Month: November 2016

Make The Nice List With Your Credit Card Use

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It’s that time of year again. He’s making a list, and he’s checking it twice. Of course, we’re talking about the major credit bureaus! With holiday spending season upon us, it’s time to broach an uncomfortable subject: how to pay for all that joy and goodwill.
The holidays can be an expensive time of year, and it’s tempting to turn to plastic to finance the whole thing. Consumers are planning to spend more this year than last year, with only 24% of Americans planning to reduce their holiday spending. Regardless, the average American plans to spend $812 on the holidays this year, and that’s more than most people have just sitting around or in their savings.
In the spirit of the holidays, let’s look at some “naughty” and “nice” ways to use your credit cards. Be sure to stay on the right list, or there may be coal in your stocking – and smudges on your credit report!
Naughty: Financing gift-giving with credit
If you don’t have the money sitting around to finance your gift-giving, it can be tempting to pull out a credit card at every store and shop ’til you drop. That’s exactly what most people do when spending with credit. A recent study of consumer behavior found that people spend nearly 20% more when shopping with a credit card. The dissociation between plastic and money can erode our ordinarily thrifty impulses, causing us to overspend.
There’s also interest to contend with. That $812 could easily turn into $1,000 or more thanks to the power of compound interest. Even deferring payment for a month can cost you quite a bit! Less than a third of Americans pay off their holiday credit card bills immediately. Most will end up carrying a balance that can make it hard to start the new year right. In fact, consumer counseling agencies see a 25% increase in requests for help in January and February. Holiday spending can be the last straw for people barely getting by while making minimum payments.
Oh, and by the way, you might end up ruining the surprise on Christmas morning! If you put something special for your someone special on a joint credit card, they might see it on the credit card statement. Nothing ruins a perfect gift like a spoiled surprise.
Nice: Paying for holiday travel
If you’re traveling for the holidays, it can make sense to use credit cards. Most major credit cards offer insurance for rental cars and extra cancellation policies for flights in case things change at the last minute. Using a credit card to make reservations at hotels, rental agencies and other book-ahead services can also prevent the company from placing a hold on your account as a deposit.
Remember to make a clear budget for your travel plans and stick to it! Resist the impulse to take frivolous upgrades. Holiday travel is a chance to bond with family, and fancier hotel sheets won’t help with that! Keeping a clear budget will make sure you can pay off that credit card bill next month and avoid costly financing charges.
Naughty: Guilt spending
The holidays are full of messages that connect spending to caring. These messages would have us believe that, if you love someone, you’ll get them jewelry or another extravagant item. Advertisers encourage consumers to make emotional decisions about spending, rather than looking at what they can afford. Credit cards make this even easier by letting you postpone paying for the gift.
Instead of telling someone you care with borrowed money, show them you care with a thoughtful message and a reasonable gift that’s based on what they want. Don’t buy into the myth that dollars are a meaningful quantification of your feelings. Give sensible gifts with money you have.
Nice: Spending rewards on holiday purchases
If you use a rewards card throughout the year, now’s a good time to cash those points in. Most companies offer discounts on two commodities everyone needs this time of year: travel and gift cards. You can use your rewards money to help absorb some of the impact of gift-giving. Picking up gift cards this way can make last-minute gift-giving easier.
It might also be worth investigating the possibility of giving travel points or miles directly to others. This can make a difference for relatives who travel frequently, or make a trip home feasible for people who live far away. Look into using your rewards generously this year!
Your Turn: How do you manage your holiday spending? Are there secret tricks to keep those costs down, or are there techniques you use to keep you within budget? Let us know in the comments!
SOURCES:
http://abcnews.go.com/Business/story?id=88539&page=1
http://moneyqanda.com/spend-wisely-with-credit-cards-this-christmas/
http://www.moneymanifesto.com/use-credit-card-rewards-to-pay-for-christmas-2376/
https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/
http://www.daveramsey.com/blog/credit-free-christmas


Going From New Homeowner To Happy Home: Tips For Recent Homebuyers

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Buying your first home is a major milestone. There’s nothing quite like the giddy
rush that comes from knowing you could paint a wall fluorescent pink or cover the cabinets in peanut butter and no one could legally stop you. You’ve also got a new and quite big investment you need to maintain. Weighing the freedom against the responsibility is a delicate balancing act, and doing it successfully is part of what being a homeowner is all about

 

There are a number of upcoming firsts for new homebuyers. Since you’ve just come up with a down payment, you might think your biggest hurdle of financial responsibility is over. However, that’s not the case. Check out these common homeowner situations to help you best prepare for them.
1.) Something major breaks
As a renter, if the refrigerator stopped running, you only had to concern yourself with keeping your food cold until the landlord fixed it or bought a new one. Also as a renter, major plumbing problems in your building can be a hassle, but easily survivable. The first time something major, like an appliance, structural element, or major system breaks in your home, you can be in for a staggering amount of work and stress.
If you’re counting on homeowner’s insurance or a home warranty to cover you, check your policies carefully. Most home warranties end at the walls of your house, and insurance won’t cover damage outside of a disaster. Everyone you might turn to for assistance will be looking for reasons not to help you. If you need to do significant work on your home, like a large-scale plumbing repair, you’ll probably have to pay for it yourself.
Events like these will happen sooner or later. The only way to be prepared is to practice self-insurance. Start building a home repair and renovation fund, and build major expenses into your regular monthly budget. When you spread these expenses out over the course of months, rather than trying to pay for them all at once, they’ll be much more manageable. As a guideline, expect to spend 1-4% of the value of your home in repairs and maintenance every year.
2.) Costs increase
When considering a budget in your new location, it’s tempting to just move the money you were spending on rent into a mortgage payment. However, your housing costs aren’t the only thing that’s likely to go up. If you’re moving from a smaller apartment into a larger house, utility costs will increase. If you’re going from a relatively new apartment building into an older house, appliances won’t run as efficiently, and seals around doors and windows won’t fit as snugly.
It’s not just utilities, of course. Transportation costs may also increase if you’ve moved further away from work or other places you frequent. Having a larger kitchen might encourage you to cook and entertain more, putting pressure on the grocery budget but saving on your restaurant spending. Lawn maintenance and landscaping costs may make an appearance on your budget for the first time. A lot of costs will go up as you transition to a new lifestyle.
Spend your first month in your new locale documenting your expenses. This is the best way to build expectations for what your new living expenses might look like. If, after a month, your expenses are too high, you’ll have a better idea about where you can make cuts.
3.) Tax bills come due
Property taxes are a once or twice a year expense that can really wreak havoc on your budget. While many mortgage companies maintain an escrow account for these costs and include them in your regular mortgage payment, many homeowners are on their own when it comes to tax time. If that’s the case for you, start doing research to determine what your tax bill might look like.
This is another expense that gets manageable if you break it into a monthly cost. The US average property tax bill is just under $3,000. That’s about $250 per month. That might be a challenge to set aside, but it’s still better than being blindsided with the full amount.
4.) Maintenance requirements increase
There are dozens of things around the house that most people don’t think twice about. Items like water supply hoses, smoke alarms and toilet bowl seals all decay with time. Many of these things can cause damage to your house if it doesn’t work properly.
Start making a list of chores that need to be done monthly, weekly or less frequently. Split up those duties to make sure no one has to do it all by themselves. Keep a spreadsheet or some other document so you know the last time maintenance was performed on major items in your home. Remember, an ounce of prevention is worth a pound of cure. Fix little problems before they turn into big ones!
YOUR TURN: What do you wish someone had told you before you bought your first home? Let us know in the comments!
SOURCES:
https://www.fool.com/retirement/2016/10/16/4-personal-finance-tips-for-new-homeowners.aspx

https://www.texasrealestate.com/advice-for-consumers/article/10-maintenance-tips-for-first-time-homeowners

http://www.kiplinger.com/article/real-estate/T029-C006-S001-first-time-homeowner-lessons-learned.html
 

Get These Things Out Of Your Purse Or Wallet Now!

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Your wallet can become a lot like a junk drawer you carry around. It’s cluttered with loyalty cards, coupons, cash, checks, store credit cards, credit cards for gas, credit cards for everyday purchases and a host of identification cards. That much bulk can make your wallet or purse a serious hassle to carry. Even worse, though, you may be setting yourself up for identity theft.

Even though it’s all packed into one place, if it is stolen, each item has to be accounted for individually. Forget even one and you set up a thief to take your credit for a ride. That’s why it’s a good idea to give your purse or wallet a good once over. Look for things you don’t regularly need and store them in another location for use when you do need them.

There are also things you should never carry in a purse or wallet. If you see these items as you’re trimming down your daily carry, take them out immediately.

1.) Your Social Security card

There are only a few times when you absolutely need your Social Security card. If you’re starting a new job, opening a new account or applying for some kinds of government benefits, bring the original card. It’s easy enough to stuff the card into your wallet or purse for one of these occasions and then forget about it.

That could be a big mistake. Thieves can use your original Social Security card to apply for all kinds of unsecured debt in your name. Canceling your Social Security number and getting a new one is a complicated, time-consuming process, and you may be liable for the fraud that’s committed before you complete it. Having your Social Security card stolen is one of the worst things that can happen as far as your personal information is concerned. Keep yourself safe, and get the card out of your wallet! Put it in a secure location in your home, like a lockable desk drawer, file cabinet or safety lock box.

2.) Receipts

This is by far the easiest way to accumulate paper in your wallet. Every single purchase generates a tiny slip of paper. Because you never know which might be needed later, you stick them all into your wallet or purse. Before you know it, you’ve got a novel-sized stack of transactions.

This could be serious trouble if your purse or wallet is ever stolen or lost. While regulations prevent retailers from printing more than the last four digits of your credit card number on a receipt, that could be enough for someone to start building a profile of your purchases, especially when used with the rest of your wallet, like your driver’s license. Thieves can use the last four digits of your card number to fish for more information with a merchant who has the card on file, like a cable company or an online retailer. While they may be caught once you report the card stolen, they’ll have all of the time in between to rack up charges.

If you’re in the habit of using receipts to track your purchases, think about going paperless. Use one of the dozens of mobile scanning apps to turn your phone into a digital filebox. This information can be encrypted to keep it out of the hands of malicious people, but still accessible to you if you need to check a purchase or balance your account.

3.) Tons of credit cards

Every store offers its own card and usually offers incentives to use it, too. Whether it’s a purchase discount or cash back, retailers really prefer to keep their credit card processing in-house. If you shop at a few of these stores, those cards can really add up. Tack on an extra couple of cards for gas purchases, everyday expenses, and work-related stuff, and you could easily end up with a wallet or purse chock full of plastic.

If your wallet or purse is stolen, though, each one of those cards has to be canceled individually. Forgetting even one can put you on the hook for hundreds or thousands of dollars of purchases. It’s best to thin your collection down to the one or two you use regularly. Look for those that can be widely used, provide the lowest fees and best acceptance rates. Put the rest of them into a safe place at home, using them only when you need them.

Once you’re down to your top cards, make a list of their numbers and the steps you’d need to take to cancel them if necessary. Put it next to your Social Security card in a safe place. That way, you know exactly what cards to cancel!

YOUR TURN: It’s time to think about what’s tucked into your purse or wallet. What items make your “essential carry” list and what can you safely leave behind?
SOURCES:

https://blog.mint.com/how-to/whats-in-your-wallet-and-how-can-you-clean-it-out-0214/

http://www.creditcards.com/credit-card-news/9-things-to-know-about-credit_card-receipts-1273.php

https://www.gobankingrates.com/personal-finance/things-never-keep-wallet/ 

Watch For These Product Recall Scams!

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When a company has to recall a product, it’s never pretty. Organizing refunds, exchanges, and other considerations for customers takes time. Meanwhile, the customers just want the product they bought to work as advertised. 

That combination of confusion and frustration creates the perfect opportunity for scammers to make an opportunistic buck. There are a number of ploys that criminals will use to steal money or information while using the cover of a product recall. 

1.) Discounted cellphones
 

If you’ve been following technology news, you know the Samsung Note 7 phones became so hot, they were melting on the inside. Samsung issued a product recall, stating you could just take your phone to your carrier’s store and exchange it for a new one.
Not everyone thinks that’s such a great deal, though. Either they’re not the original purchaser of the phone, or they bought it online and are having trouble getting the exchange. To recoup losses, they sell it online.
In the days after the product recall was announced, thousands of Note 7 phones went up on auction sites like eBay. They were selling for as little as half their market price. Getting 50% off a smartphone might sound like a good deal, especially when the seller promises the ability to trade it in for a phone of your choice. But buyer beware. There’s no assurance that second-hand buyers of the phone are eligible to participate in any refund program.
Before you buy a steeply discounted product, check to make sure there’s no recall on it. A quick online search should be all you need to see to it that the potential deal you’re getting isn’t going to blow up in your hands. If it feels too good to be true, it almost certainly is.
2.) Fake rebates
Sometimes, companies decide the best way out of a jam is to just write checks. They’ll compensate everyone who bought their product for the damages they caused, and move on to the next product. That’s been the strategy that car maker Volkswagen has employed in the wake of its emissions scandal.
Any time there’s money changing hands, scammers will be there trying to take advantage. In this case, it’s people trying to buy the recalled vehicles for less than the buyback price and hoping to turn a profit in the interim. In other cases, scammers have just posed as representatives of a company issuing a recall and pumped product owners for bank information so they could supposedly deposit the refund directly.
When getting a refund for a recalled product, only deal with the company directly. There are never processing fees or any other costs associated with getting a refund from a company, nor would any company refuse to send a check rather than making a direct deposit. If a product you recently purchased is being recalled, be proactive. Find out what steps you need to take to get your money, and take them. Then, you can safely ignore anyone who calls you with special instructions.
3.) Telephone number swaps
With large-scale product recalls, getting information from a company can be a headache. After all, everyone else who bought the same product is calling at the same time, and likely for the same reason. Long hold times can be a serious drain on your nerves and patience.
That was the thinking of a group of scammers after a major Toyota-issued recall. The scammers sent out an official-looking email instructing Toyota owners to call a number exactly one digit off from the official Toyota help line. Calls to this line were put on hold with a recorded message saying that all operators were busy. The message went on to explain that there was a premium help line available to recall participants. There was a $5.95 per minute charge attached to it, but that information went by so fast, many callers didn’t even hear it. Worse yet, people who called that fake premium helpline were then asked for personally identifiable information, like Social Security numbers.
Here, too, the best way to avoid being hooked in a scam like this is to do your own research. Find the company’s phone number yourself and call. Sure, you might have to wait on hold a while, but the alternative is to put yourself in jeopardy from scams like this one.
YOUR TURN: How do you deal with the frustration of a product recall? What tips do you have to keep your cool and keep yourself safe from scams like these? Let us know!
SOURCES:

http://bgr.com/2016/10/11/note-7-recall-ebay-refund-dont-buy/
http://www.scambusters.org/toyotarecall.html
http://www.scambusters.org/vwbuyback.html
http://www.thedailyscam.com/beware-auto-recall-notices/


How Can I Save On The Costs Of Raising A Child?

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You’re getting ready to bring home our own little bundle of joy. You’ve been
crunching numbers and don’t know how you can make the finances work without getting three or four more jobs, though! How can you save money while raising your baby?

Being a parent is demanding and exhausting work. It’s hard enough to work one job and juggle child care around normal adult responsibilities. What no one is fully prepared for, though, is the costs involved in raising a child.

New reports put the cost of raising a child from birth to age 18 at just over $300,000. That works out to over $16,000 per year. Of course, having children has rewards that are well worth the financial cost, but there’s nothing wrong with trying to trim those expenses. Here are four ways you can save on childcare costs:

1.) Use pre-tax dollars

While you may not be able to reduce spending in some areas, you can save money in the long run by taking advantage of a workplace benefit. If your employer offers a Flexible Spending Account (FSA), you can make an additional contribution to cover a variety of expenses related to dependent care. For 2016, parents are entitled to an additional $5,000 in contributions for a married couple.

Eligible services include medical care, day care, babysitting and even housekeeping, provided one of the duties of the housekeeper is child care. You can also use a dependent care FSA account to pay for delivery and other related expenses. Taking advantage of this program doesn’t reduce the costs of the services, but it does cut your tax bill at the end of the year. Unlike a typical FSA, a dependent care FSA can only reimburse you with money you’ve already spent. This means you may have to wait a while as the balance builds before you can take advantage of the program. Still, when coupled with programs like the Child Care Tax Credit, you can save money come tax time.

2.) Ask for hospital freebies, but skimp on extras

Young children, especially newborns and infants, need a lot of stuff. Between diapers, formula, skin cream and baby powder, those costs can add up quickly. Rather than rushing out to buy it all in the weeks leading up to birth, though, consider letting the hospital foot the bill for the basics.

Companies that manufacture baby products know their biggest source of revenue is in repeat customers. They’re eager for you to try their products, knowing you’ll definitely be in the market for more of it. In many cases, they’ve partnered with hospitals to provide new parents with a starter kit of everything they might need. The only catch is that people working in hospitals frequently forget to give them out. Be sure to ask someone working at the hospital if there are any samples of baby goods or coupons you can take home. This strategy can work from birth through early childhood; many pediatricians also partner with baby supply brands.

On the other side of hospital expenses, much of the cost of delivery may be optional. For instance, many hospitals have an incredible surcharge for private delivery rooms. In some cases, that surcharge can be as much as $500 per day! With nurses, doctors and family coming in and out, even so-called “private” rooms won’t offer much privacy!

3.) Think before you upsize

Growing families need growing homes. There’s no question about that. However, when it comes to timing that upsize, new families should think about their immediate needs. The hospital bills and other expenses can really take a bite out of your savings, making the months after childbirth a poor time to think about a new home.

Before you start shopping for a new house, ask around about how much space newborns actually need. Can a crib in an office or guest room work for the time being? It’ll be a few years before your child will need the privacy and independence of their own room, and your other housing needs may change in the interim. Hold off on moving until you’re in a better position to do so.

4.) Don’t let guilt win

Much of the baby products industry is built on guilt. No one wants to talk about money when it comes to things that might help a baby’s development. That’s how companies can get away with charging hundreds of dollars for plastic toys.

The inside secret is that babies don’t need your stuff. They need you. Children thrive in supportive, caring environments, not just those filled with the latest and greatest baby “learning” toys. So, when it comes to birthdays, Christmas or “just because” gifts, remember that the best gifts really are free. Spending time with your child is the most precious gift you can give.

YOUR TURN: Parents, what were your biggest spending regrets from early childhood? New and expecting parents, what are you most worried about for your new little bundle? Let us know in the comments!
SOURCES:

http://money.usnews.com/money/personal-finance/articles/2015/11/12/how-to-make-raising-kids-less-expensive
http://money.howstuffworks.com/personal-finance/budgeting/5-ways-to-save-money-raising-kids5.htm
http://www.bankrate.com/finance/personal-finance/save-on-costs-of-raising-children-1.aspx
http://www.parents.com/parenting/money/family-finances/32-ways-to-save-money-when-you-have-a-baby/

What Happened At Wells Fargo?

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The financial services industry is based on trust. When a company abuses that trust, the whole industry seems off kilter. While the details about the extent of the recent fake account scandal are still coming to light, we know enough to start painting a picture of what was going on inside the bank. Here are a few common questions about the scandal and what to do if you’ve been impacted by it. 

What was going on inside Wells Fargo
 

As a commercial bank, Wells Fargo generates revenue from each customer account. It could do this in a variety of ways: fees, low balance penalties or other charges. Whatever the cause, the bank made a little bit of money on each one. In an effort to maximize its revenue, the company established a sales quota for each of its sales teams. Individual salespeople and team managers were therefore under heavy pressure to meet an unrealistic goal and open new accounts.
Somewhere along the line, someone inside the organization decided the only way to meet these goals was through fraud. Eventually, fraud became a widespread corporate practice. It became standard procedure to open fake accounts using an existing customer’s information and then charge fees for services they never wanted or agreed to.
Worse yet, the company began actively silencing those who attempted to put a stop to this wrongdoing. Over the course of eight years, about 5,600 employees were fired for reporting this activity to the Wells Fargo ethics hotline or attempting to discuss it with human resources. Many of them were effectively blacklisted, preventing them from working in financial services again.
After this information became public, Wells Fargo CEO John Stumpf was forced to resign. All evidence suggests that he was aware of the situation and did nothing about it. The bank has been fined millions of dollars and is also being asked to issue refunds to many of its victims.
What can I do if I was a victim of fraud?
Most of the people who had fake accounts opened in their names have already been given a refund. While money can’t make up for the inconvenience or the sense of betrayal that occurred, those refunds are being issued automatically to most of the people who were affected. Wells Fargo is conducting an internal review to uncover the extent of the damage, and it’s extended its search back to 2009.
If you’ve done business with Wells Fargo, it might be a good idea to get a list of accounts that have been opened in your name during your time as a customer. You can do this by getting a free credit report at annualcreditreport.com.
Those hoping for a day in court will likely be disappointed. Several victims of the scam attempted to form a class action lawsuit against the bank, but the case will likely be thrown out. Wells Fargo account opening agreements specify that any disagreements must be settled through arbitration, and the court has previously held that this applies even to accounts that were opened through fraud.
Why did Wells Fargo do this?
Part of what set up Wells Fargo for failure was the profit motive at the heart of its business model. As a corporate bank, Wells Fargo has a first obligation to its shareholders. Any obligation it might have to its account holders is secondary; it only needs to maintain enough good will to keep customers coming back. That creates a conflict of interest between the desire to maximize profits with the safety and trust of customers.
Credit unions, on the other hand, are not-for-profit institutions owned by their members. Our shareholders and our account holders are exactly the same people. Our board consists of volunteers from within our community, not individuals seeking a payday. That allows us to always put the interests of our members at the forefront of what we do.
If you’re tired of a bank that treats you like a cash machine, maybe it’s time to give Destinations Credit Union a try. We offer the same services that commercial banks do, but with a model that’s based on putting members first. For more information about Destinations Credit Union, call, stop by, or click here to check out the many services we offer.
YOUR TURN: Have you ever been mistreated by a bank or other company? What did it do or could it do to regain your trust?
SOURCES:
http://www.thefiscaltimes.com/2016/09/22/What-Do-If-You-Were-Scammed-Wells-Fargo
http://money.cnn.com/2016/10/18/investing/wells-fargo-warned-fake-accounts-2007/http://www.fool.com/investing/2016/10/17/wells-fargo-beats-expectations-despite-fake-accoun.aspx