Category Financial Planning Topics

Aug 28 2021

Do you need identity theft insurance?

Victims of identity theft can be left with a bad credit record that can take months to correct. Here’s what you need to know about identity theft insurance and how to protect yourself.

  1. You may be covered

Some homeowners policies include coverage for identity theft. Check your policy or ask your agent to see if yours does. Other companies can add it to your homeowners or renter’s policy or sell you a stand-alone policy. These typically cost $25-$50 a year. Some credit monitoring services also provide identify theft protection or help with recovery.

2. What it includes

Identity theft insurance pays you back for what you spend to restore your identity and repair your credit. These costs can include fees, phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees. Some policies include credit monitoring and alerts and help you start the process to restore your identity. As with any insurance policy, make sure to know exactly what you’re purchasing and be sure to ask about deductibles and policy limits.

3. Is it worth it?

The U.S. Department of Justice reported recently that 7 percent of Americans were the victims of identity theft. Of those, half said it cost them less than $100, and 14 percent said they lost $1,000 or more. Banks and credit card companies already cover most or all losses due to fraud so most victims’ spend more time than money restoring their identity. However, complex cases can mean attorney’s fees and lost wages if you need to take off work, which could be covered by an identity theft policy.

4. How to protect yourself

You can take the following steps to protect yourself from identity theft:Be aware of your setting when you’re entering a credit card number or providing one over the phone. Make sure strangers can’t see or hear you.

Always tear up applications for “pre-approved” credit cards you get in the mail. Criminals may use them and try to activate the cards.

Never respond to unsolicited email that requests identifying data.

 For more information, click here.

Teaching Suggestions:

  • Ask students if they ever thought of purchasing identity theft insurance?  If so, did they purchase it or not?  What have been their experiences?
  • Ask students to make a list of steps to take to protect themselves from identity theft.

Discussion Questions:

  1. Why purchase identity theft insurance if it is already covered by your homeowners insurance policy?
  2. Under what circumstances is identity theft insurance necessary?  Is it worth it?  Explain.
Aug 14 2021

New IRS imposter scam targets college students and staff

If you’re a college student, faculty, or staff member, pay attention to this scam. IRS imposters are sending phishing emails to people with “.edu” email addresses, saying they have information about your “tax refund payment.” What do they really want? Your personal information.

Scammers are sending emails with subject lines like, “Tax Refund Payment” or “Recalculation of your tax refund payment.” The email asks you to click a link and submit a form to claim your “refund.”

What happens if you click the link? The website asks for personal information, including your name, Social Security number (SSN), date of birth, prior year’s annual gross income (AGI), driver’s license number, address, and electronic filing PIN. Scammers can use or sell this information for identity theft.

The emails can look really real and include the IRS logo. But no matter what the email looks like or says, one thing stays true: the IRS will not first contact you by email. They will always start by sending you a letter. And, to confirm that it’s really the IRS, you can call them directly at 800-829-1040.

If you clicked a link in one of these emails and shared personal information, file a report at IdentityTheft.gov to get a customized recovery plan based on what information you shared.

If you spotted this scam, the IRS is asking you to forward the email as an attachment to phishing@irs.gov and at ReportFraud.ftc.gov.

For more information, click here.

Teaching Suggestions:

  • Ask students if they, their relatives or friends have received such scam emails.  If so, how did they respond to the scam?
  • Why have imposter scams increased so rapidly in the last few years?  What, if anything, can consumers do to avoid such scams?

Discussion Questions:

  1. Why is it important not to click on the links, even if they seem to be legitimate?
  2. If you clicked on such a link, what steps should you take to protect yourself and others from being scammed?
Jul 31 2021

Family lending and borrowing

It is natural to turn to people close to you for help when you need it and to want to help others. However, sometimes unclear communication or misunderstandings can cause strain on your relationships and unnecessary financial hardship

Informal money arrangements among friends and family are very common.  Research has shown that as many as one in five U.S. adults receive financial support from friends or family, and up to one in three U.S. adults provides support to others. During times of crisis, these support networks can provide timely help.

Discussing financial arrangements among friends and family can help reduce strain. It may feel awkward to have a frank conversation, but remember the goal is to come up with an arrangement that works for everyone involved. This will help prevent more difficult conversations later. Below are a series of questions that can help you work together to solve problems and maintain strong relationships.

Asking someone if you can borrow or share their resources

Before you approach your friend or family member with your need or request, take a short time to think through all of the information you need to share and what the results could be of your request. You should be ready to provide clear answers about your situation. This can help you have a better conversation – and potentially a better outcome for your finances and your relationship. Ask yourself:

  • What exactly am I asking for?
  • Do I have other ways to meet those needs?
  • How would my relationship to this person change if they agree – or if they turn me down?
  • Do I have the ability to pay this person back?

Be realistic, and be honest with yourself, and the other person.

Has someone asked you for money or support?

Before you respond to a friend or relative who asks you to share or lend resources, pause to think it through first. Ask yourself the questions below, and then see if you need to clarify your understanding with the other person:

  • Am I being asked to give a gift that will not be paid back, or provide a loan that will be paid back?
  • How could this affect my own money situation, in the short and long term?
  • How would my relationship to this person change if I agree – or if I turn them down?
  • If it is a loan, what happens if they don’t pay it back?
  • If it is a loan, do I need it to be paid back with money, or are there other ways to be repaid – for example, can I accept other services like childcare, transportation, or something else in exchange?

Again, be realistic, and honest with yourself and the other person.

 If you can, write out what everyone has agreed to and give everyone a copy to refer to later. Whether you write it down or not, your agreement should answer the following questions:

  • Who is providing what (money, time, services, or something else) to whom?
  • How much, how often, and for how long?
  • Is this a one-time exchange, or happening on a regular basis?
  • How and when will the lender be repaid?
  • When will the arrangement be considered done?
  • When or how often will you check in with each other?
  • What happens if circumstances change?

For more information, click here.

Teaching Suggestions:

  • Under what circumstances should you borrow from family members or friends?
  • Ask students if they have borrowed or have lent money to family members or friends.  If so, let them share their experiences.

Discussion Questions:

  1. Do loans from family or friends complicate family relationships?  Explain.
  2. Why should all loans to or from a family members be in writing and state the interest rate, if any, repayment schedule, and the final payment date.
Jul 17 2021

FINTECH AND FINANCIAL WELLNESS

MoneyLion offers a low-cost financial service tool that integrates investing, banking, lending, and financial wellness. Using the brand name RoarMoney, the company also offers a virtual debit card for contactless payments and Instacash with a free overdraft service.  With Money Lion’s Shake N’ Bank program, customers earn cash every time they spend $10 or more with their bank card. To determine the amount they get back, users literally shake their phones and a random amount up to $120 shows up.

To guide financial wellness, the Financial Heartbeat program of MoneyLion rates customers from 1 to 10 on these categories:

1) Save measures financial preparedness; how well a person can pay expected and unexpected expenses. 

2) Spend measures purchasing in relation income available.

3) Shield determines how well you understand and organize your insurance needs and coverages.

4) Score creates a Bottom of Formcredit score to assess overall credit health based on debt usage and interest rates paid.

For additional information on FinTech and financial wellness, click here.

Teaching Suggestions

  • Have students talk to others to learn about the features of banking and money management apps they have used.
  • Have students create a visual proposal (poster or slide presentation) for an app that would help people better manage their money and improve their financial wellness.

Discussion Questions 

  1. What features of an app or FinTech product might help people improve their financial wellness?
  2. Describe actions a person might take to evaluate an app or FinTech product.  

Jul 3 2021

STIMULUS CHECKS USE

As a result of the economic difficulties during the COVID pandemic, many Americans received government stimulus checks. These payments were designed to minimize or avoid financial difficulties.  

Recipients of the first two stimulus checks used the majority of funds for daily living expenses with food and utilities as the top items. Those who received the third check had some significant changes in their use of the money.  An increased portion was used to pay off debt and for savings, including money set aside for an emergency fund. This trend indicated that many households experienced improved financial stability. However, among lower-income groups the third stimulus check was still needed for monthly bills and day-to-day essentials.  

People continue to be in need of a cash cushion. Financial advisors recommend using money from stimulus checks or tax refunds to pay off high-interest debt and for an increased savings account.  While many households have are better off than they’ve ever been and improving further, millions of others face ongoing financial hardship.  

For additional information on stimulus check use, click here.

Teaching Suggestions

  • Have students talk to those who received stimulus checks to obtain information how the money was used.
  • Have students describe a research system that might be used to determine the spending, saving, investing, and credit use habits of various groups of consumers.

Discussion Questions 

  1. What are reasons people are unable or unwilling to practice wise money management?
  2. Describe actions that might be taken to prepare for unexpected financial difficulties.
Jun 5 2021

Managing your credit report

The three nationwide consumer reporting agencies–Equifax, TransUnion, and Experian–will provide one free credit report every 12 months if you request it. As a result of a 2019 settlement, all U.S. consumers may also request up to six free copies of their Equifax credit report during any twelve-month period through December 31, 2026. These free copies will be provided to you in addition to any free reports to which you are entitled under federal law.

If you run into difficulty getting your free Equifax, TransUnion, or Experian annual credit report(s) from AnnualCreditReport.com or its toll-free phone number, try contacting the respective institution(s) directly for help:

  • Equifax, (866) 349-5191 (Option 3)
  • TransUnion, (800) 680-7289 (Option 1)
  • Experian, (888) 397-3742 (Option 2 followed by Option1)

Freeze your report

Each of these companies offers you the option to freeze your report with them if you request it. By law each must freeze and unfreeze your credit file for free if you request it. You also can get a free freeze for your children who are under 16. If you are someone’s guardian, conservator or have a valid power of attorney, you can get a free freeze for that person, too.

Free Credit Monitoring for Military

Equifax, TransUnion, and Experian provide free credit monitoring services to active duty service members and to National Guard members, by visiting the active military web pages of each company.

For more information, click here.

Teaching Suggestions

  • Ask students if they or their families have requested their credit report(s) recently.  If so, what was their experience?
  • Ask the students to make a list of circumstances that will lead them to freeze their credit reports.  When should they consider unfreezing reports?

Discussion Questions

  1. When might it be necessary to freeze or unfreeze credit reports for children who are under 16 years of age?
  2. Should federal government require nation’s credit reporting agencies to provide free credit reports to consumers?   Explain your answer.
May 22 2021

High Medical Costs: How to save money on the doctor

Asking a few questions about your health insurance and knowing your options can protect your wallet after a doctor’s visit.

1.    Know your options

How much you’ll spend at the doctor depends on what type of doctor you visit. Most plans will cover a phone call with a nurse, an online doctor visit, or visits to a doctor’s office, an urgent care clinic, or a hospital emergency room. Nurse lines and online visits are usually cheapest (and often free). Emergency rooms are the most expensive.

2.    Ask if the doctor is in your plan’s network

Most health plans have a network of doctors, specialists, and other providers. You’ll pay more if you get care outside the network. Ask your health plan if the doctor, facility, or hospital you want to visit is in your network. If you go to a doctor outside your network, ask the doctor about the cost. Some might be willing to negotiate lower prices with you.

3.    Ask how to save money on prescriptions

Most plans have a list of drugs that they will pay for. The list also shows how much you’ll have to pay. If the drug is too expensive, ask your doctor if there’s a generic version. If you choose the brand-name drug, there may be coupons or discounts that can save you money. Ask your pharmacist where you can find coupons.

4.    Ask questions if you get a bill

If the visit was covered by insurance, don’t pay more than the explanation of benefits from your health plan states you may owe. If the bill was for more than you were expecting, ask the doctor or facility for an itemized bill. Look for errors or duplicate charges. Call your health plan if you have questions. You can also ask the doctor for a discount or an interest-free payment plan.

Resources

For more information, click here.

Teaching Suggestions

  • Ask students whether they or their family members have requested from their physician and pharmacist if a less expensive drug is available?
  • Are you aware that many states offer state pharmacy assistance programs that help pay prescription drugs based on financial need, age, or medical condition?

Discussion Questions

  1. Have you considered using a mail-order or legitimate online pharmacy for your prescriptions, especially if you will take a drug for a long time?
  2. What are your options to get the medical care you need and avoid a big bill?
May 8 2021

Insurance tips following storms

If your home was damaged by the severe weather, contact your insurance company or agent to file a claim as soon as possible. These tips will help you make the process go smoother:

  1. Keep a list of everyone you talk to at your insurance company.
    Be ready to answer questions about the damage.
  2. Make a list of damaged property.
    Take pictures or videos. Don’t throw anything away until your insurance company tells you to do so.
  3. Take steps to protect your home from further damage.
    Cover broken windows and holes to keep rain out and prevent vandalism or theft.
  4. Try to be there when the insurance company comes to inspect the damage.
    If you can’t stay in your home, leave a note with information on where you can be reached.
  5. Ask your agent about additional living expenses.
    If you’re forced out of your home to make repairs, your insurance policy may pay for some of those expenses.
  6. Avoid fraud (with the following recommendations):
    • Get written estimates.
    • Get more than one bid
    • Beware of contractors who solicit door to door.
    • Check references and phone numbers.
    • Don’t pay up front.
    • Avoid contractors who offer to waive your deductible or promise a rebate for it.
    • Never sign a contract with blank spaces.

For More Information, click here.

Teaching Suggestions

  • What actions should you take to protect your property before a severe storm and floods?
  • Make a checklist of actions that you should take after the storm?  Share the list with other students.

Discussion Questions

  1. Under what circumstances is it better not to file a claim?
  2. If you file a claim and your insurer rejects it, what are your options?  Who should you turn to for assistance?
Apr 25 2021

What is a Robocall?

If you answer the phone and hear a recorded message instead of a live person, it’s a robocall.  Americans have seen a significant increase in the number of illegal robocalls because internet-powered phone systems have made it cheap and easy for scammers to make illegal calls from anywhere in the world, and to hide from law enforcement by displaying fake caller ID information.

To date, the Federal Trade Commission (FTC ) has brought more than a hundred lawsuits against more than 600 companies and individuals responsible for billions of illegal robocalls and other Do Not Call violations.

The FTC also is leading several initiatives to develop technology-based solutions. Those initiatives include a series of robocall contests that challenge tech gurus to design tools that block robocalls and help investigators track down and stop robocallers. The FTC also is encouraging industry efforts to combat caller ID spoofing. Here’s the FTC’s game plan to combat robocalls:

  • continue aggressive law enforcement
  • build better tools for investigating robocalls 
  • coordinate with law enforcement, industry, and other stakeholders
  • stimulate and pursue technological solutions.

For More Information, click here.

Teaching Suggestions

  • Ask students how they or their families respond to robocalls.  Has the number of robocalls increased in recent months?  If so, what might be the reasons?
  • Ask students to make a list of actions to take in combating robocalls.  Share the list with other students.

Discussion Questions

  1. Should you consider reducing unwanted sales calls by submitting your phone numbers to the National Do Not Call Registry?
  2. Why doesn’t the National Do Not Call Registry stop robocalls?
  3. Are robocalls legal?  What kinds of robocalls are allowed without your permission?
  4. How can you manage to get fewer robocalls?
Apr 17 2021

SCAM TRACKING MAP

Not everyone will be a victim of fraud, but everyone is a target. The AARP Fraud Watch Network offers a scam-tracking map to report fraud activity based on user-submitted information.

To help protect yourself and others, people are asked to report a scam they encounter.  The online form requests your zip code, method of contact (advertisement, door-to-door, Internet, e-mail, U.S. mail, or other), the type of scam, and the amount of money lost to the con artist. The list of scams includes more than 50 types, ranging from debt collection and charities to contests and online auctions.

Further assistance in reporting a scam is available at 1-877-908-3360.  AARP warns that it does not independently verify scam reports, nor guarantee the accuracy of reported scams.

Commonly suggested actions to avoid being taken by a scam include:

  • Only do business with reputable companies.
  • Understand contracts or other documents you sign.
  • Beware of impulse buying; con artists often tell you this is your last chance.
  • If it sounds too good to be true…it probably is!
  • STOP…WAIT…THINK…DON’T!

For additional information on the scam tracking map, click here.

Teaching Suggestions

  • Have students locate examples of current scams that have surfaced in their area.
  • Have students create a video with suggested actions to take to avoid being taken by a scam.

Discussion Questions 

  1. What are reasons that some people are easily deceived by frauds and scams?
  2. Describe actions that might be taken to avoid scams and fraud.