calculated according to IRS life expectancy tables. In this example, you would each be required to withdraw about $18,000 for the year.

This adds $36,000 of income onto your AGI, so you go from being taxed on $45,000 to being taxed on $81,000 that year, pushing you from the 15% tax bracket to the 25% tax bracket.

Remember, however, that tax rates in the U.S. are marginal, which means that all of your earnings aren’t taxed at the same rate. In this case, only the amount above the cutoff of $73,500 is taxed at 25%, so a taxable amount of about $7,500 gets taxed at the higher percentage.

What is one key step people should take to limit their taxable income?

If you have access to a 401(k) from your company, you want to contribute as much as you can to reduce your tax burden. If you don’t have a 401(k) or similar plan, contribute to a traditional IRA. The maximum you can contribute for tax deferral is much lower than with a 401(k) — just $5,500 in 2016 — but it will reduce your overall tax burden.

Kathryn Hauer is a certified financial planner and fee-only investment advisor with Wilson David Investment Advisors in Aiken, South Carolina.

Mortgage Rates Today, Wednesday, Dec. 7: A Notch Lower; Home Prices Soar Again

Thirty-year fixed, 15-year fixed and 5/1 ARM rates all took a step lower Wednesday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

Rates seem to be topping off for now, with a recent lack of news to trigger a major move. Central banks may change that in the coming days, with monetary policy announcements expected from the European Central Bank Thursday and the U.S. Federal Reserve next week.

Overall mortgage applications declined slightly for the week ending Dec. 2, according to the Mortgage Bankers Association. Purchase applications were up 0.4%, while refinance loan applications fell 1% from the previous week.

FHA mortgage applications were higher, as were VA and USDA loans. The average contract interest rate for conforming 30-year fixed-rate mortgages was 4.27%, the highest since October 2014, according to the MBA.

Mortgage Rates Today, Wednesday, Dec. 7 (Change from 12/6) 30-year fixed: 4.30% APR (-0.04) 15-year fixed: 3.69% APR (-0.02) 5/1 ARM: 3.77% APR (-0.01) Home prices continue to soar

For homeowners, it’s a blessing. For homebuyers, not so much. Home prices continue to rise — and the forecast is for more of the same in 2017. Real estate analytics firm CoreLogic reported home prices nationwide, including distressed sales, rose 6.7% year-over-year in October.

“Home prices are continuing to soar across much of the U.S., led by major metro areas such as Boston, Los Angeles, Miami and Denver,” Anand Nallathambi, president and CEO of CoreLogic, said in a news release. “Prices are being fueled by a potent cocktail of high demand, low inventories and historically low interest rates.”

Price appreciation may slow in 2017, he said, but not by much.

“Looking forward to next year, nationwide home prices are expected to climb another 5% in many parts of the country to levels approaching the pre-recession peak,” Nallathambi said.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.

How to Make Successful Resolutions in 2017

By Eric Jorgensen

Learn more about Eric on NerdWallet’s Ask an Advisor

I don’t think any of us plan to work at our New Year’s resolutions for just a few months before giving up, but that’s exactly what many of us end up doing. Changing a habit is hard, and resolutions require that.

Here are three characteristics of successful resolutions. The examples deal with saving money, but this advice can apply to other financial goals or goals about fitness, being more conscientious, keeping in touch with friends and family, and other aspects of our lives.

They are specific

It’s not enough to say, “I want to save more money.” How much do you want to save, why and by when? Once you’ve begun saving, review your progress occasionally to see if you need to increase your effort.

I recommend monthly goals, which give you 12 opportunities to make progress toward a bigger annual goal. If you want to save $1,200 more this year than you did last year, break it down into an extra $100 per month. If you don’t meet the goal one month, spread the difference over the remaining months.

» MORE: How to build an emergency fund

They are realistic

Set a goal you think you can reach, understanding that your kids will still want to play soccer, you’ll still need to eat and you’ll still have to maintain your car and home. That makes saving $1 million in a year an unrealistic goal for most of us. But saving even $25 per month, especially if you haven’t been putting any money away, will help you build the habit.

If you’re increasing the amount you save each month, make sure it’s not going to hurt you financially. It should feel uncomfortable, but it shouldn’t affect your ability to meet your basic needs — not your “wants,” which are a very different thing.

They are personal

Why do you want to save more? Are you really concerned about retirement, or have you dreamed of spending two weeks on vacation without worrying about how you’re going to pay for it? There’s no right or wrong reason to save money, but you need a goal you think is important, not one that everybody else is talking about or recommends. This gives you a reason to continue working when — not if — it gets difficult.

I want to be clear: Just about all of us will need to have some type of financially independent retirement, either because we don’t want to or simply cannot work any longer. You do need to save for this eventuality, and the sooner you start, the more opportunities for success you create.

» MORE: How to build a budget

Find an accountability partner

Setting a good goal is important, but so is your follow-through. Find someone to help keep you focused. That could be a friend or family member, as long as you’re sure that person will push you when you need it.

If you’re hiring a planner, make sure that person will check in with you throughout the year. Paying somebody to hold you accountable for a goal gives you more skin in the game. If you hire somebody, you’ll make sure you get your money’s worth.

Consider everything you want to accomplish during the next year. There are 52 weeks, so you should be able to do all kinds of things, right? Wrong! Each of us has only so much capacity. But setting specific, realistic goals makes this easier. Start small, and remember the “why” when things get difficult.

And perhaps most importantly, don’t forget to celebrate the victory when you reach the goal.

Eric Jorgensen is a fee-only financial planner with MainStreet Financial Planning in Silver Spring, Maryland.

Insurance Blind Spots: 5 Coverage Gaps That Could Cost You

You might think you have airtight insurance protection against storms, car accidents and other mishaps. But you’d hate to discover hidden cracks in your coverage once it’s too late.

Here are five insurance problems you might not be as prepared for as you think — and how to plug the coverage gap.

1. No flood insurance

Flooding has occurred in every state in the country over the past five years, according to the Federal Emergency Management Agency. Yet only 12% of homeowners nationwide carry flood coverage, an Insurance Information Institute poll found.

Homeowners insurance doesn’t cover flooding; you’ll need a separate policy. You can find local agents through the National Flood Insurance Program. You can also ask your home insurer for help starting a policy through the federal program, or whether there are companies in your state that offer private flood insurance.

There’s a 30-day waiting period before coverage kicks in, so get your flood insurance squared away well ahead of coming storms.

2. No way to pay off a totaled car

Gap insurance helps you avoid owing money on a car loan or lease if your vehicle has been totaled or stolen. Along with comprehensive and collision coverage, gap insurance is a smart addition if you lease or finance a car.

Say you lease a $20,000 car at payments of $400 a month. Five months later, your car is totaled in an accident. If the car’s value has dropped to $15,000, that’s the amount your collision claim check will be, minus your deductible. That won’t be enough to cover the $18,000 left on your lease.

This is where gap insurance kicks in. It makes up the difference between what your car is worth when it’s stolen or totaled and how much you owe on a car loan or lease.

You can buy gap insurance from the car dealership or your lender. Or you can go through your car insurance company, which is typically cheaper unless you want gap coverage for several years.

» COMPARE: Car insurance quotes

3. No plan for sewage backups

You may not realize that you’re responsible for the sewer line that runs from the main pipeline in the street to your house. Yet standard home insurance typically doesn’t cover backups in this part of the line. Enter sewer backup coverage. It pays for cleanup and repairs from spewed sewage in your house.

Sewer backup coverage is relatively affordable — $40 to $50 a year, according to the Insurance Information Institute. Talk to your home insurer about adding this kind of coverage.

4. No income after a disability

Among 20-year-olds, more than 1 in 4 will suffer a disability before retirement age, according to the Social Security Administration. If you can’t work because of an illness or accident, you need a plan to pay your bills.

Social Security disability insurance is available only to people with long-term disabilities lasting at least one year. Just 38% of workers have access to short-term disability insurance through their employers, according to the Bureau of Labor Statistics.

You don’t have to rely on your workplace for coverage. Individual disability insurance is available from several insurers, including State Farm, MetLife and Mutual of Omaha. If your employer doesn’t offer short-term disability insurance, or your current benefits fall far short of replacing your full income, look into getting a policy elsewhere.

4. No financial safety net for earthquakes

Most homeowners, even those who live in high-risk areas, go without earthquake insurance. They risk financial ruin if their homes and belongings are destroyed. Only 10% of California residents have earthquake insurance, and 14% of people in Western states, according to the Insurance Information Institute.

Standard homeowners insurance won’t pay to fix damage caused by earthquakes. Home insurers might offer earthquake coverage as a policy add-on for an extra cost — and in California they have to. Or you might need to look for stand-alone earthquake insurance.

Californians can shop for a policy through the California Earthquake Authority. For those living in other states, ask your home insurer or agent for help finding companies that sell earthquake coverage or check your state’s department of insurance website.

Alex Glenn is a staff writer at NerdWallet, a personal finance website. Email: aglenn@nerdwallet.com.

This article was written by NerdWallet and was first published by The Associated Press.

Mortgage Rates Today, Tuesday, Dec. 6: Postelection Rate Surge Cuts Potential Refinance Population in Half

Thirty-year fixed rates held steady, while 15-year fixed and 5/1 ARM rates eased slightly lower Tuesday, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

The mortgage rate runup since the election has pinned rates near two-year highs, with little on the horizon to ease the upward pressure. The Federal Reserve is expected to raise short-term interest rates at its meeting next week. While not a direct influence on mortgage rates, a Fed hike would give little room for long-term rates to decline.

Mortgage Rates Today, Tuesday, Dec. 6 (Change from 12/5) 30-year fixed: 4.34% APR (NC) 15-year fixed: 3.71% APR (-0.02) 5/1 ARM: 3.78% APR (-0.01) 4.3 million potential refinance candidates lost since election

The dramatic increase in mortgage rates since the presidential election has taken its toll on the number of potential refinance candidates. In a new report, real estate research firm Black Knight estimates 4.3 million homeowners have been removed from the pool of borrowers likely to refinance their home loan.

“From the 8.3 million borrowers who could both likely qualify for and had interest rate incentive to refinance immediately prior to the election, we’re now looking at a population of just 4 million total, matching a 24-month low set back in July 2015,” Ben Graboske, Black Knight executive vice president, said in a release.

» MORE: The pros and cons of home equity lines of credit

However, Graboske notes there are still 2 million borrowers who could save $200 or more per month by refinancing. He also says affordability has taken a hit — with the rapid increase in mortgage rates equivalent to a rise in the average home price of over $16,400.

“It now takes 21.6% of the median income to purchase the median home nationally,” he said. “That’s the highest share of median income needed to buy the median home since June 2010, when rates were at 4.75% but the average home was worth nearly 20% less than it is today.”

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick.

5 Tips for Handling Holiday Financial Stress

By Kurt Smith

Learn more about Kurt on NerdWallet’s Ask an Advisor

If you’re like many people, the holidays cause more financial stress than any other time of year. Figuring out how to afford gifts, décor and food for the big feast is often overwhelming.

You might never be able to remove all of your holiday money worries, but you can alleviate some of them. Even though your shopping list might continue to grow while your wallet shrinks, you can enjoy this season without breaking the bank.

Here are five ways to survive holiday financial stress.

Set a budget

Review your earnings and expenses, and then decide how much you’re willing to spend on holiday gifts, food and other items. Consider making a list and assigning each item a specific dollar amount. This will help you overcome the temptation to overspend.

» MORE: How to build a budget

Plan your shopping

Whether you’re headed to the grocery store or braving the crowds at the mall, know what you intend to buy and who it’s for. Sticking to your list will also help keep you from buying unnecessary items and prevent overspending. It’s easy to make impulse purchases with all the eye candy in stores this time of the year, but you won’t fall prey to these consumer tricks when you know what you need.

Don’t buy it if you can’t afford it

A 2016 report from investment management firm T. Rowe Price showed that 25% of parents have dipped into their emergency savings or 401(k) retirement plan or taken out a payday loan in order to cover holiday expenses. If you can’t afford to buy your children something on their wish lists without taking out a loan or borrowing from another account, the best option is to not buy it — it’s OK to say no. Your children will survive. Shortchanging your savings or going into debt is ultimately more detrimental to your family than skipping a few presents.

» MORE: How to build an emergency fund

Get creative with gift giving

You can give thoughtful gifts while spending a fraction of the cost. If you’re crafty, handmade presents are extremely thoughtful. And if you’re lacking in artistic abilities, you can always give the gift of your time. Cooking someone a meal, giving new parents a night out while you babysit, or offering to clean someone’s house are gifts that recipients will love and will cost you nothing.

Remember what the season is all about

It’s easy to be swept up in the consumerism of the season, but remember that it isn’t about money and materialism. Focusing on its religious purpose or enjoying time with your loved ones will keep you from stressing over less important things.

With a little planning and creativity, it’s possible to get through the holidays and avoid debt or wiping out your savings account. And you’ll feel even less stress when you reach January in good financial shape.

Kurt Smith is a financial and relationship counselor at Guy Stuff Counseling and Coaching.

7 Best Apps for Holiday Shopping

Apps can help smart consumers make holiday shopping more manageable. But with so many to choose from, how can you pick the best?

Here’s a list of our favorite shopping apps. These mobile tools — which are free to download — can help you find deals, manage your shopping list or even locate your car in a crowded parking lot.

ShopSavvy

ShopSavvy helps you find the lowest price available on gift items. If you’re in a store, use the app to scan a product’s barcode, and ShopSavvy will locate the best deal locally or online. If the store offers price matching, show a salesperson your ShopSavvy research to request that lower price.

Download from iTunes or Google Play.

CouponCabin

CouponCabin is a coupon and cash-back app. Members can search for offers from more than 4,000 stores and brands, and earn up to 10% cash back on online purchases from more than 1,800 stores.

Download from iTunes or Google Play.

Retale

Retale is like flipping through a retailer circular without the paper. This location-based app presents weekly ads, coupons, store locations and more in an easy-to-navigate digital format. Users can also create shopping lists and set alerts for specific products.

Download from iTunes or Google Play.

Discount Calculator

Avoid sticker shock at the register with Discount Calculator, an ingenious app that figures the real prices for all of your items, including store discounts and applicable sales taxes. The Discount Calculator apps for Apple and Android devices are made by different companies, but both have easy-to-use interfaces and positive user reviews.

Download from iTunes or Google Play.

Santa’s Bag

If you want to be organized and stick to your holiday budget, use Santa’s Bag to combine a shopping list, budget tracker and Christmas countdown clock. The app is only for iOS users, but there’s a similar app for Android users below.

Download from iTunes.

Christmas Gift List

Android users can manage their shopping list and budget with a fun, holiday-themed interface using the Christmas Gift List app. It’ll help keep you on track, especially if you’re like the 42% of respondents from a survey in NerdWallet’s Consumer Holiday Shopping Report who didn’t stick to their 2015 holiday budgets. The app also lets you set reminders for things — for example, to set aside time to wrap your gifts.

Download from Google Play.

Find My Car

Find My Car can be useful to help figure out where you parked in a gigantic shopping center lot. The app shows the GPS location of your car. The iOS and Android apps are made by different companies, but they share the same name and they work well, reviewers say.

Download from iTunes or Google Play.

Updated Dec. 5, 2016.

Find the Used-Car-Buying Sweet Spot

It’s an oft-cited rule of thumb that cars lose at least 20% of their value when you drive them off the lot. But that’s actually just the beginning of a scenario that, if you work the angles, can save you a ton of money on vehicle ownership.

Data from Edmunds.com puts first-year depreciation at almost 22%, and roughly 12% annually in years two through four. Taking an average midsized sedan as an example, with a selling price of about $24,000, that first-year depreciation drop means an initial loss of almost $5,300, and the car has lost about half its value by the end of year four.

Lease returns soaring

This isn’t good news for the new-car buyer. But the savvy used-car buyer can use this information to save money on both ends of the ownership cycle. Furthermore, with the increasing popularity of two- and three-year leases, there’s a flood of good used cars to choose from.

Used-car shoppers should try looking for 2- and 3-year-old cars coming off lease, says Lisa Rosenberg, an analyst for CarGurus.com, a car shopping website that features 5 million new and used vehicles. CarGurus’ data show that a person could save at least $6,750 buying a 2-year-old formerly leased car, a 25% savings over a new model. Additionally, a 2-year-old car will still be under factory warranty.

[In the video below, NerdWallet’s Philip Reed and other auto experts share tips on used-car buying.]

Tony Hoang, head of vehicles at eBay Motors, has a slightly different take. “If you are looking to get a great value for nonluxury, midsize vehicles, [you] should purchase a used vehicle that’s around a year old,” he says.

To sell that car “strategically,” Hoang says to put it back up for sale after about four years since it still holds much of its value, based on the used purchase price. After the fifth year, the value begins to drop as the factory warranty expires and repairs and maintenance increase.

Putting it all together, if you buy a used car and drive it for three or four years, you’ll get a modern set of wheels at a bargain price. Edmunds estimates that the three-year depreciation cost of an average midsize sedan, bought at 1 to 2 years old, could be as low as $7,000, or about $2,333 each year.

But Hoang points out that each vehicle class has its own peculiarities when it comes to depreciation. For example, the market for midsize sedans is softening as the popularity of SUVs and trucks increases.

Make depreciation your friend

It’s important to understand the effect of a car’s depreciation on your automotive budget and that you pay dearly for that whiff of new car smell. A chart of ownership expenses on Kelley Blue Book shows that depreciation is the single biggest expense, dwarfing the cost of fuel, insurance, registration, financing and maintenance.

Buying a near-new car is easier today than ever before, particularly if you take advantage of nationwide Internet searches and online vehicle history reports. Even the interest rates for used cars have dropped, increasing the overall savings. Concerns about buying a car sight unseen are addressed by a network of mobile inspectors such as WeGoLook.com, which recently teamed up with eBayMotors to provide onsite inspections for $69.

An oft-cited disadvantage of buying used is that you don’t get the latest technology. However, many safety features, such as blind-spot warning and forward collision avoidance systems, have been on the market for several years and are now available in many used cars.

Choosing a car that depreciates slowly can save you thousands over a four-year ownership cycle. Buying the car after it’s already depreciated — and selling it strategically — reduces your costs even more.

And when buying a used car, you can arrange auto financing even before you hit the dealer; your research can include a car loan calculator to help you set a budget.

Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: preed@nerdwallet.com.

This article was written by NerdWallet and was originally published by USA Today.

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