Do As I Say, Not As I Do

I am sure there are many that have heard me say, “If it sounds too good to be true, it probably is.”  We are all looking for a good deal. So, how do we know when a good deal is too good to be true?

I was looking for a piece of technology that usually sells for a little more than $400.  I found a used one for sale on-line, and I looked up reviews for that product. There were some who did not like this item because the feature they wanted came with a monthly fee. Because of this one reason, several had returned the item for a full refund. I was not interested in those features so the thought of picking up a used one for less cost was appealing.

RED FLAG #1: BUT, is buying a used one for $50 (when new is $400) too good to be true?

I checked the reviews of this particular seller…he had a 4 out of 5 star rating. There were no complaints against him as a seller. He was located in Georgia (not overseas). But still…could it be too good to be true? I decided to order it.

RED FLAG #2:  As soon as I placed the order, I received confirmation and notice that I would receive my order in THREE WEEKS. (In the past, this online company’s policy was that refunds would not be issued after 3 weeks)

Just as I was about to cancel the order, I received an email telling me my package had shipped, along with information on how to track my package. It included the little graphic from the US Postage Service showing the progress my package was making.  I was relieved and did not cancel my order … but in the back of my mind I still had concern that it was too good to be true.

Over the next three weeks, I continued to check on the progress my package was making through the LINK PROVIDED BY THE ONLINE COMPANY. I assumed the link took me to the tracking system inside the US Postal Service. Three weeks came and went and there still was no package. I checked at the post office and there was no record of the package. AHHHH! I went to the online company to file a complaint and found 12 other people had also filed complaints for the same item.

The good news…the online company gave a full refund.

I am truly amazed by the sophisticated schemes scammers are creating to prey on the trusting. I thought I had put in the due diligence (checked ratings, reviews, address of seller, etc.) but still…IF IT SOUNDS TOO GOOD TO BE TRUE…it probably is.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

Does Debt Technically Have an Expiration Date?

If you answered YES, you are correct – but be cautious in how you use that information.    

The statute of limitations on debt is the legal length of time during which creditor can sue a borrower for repayment of debt; the clock starts ticking at the time when the borrower breaches the contract.  It varies from state to state and by type of debt.  In Iowa, debt expires in 5-10 years, depending upon the type of account; the statute of limitations on court judgments, on the other hand, is 20 years.

It is a mistake to conclude that the statute of limitations is a solution to your money woes.   Here are a couple of reasons why:

  1. Expiration dates have nothing to do with how long an unpaid debt appears on your credit report – that time limit is 7 years.  One way to check on your outstanding accounts is to pull your credit report (free) from AnnualCreditReport.com.  Typically, any negative credit items in the last 24 months of your credit history will have the greatest impact on your credit score and ability to get a loan.
  2. In some situations creditors or debt collectors have successfully sued to recoup an unpaid balance, even after the statute of limitations has expired.  This may be especially likely if you do not appear in court to defend yourself.

Even if the statute of limitations has expired, a debt collector may still contact you to try to collect on the debt. However, if you give a written notice for the debt collector not to contact you, the law prohibits them from doing so.

If you have an old debt, should you pay?  Paying off the debt will remove the unpaid balance from your credit report, so paying the debt may improve your credit history.  However, it’s wise to be cautious, especially if you cannot pay the bill in full; if you make a partial payment on an old debt, you may “restart the clock” on the statute of limitations.  In that case, the creditor would again be legally entitled to take you to court to collect on the debt.

If you have relocated to a different state, but you have a debt in the former state, you may need to consult a consumer law attorney to find out which state’s statute of limitations will apply.  Other sources of legal information related to debt collection include reputable Consumer Credit Counseling agencies, the Iowa Concern Hotline (800-447-1985) or Iowa Legal Aid  (or Legal Aid in another state).

It is wise to be aware that debts have statutes of limitations; it is also wise to remember that outstanding debt appears on your credit history for at least 7 years.

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

More Posts

Garden Time

This weekend I’m going to do some planting.  I’m not a great gardener.

Just a couple weeks ago I listened to a co-worker (a horticulture specialist) answer some questions about problems people have with their tomatoes.  And I cringed when I heard her mention something I frequently do: crowd my tomato plants closer together than they should be. Overcrowding is a problem because, with less space for air to flow between plants and keep the leaves dry, it opens the door for growth of organisms that cause disease.

I already knew that overcrowding tomatoes was a mistake.  But in spite of that, I often yielded to the temptation to try to squeeze in a couple more tomato plants.  (My co-worker reminded me that if I want more plants than I have room for in my garden, I can always grow some in containers.)

To get the most benefit from the time and money I put into my garden this weekend, I will do well to follow research-based information on gardening.  Fortunately I have access (and so do you) to wonderful information about gardening through Iowa State University Extension and Outreach.  In addition to a vast library of on-line information, we also have a Horticulture Hot Line (515-294-3108), where experts can answer your specific questions.

When it comes to gardening, it isn’t always smart to follow my instincts — in past years my instinct to squeeze in extra plants has probably resulted in fewer tomatoes.  That concept is true in money management too — our instincts are not always our best guide.  We’ll do better to invest time in clearly thought-out goal-setting and planning, and then use tested tools and strategies to help us follow those plans.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

How Would Tax Law Changes Impact You?

Everyone is subject to tax laws, so we all have a reason to pay attention to proposals that are being discussed in Washington DC. When changes are introduced, it’s human nature for proponents to emphasize the positive and omit details that might disappoint.  As citizens and consumers, it is wise for us to look beyond the “selling points” and examine the details.

One proposal is to raise the standard deduction and eliminate personal exemptions. Analysis of the proposal by a respected non-partisan organization points out that the move would benefit single individuals and couples, but not large families. It remains to be seen if changes in child care credits will equalize the loss of additional personal exemptions.

Changes in tax rates also have hidden impacts. Analysis once again raises the question of where the income breaks will occur. Using the current tax table, adjusted gross income between $15,000 and $19,625 is taxed at 10%; under the proposed changes, that group would see an increase to 12%.

When deciding on a traditional versus Roth retirement account, one factor individuals consider is whether they expect their taxes to be higher or lower during retirement. If you currently pay taxes in the highest tax brackets, there is a good chance you will see a reduction in tax rate after you retire. Analysis indicates that under the proposed changes, a similar reduction may not be experienced by individuals in the middle or lower income brackets.

We will need more details before we can determine how proposed tax law changes may impact us; in the meantime you can learn what experts in the field predict at the Tax Policy Center.

Joyce

 

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

More Posts

Living Independently following Graduation

Graduation from high school and college is a milestone event for many families in May. Parents might feel that their role as a financial provider is nearing it’s end, but recent data indicates that youth are living at home longer.

Reasons for this trend extend beyond financial reasons. The Boston Federal Reserve report includes a willingness on the part of parents to be more supportive and a trend toward larger homes as additional factors.

Being supportive can extend beyond putting a roof over a young person’s head and food in the refrigerator. It can include teaching the value of setting aside funds earned today for the future.

MyRA  might be a place to start. If a student is employed part-time or in a temporary summer job, they can save in this Roth account which is low risk and pays a higher return than a pass book savings account.  Because it is a retirement account, it isn’t a factor in determination of student financial aid and the rules make it less likely to be raided for spur of the moment expenses. You are expected to leave the money in the account for five years before making a withdrawal of contributions, a time frame that might work well for a high school graduate who intends to earn a college degree and might need a cash reserve when they reach the next milestone.  Introduction to retirement savings also makes sense for a generation that is less likely to see benefits from pensions and social security. Learn more at MyRa.gov

Joyce

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

More Posts

Supply and Demand

I love Honey Crisp apples…but not the premium price. I love to visit family for holidays…but not high plane ticket costs. I love fresh vegetables but settle for canned during the winter months because the price of fresh produce during that time of the year can be expensive.

The Law of Supply and Demand greatly affects my shopping habits and attitude. I choose to see Supply and Demand as a game, in which winning equals a savings to my pocketbook.  When fruits and vegetables are in season, the demand is less than the plentiful supply…thus, prices are lower. That is the time I enjoy fresh fruits and vegetables; I also freeze sweet corn, and buy bushels of green beans and tomatoes from a local auction house to preserve.

Most seasonal variations, such as plentiful supplies of fruits and vegetables throughout the summer, are predictable.  I plan ahead and schedule time to take advantage of what each season has to offer; the result is good use of my time AND a savings to my grocery bill.

Occasionally, something unpredictable affects Supply and Demand and, therefore, prices.  I was recently looking at August 21 ticket prices to fly to Boise to visit family…shopping a full 5 months before the time of travel. Typically I can get a good ticket price when I make reservations early, so I shop early, knowing that prices will increase as the departure date comes near.  With five months to spare, it made no sense to me that ticket prices were very high on the days surrounding August 21.  A little research revealed that Boise is the location for optimal viewing of a solar eclipse on August 21. Flights and motel rooms are already fully booked by scientists and amateur astrophysicists.

If I book a flight around August 21, I would have to consider that a “loss” for me in the Game of Supply and Demand. I have a choice: I can either pay the higher price OR look for a different weekend to visit Boise.

As for Honey Crisps apples…I have not found a time where the price is in my preferred price range.  Do you have any suggestions?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

Look for Money Smart Week Activities in Your Community April 22-29, 2917

Money Smart Week, started 15 years ago by the Federal Reserve Bank of Chicago, is designed as a public awareness campaign to help consumers better manage their personal finances. There are Money Smart Week programs in every state. Here in Iowa, more than 200 partner organizations have joined in the fun to promote financial education and to provide learning opportunities.  All Money Smart Week programs are free, and strictly educational (no marketing allowed).

ISU Extension and Outreach has been a MSW partner for many years.  Educational programs are offered for all ages, from preschoolers to seniors.  Activities like scout nights, shred events, essay and poster contests, geocache for college cash, piggy banks, books, kites, and chances to win prizes make the learning fun.  Educational program topics include establishing a budget, protecting financial information, raising money-smart kids, and more.

Check the website www.MoneySmartWeek.org for more details about activities in your communities.  Check your local library for a display as well as programming.  Spread the knowledge!

 

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

More Posts

Social Security Matters – at any age

April is National Social Security Month.  It’s really fitting that they chose April, because April is also Financial Literacy Month.  And understanding your Social Security situation is an important part of Financial Literacy.

If you’re under 40, you may be surprised to consider that you need to pay attention to Social Security. (Even some people under 60 may be surprised at that idea!).  Now I’m not suggesting you need to fully understand Social Security – that’s a tall order.  But you do need to be aware of your own social security record and what it means.

The key your record is found at my Social Security.  Here you can activate your own on-line account so that you can log in any time; this lets you verify the accuracy of your earnings record, learn what you can expect in retirement or disability benefits, order a replacement social security card, and more.

Why it matters. On average, Social Security replaces approximately 40 percent of pre-retirement earnings. To enjoy a comfortable retirement, most people will also need income from other sources — like pensions, savings, and investments. Understanding your social security projections can help you make informed plans for your own retirement.

Throughout the month of April, the Social Security Administration will boost its outreach through traditional media and social media, including a Facebook Live Chat:

Social Security will participate in a Facebook Live Chat, hosted by USA.gov, on April 20, 2017, at 7:00 p.m. ET. The public may ask questions via livestream about the “5 Steps Toward Financial Security.”

To participate, follow USA.gov and Social Security on Facebook.

NOTE: some young adults may be skeptical, questioning whether Social Security will still be around by the time they retire.  While Social Security will likely change over the next 2-4 decades, you will not find any experts who believe it will disappear.  Understanding your situation under current law will help you understand policy changes as they are proposed and enacted.  No matter your age, it’s smart to activate your Social Security account and see what it tells you.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

Hidden Fees

I’ve never purchased a cell phone plan with confidence that the price in the initial offer was going to be the bill I received at home. Some added costs can be explained by taxes or fees that support universal access, but others are hidden fees that you don’t learn about until the first bill arrives.

Hidden fees are common with new car purchases, event tickets, resort/ airline reservations, banking services, cell phone/media plans and post-secondary education. They are a way to generate additional revenue. Studies of consumer spending show that consumers are more likely to buy an item or service that appears to cost $80 with $20 added later as compared to an item or service with an outright price of $100. Consumers stop looking for a lower price and the momentum of having made a selection and signed a contract, keeps us from backing out on the sale.

For some consumer products and services, states have passed legislation that caps additional fees and amounts that can be added after a sale. Unfortunately this doesn’t solve the problem. Consumer research has found they become sticky price additions: the seller tacks on the maximum allowed by law or leaves the fees in place regardless of whether the additional funds are necessary.

As a consumer the best action is to read before you sign the bottom line and exercise your option to walk away from the sale. The Federal Trade Commission regulates this area of consumer pricing. Filing a complaint can result in fines and fair disclosure of fees by merchants.

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

More Posts

Fun Things To Do With Your Tax Refund

We are in the middle of tax season and you may be anticipating a chunk of cash back from Uncle Sam. You may have identified paying some bills, or making an investment.  You may want to try a few of these suggestions:

  • Donate to a charity, like a local animal shelter, homeless shelter, or another group you would like to donate some funds.
  • Update a room – furniture, paint, might be the way to go.
  • Pay off a car – If you have enough in your refund – you could free up some cash in the future by paying off your car payments early.
  • Take a trip – weekend getaway or a resort spa weekend.
  • Clear your Credit Card Debt – take your outstanding balance down to zero and start your financial freedom.
  • Tackle a Hobby – What to learn how to play golf, or ride a horse, cooking classes – develop a new hobby.
  • Help Someone Out – Gift some money to someone who is down on his or her luck.
  • Fill the Pantry – stock up on everyday necessities. Use some digital coupons to save even more.
  • Upgrade your Electronics – New cell phone, tablet, TV or laptop – look for refund sales at the store.
  • Tuck it away –put some cash in bank for a “rainy” day – The cushion will help you out.
Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

More Posts