Strong Passwords

I recently received word that my cellular company had a security breach. In the past three years, I have received replacement credit cards 3 times because of a similar scare. We all most likely remember the negative publicity certain major retailers received around the holidays because of credit card issue, AND I just read about a major hospital accidentally posting personal information on a web site.  None of these examples are due to mistakes made on the part of the consumers. Despite the fact that all of these companies have departments full of individuals whose full-time job is to protect the sensitive information of those using their services, they still face challenges staying ahead of identity thieves.

For this reason, it is important to use a STRONG password for your online accounts; one that will be difficult for others to guess. Knowing that it is recommended that passwords be changed monthly or at least several times a year, here are a few tricks that will make remembering easier.

Using a phrase or string of seemingly random words (that mean something to you) is one way to create a password. When using a phrase, consider using capital letters at the END of each word (instead of at the beginning). Subbing a symbol in place of a letter is another way to make a password secure. For example: @pplEp1E&1cEcre@M (apple pie & ice cream is my favorite dessert). I replaced all the A’s with the @ symbol; the last letter of each word is capitalized and all the I’s are changed into the number 1. Another trick would be to remove all the vowels from my phrase, Apple Pie & Ice cream becomes pplp&ccrm.

Once you settle on a password, a number could be added at the beginning or end.  Then each month when you change the password, you could keep the phrase portion of the password, and make the change to only the number…maybe increasing or decreasing by 1 number.

Share strategies you use to make changing and remembering passwords easier.

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.

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Who Has Your Real Credit Score?

When you look at your credit score from your credit card company – you would think it is your “real” credit score.  Whether you paid for your score or not, the score is probably different from what the lender gets.

Recently, the Consumer Financial Protection Bureau (CFPB) announced an enforcement action against two of the credit reporting agencies by deceiving consumers about the value of the scores sold.  In their advertising, Equifax and TransUnion have falsely represented that the credit scores they marketed were the same scores lenders used to make credit decisions.  The scores sold by TransUnion and Equifax were not typically used by lenders to make those decisions.

As part of the action, the companies will pay more than $17.6 million in restitution to consumers, and another $5.5 million in penalties to the CFPB.

CFPB wants consumers to realize there is no one magic three-digit number that lenders use to assess borrowers’ creditworthiness and set rates.  The scores you see can vary widely from source to source – as much as 40 points.

Why do scores vary?

Score type – Different models are used for each credit-reporting agency.  Many lenders use FICO or VantageScore brands.  Each model gives different weight to factors like how much of your available credit you’re using and your payment history.

Customization – Lenders “weigh” different factors like credit card debt or car loans.

Credit-scoring company – Use data pulled from your credit report at one of the three major firms.  Information will vary and there may be errors.

Score version – Scoring models are updated regularly, every 15-60 days – so the lender may not have the most current version.  Mortgage lenders tend to use older models.

Timing – Your score can change daily as the information on your credit report changes.

Variation doesn’t mean you shouldn’t pay attention to your score(s), there are free ways to take a look, including third-party sites and a perk from your credit card issuer.

Every credit score that’s given away or sold to consumers has value.  You’ll be able to see whether you have a good or poor score regardless of the brand.  The key takeaway is any information provided with your score indicating why the number is what it is.  This information tells you what actions you might take to improve your creditworthiness.

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.

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(Financial) Independence Day

Each year we celebrate our nation’s independence and honor the work and sacrifice of those early Americans who made it possible.

Independence (or Freedom, or Liberty – pick the word you like best) isn’t something that just happens.  It takes work, and, yes, sacrifice.  Are you working (and even sacrificing) to achieve your own financial independence?

Personally, I am planning that the day I fully retire will be my “independence day”  – the beginning of the time when I have the freedom to spend my time as I wish, without worrying about living up to the expectations of my employer.  I will have the liberty to spend (or not spend) as I see fit, writing my own paycheck as I see fit. I haven’t set the date yet – it’s 5-10 years away – but I believe that the work I’m doing now and the sacrifices I’m making now will pay off with a new level of liberty, which I will enjoy!

Of course, I will not have unlimited freedom.  I will still need to live within the laws of the land and pay my electric bill if I want to keep the lights on.  But I expect to have considerable freedom to travel and enjoy some leisure activities that are meaningful to me.

What are you willing to sacrifice to ensure you have the freedom you want when you retire?  Check out Retirement Secure Your Future and the Ballpark Estimate of Retirement Savings Needs to move forward toward your independence day!

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.

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Fireworks!

Congratulations Iowa, you can now legally purchase and use consumer grade fireworks for 4th of July and New Year celebrations! In Missouri, consumer fireworks have been legal during my entire lifetime. My children and grandchildren have enjoyed the best of two worlds. Learning how to safely use fireworks during visits to family 4th of July gatherings in Missouri and, when the calendar worked out, coming home to Iowa to attend a hometown display. That’s my son when he was allowed to light his first bottle rocket, with adult supervision! The Iowa Fire Marshal offers safety tips and rules for use. So far no one has shared my Dad’s classic, “Make sure you don’t catch the wheat field on fire!”

If you are operating on a tight budget, fireworks can be an expensive addition. Determine how much you can spend before shopping and leave children at home or prepare them ahead of time with instructions not to ask for everything!  Our family has worked out a shared responsibility plan. My brother and sister purchase night time fountains and rockets and I am in charge of daytime tanks, poppers, and frogs that never jump! Neighbors always enjoyed our choices.

We’ve learned that bigger isn’t always better. Smaller versions of fountains will produce a display that is just as attractive, but may last for a shorter time. Sometimes the extra cost was to purchase a taller cardboard tube. Multiple tubes also have a greater chance of having a faulty fuse and only half the display is fired. It doesn’t happen often, but when it does, it’s an expensive disappointment.  If you can check out prices at several locations you’ll find they do vary. Don’t be fooled by the large DISCOUNT or Buy 1 Get 1 Free sales, common marketing for fireworks stands.  If you know the salesperson, ask for tips and their recommendations, many times they have sampled the inventory and can guide you to better choices.

Public firework displays in your hometown are the best way to save a July budget!  Safety first everyone, and enjoy the holiday!

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.

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“Dollar” Stores

Joyce and I have both referenced, in the past, our concern for the elderly not having access to quality food in the small rural communities we live in. It is understandable that a business would not choose to locate in a small community because foot traffic, which they depend on for success, would be limited. For this reason, I was quite surprised to see a “dollar” store being built in one of the small towns in my county. It happens to be in the town my son lives in. He is quite excited about its arrival and now sees no reason to ever have to go beyond the perimeter of the big city located 15 miles down the road.

I had not been in a “dollar” store for quite a while because my past experience told me they were full of trinkets and stuff I didn’t need or want, so I was surprised by my son’s reaction.  His favorite store (located on the near edge of the big city) carries auto, mechanical and construction tools and supplies; why would he be interested in a “dollar” store?  It turns out he sees it as a way to get everything else!

It appears that “dollar” stores have reinvented themselves. When I visited their web site, I found they now carry a lot of basic groceries…coffee, cereal, toilet paper, flour, cold and allergy medicine, shampoo, diapers…you get the drift. Though everything in the store is not available for a dollar, their prices are cheaper than those in the big-city stores…partly because they are not name-brand products. And, not only that, they also offer digital coupons and online shopping.

The arrival of this “dollar” store to this small rural community is a step in the right direction toward serving the needs of the elderly who find transportation a barrier to basic grocery needs. It does give access to canned fruits and vegetables, but, as far as I can see, it still does not bring quality, unprocessed meat any closer to their homes. I will be curious to see if people in the other 4 or 5 small communities surrounding the “dollar” store find ways to shop there. The drive would be closer and less intimidating than driving to the big city.

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.

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What Draws You In While Surfing And Shopping On The Web?

Are you drawn in by emails from e-commerce sites in your inbox urging you to click and spend?  Or by ads you encounter while surfing? Are there ways to resist the temptation?

A CreditCards.com survey found that five in six Americans admit to impulse buying, with an increasing number of those purchases occurring online.  One in three Americans admit they have made impulse buys in the past three months using a computer, tablet or smartphone.

Retailers use analytics to track our preferences and show us digital ads that match our preferences; this strategy increases the amount of temptation we face online.  If you find yourself occasionally falling victim to online shopping madness, here are six tips to stop the shopping madness!

Block the Promotions – Unsubscribe from online retail email lists and delete shopping apps from your phone, tablet, and laptop.  The less you see, the less inclined you are to spend.

Do not Store your Credit Card information on a Shopping Site – Yes it is easier, you loss control of your information on another companies site. If you have to plug in credit card information, you might think twice before the purchase.

Shop with a Purpose – Shop only when you know exactly what you need.  Make a list, and before for you hit the buy button wait at least 30 minutes – or sleep on the decision.

Look for a Different Kind of Emotional Lift – Replace retail therapy with different types of experiences that make you feel good.  Volunteer, go to the gym, or call a friend to improve your mood.

Shopper, Know Thyself – When do you shop?  Identify when you are most likely to shop and shut off the computer during those times.

Get Help – About 6% of the U.S. population suffers from”compulsive buying disorder.” For those with this serious shopping problem, places to seek help include Debtors Anonymous, books, or a professional therapist.

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.

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College saving: more than money

I can personally testify to the financial benefit of saving for my children’s education: I started monthly automatic transfers into their college savings accounts when they were young, and at the same time helped them establish a habit of saving a portion of their allowance each month.  My daughters reaped the financial benefits of that saving during college, and continue to benefit as young adults without school loans to repay.

I didn’t know it, but my children benefited in other ways — yours can, too.  Here’s why: children who have savings that is specifically set aside for their education and career goals actually make greater academic progress than children who do not, all other things being equal.  They do better in school, are more likely to finish high school, and are more likely to attend and complete an educational program after high school.

Even though I didn’t know about this research back then, it makes sense to me.  Having a savings account means we’re thinking about the future. It creates a vision for steps beyond high school.  It builds hope and a belief that they can do it, and is a motivator. Having a vision for the future is extremely powerful.

Having savings doesn’t guarantee school success, of course, but it makes it more likely. The benefit of savings is especially strong for children in lower-income families. Research also shows that even small savings makes a difference – even amounts less than $500 have an impact.  Only a small part of the benefit comes from the actual monetary value in the account; most of the benefit results from expanding young people’s vision for their future.

Think of the children in your life. Over the summer, families may be purposeful about encouraging library visits or enrolling children in learning-oriented camps.  Those are great ideas. But it turns out those aren’t the only ways to boost academics!  Build your child’s vision for the future by starting or adding to an education savings account in his or her name. Get them involved too!

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.

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Fiduciary Standards

If I retire today, I have access to accumulated funds in an employer managed retirement fund. I can transfer the money to a private IRA and put it under the management of a financial advisor I select. I could also purchase an annuity; a contract that is offered by an insurance company that operates similar to a pension and would pay me regular monthly income.

I won’t be given a detailed sheet explaining the commissions or fees collected as a result of my choices. I’ll have to trust the guidance provided by the financial advisors I consult and accept that there will be fair compensation for their knowledge and work completed on my behalf.

Today, financial advisors who sell “retirement” classified products must follow the “suitability” standard. They can recommend financial products they reasonably believe are appropriate based on the client’s financial needs, objectives and unique circumstances. A key distinction in terms of loyalty is also important, they can place the interests of their employer and themselves first, not necessarily the client served. It can result in recommendations for products that have higher commissions and fees.

In June, these same financial advisors will be placed under a stricter “fiduciary” standard. The Department of Labor’s definition of a fiduciary demands that advisors act in the best interests of their clients, and to put their clients’ interests above their own. It states that all fees and commissions must be clearly disclosed in dollar form to clients. The advisors are bound legally and ethically to the standard.

The rule change has faced several challenges, but the June 9, 2017 implementation has been announced with a transition period that ends on January 1, 2018. Consumers should see improved disclosure and will have greater control over the fees they pay for retirement-focused financial products.

To learn more visit: http://www.investopedia.com/updates/dol-fiduciary-rule/

 

 

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.

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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.

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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.

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