From Thanksgiving to just Giving

I have been excited about Giving Tuesday ever since it was created several years ago. Why? Not because I’ve adopted it as the day when I do all my giving, and not because I have an organization that receives extra giving. I’m excited because Giving Tuesday draws attention to one of the three core uses of our money — the one that gets the least attention.

The core ways in which we use our money are: Spend, Save, and Share. Financial educators (like me) don’t talk about “Sharing” nearly as much as we talk about the other two, and yet we should – it’s important. There is debate whether we humans are inherently altruistic, or whether it is something we learn. None-the-less, people who choose to give typically report that they gain some type of psychological benefit or reward when they give, regardless of whether they can give a lot or a little. It “feels good” to give.

It feels even better to give when we know that our gift is appreciated and/or that it makes a difference. When we give gifts to loved ones, we (hopefully) can see that the gift is appreciated. When we give to organizations or causes, it’s not always so easy to tell. When giving to a local organization whose work you know well, you may see evidence of their good work in your community; you may even know some of their board members personally. With large national organizations, you might want to check them out before giving: tools like CharityNavigator.org or the Better Business Bureau’s Wise Giving Alliance (Give.org) can help.

You can also do your own research by checking out the organization’s website to find annual reports of their projects and their impact; you may even be able to check financial statements to see what portion of their funds goes for administration rather than direct service. Another useful step might be a web search for the organization along with a word such as “review” or “complaints” or “scams.”

I am one who finds that it “feels good” to give. I can say that it feels even better to give when I know the organization I’m giving to is using my money wisely. For more information, check out this news item from the Iowa Attorney General.

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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Rising Interest Rates and Your Spending Plan

In its ongoing fight against inflation, the Federal Reserve again hiked interest rates earlier this month to a range of 3.75 – 4.00%. This widely anticipated move continues the year-long trend of rate hikes, and it is important to understand how these moves affect your household spending plan.

The specific rate mentioned above – the Federal Funds rate – technically does not affect consumers directly. When the target range is increased, the costs for banks participating in overnight market activities increases, which will then likely be passed along in the form of higher rates on consumer debt products.

These behind-the-scenes transactions are ultimately responsible for the rising costs of credit cards, mortgages, and other loans. On a positive note, consumers can also take advantage of higher rates on treasuries, money market funds, CDs, and other short-term saving instruments. For the sake of space, I will go over two of the most common consumer rates: credit cards and mortgages.

  1. Credit Cards – most credit cards utilize an adjustable rate, which is more susceptible to immediate changes in the market. Individuals carrying a balance from month-to-month will experience higher borrowing costs, and extend their payoff timeline, especially if they are making the same monthly payment. You can likely find your current rate on a monthly statement.
  2. Mortgages – on the flip side, most mortgages fall under the fixed-rate category. While new homebuyers, and those with adjustable-rate mortgages (ARMs), are facing higher borrowing costs, those with an existing fixed-rate mortgage are not impacted.

Unfortunately, consumers cannot control effective interest rates; however, you can at least minimize the impact on your spending plan. Forgoing a major purchase, shopping around for the best rates, improving your credit, and making extra debt payments are all potential strategies for protecting your personal finances during a rising interest rate environment. Human Sciences Specialists, with a focus in Financial Health and Wellbeing, are also here to help if you find yourself in a tight spot with your spending plan!

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Sports Betting and Gambling Resources

I will admit it – I have been spending a decent amount of time watching football recently. And who can blame me? There have been entertaining and surprising games every weekend, but one of the biggest surprises for me didn’t take place on the field. It happened during the commercial breaks – over, and over, and over. Another admission…I do not watch a lot of traditional television. So, it’s entirely possible I am just missing the massive amount of sports betting commercials on tv. It’s so prevalent that online betting is even included in the pregame shows with the commentators.

Sports betting, in it’s current form, really dates back to 2018 and a decision made by the Supreme Court. Since then, it has been adopted in different ways, shapes, and forms by many states, including Iowa. It is probably too early to understand the impact; however, there are some early results and plenty of resources available for those experiencing a challenge with sports betting, and gambling, in general.

The Iowa Racing and Gaming Commission provides oversight for the state’s gambling activities, while the Iowa Department of Public Health provides treatment and prevention services. Workers with an Employee Assistance Program (EAP) may have access to counseling services for those experiencing a challenge with gambling. Iowa State University Extension and Outreach does not cover gambling-specific topics, but we do have a wide variety of financial education topics for Iowans in need!

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Medical Debt on your Credit Report?

Negative information on your credit report can hurt you, by making it hard to rent an apartment or a job, OR by making you pay more for a loan or for insurance. When medical debt gets sent to a collection agency, that becomes a negative item on your credit report. One in five American consumers are affected by medical debt on their credit report.

Recent changes by the three major national credit bureaus (Equifax, Experian and TransUnion) will improve this situation for some, but not all, consumers.

Two changes were implemented July 1, 2022:

  1. Medical debts that were in collections for a time, but were then paid in full will be removed from your credit report completely.
    This means that medical debts will be treated differently than other debts. If I get behind on my car payment for a couple of months, but then get caught up, the fact that I was behind for a while will CONTINUE to show up on my credit report.
  2. Medical debts in collections will not appear on a credit report until one full year after the original date of delinquency. Previously, the wait was six months.
    This change helps consumers in situations where the problem lies in a billing error or incorrect insurance processing, rather than in consumer non-payment. A year provides enough time that the dispute will likely be resolved before a debt appears on a credit report.

Beginning in 2023, the third change will kick in:

  • Medical collections under $500 will never appear on a credit report.

These three changes will help many consumers reach a higher credit score, opening up opportunities and reducing costs of borrowing and insurance. Unfortunately, a large number of Americans with unpaid medical debts larger than $500 will not be helped by this change.

The Consumer Financial Protection Bureau issued an analysis of the change last summer. It is hoped that the changes will reduce the number of situations in which consumers feel they MUST pay a medical bill, even if they believe it is incorrect, in order to “avoid ruining their credit.”

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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“Forgive My Student Loan? But I just paid it off!”

Graphic from https:studentaid.gov

The announcement by President Biden last month about the new plan to forgive up to $10,000 (or $20,000, in some cases) of student loan debt has been great news for many Americans, but there may be people who are groaning instead of celebrating. If you are one of those people, I may have good news for you!

Here’s the kind of scenario that may have people groaning:
Jane Doe owed $5,500 on her student loans as of March 1, 2020. Even when the COVID-related “student loan pause” kicked in March 13, 2020, she kept making payments of $215/month, because her income stayed steady and she just wanted to be done with the loan. She made her final payment a month ago and celebrated being out of debt!

But then – on August 24 came the announcement that she would be eligible to have up to $10,000 in student loans cancelled! GROAN…. “Oh if only I hadn’t made those payments – I would have been out of debt anyway, and I could’ve saved that $215/month!”

Here’s the good news: Jane Doe can apply to her loan servicer for a refund of the payments she made voluntarily during the student loan pause! And THEN she can apply for up to $10,000 of loan cancellation. In some cases the refund may occur automatically. Note: she will only be eligible for $5,500 loan cancellation because that’s what her balance was when the pandemic hit. The debt cancellation is “up to” $10,000, but if your loan balance is less than $10,000, the cancellation is limited by the amount of your debt.

Did you continue to make payments on your student loans during the student loan pause (administrative forbearance) that began March 13, 2020?  You can apply to get those payments refunded to you, and if you’re eligible for student loan cancellation, you may WISH to request a refund if those payments brought your loan balance below $10,000. Contact your loan servicer to start that process.

THEN, stay tuned for information on how to apply for the debt cancellation. The government expects the application to open in early October. To verify that you are eligible for the loan cancellation AND to minimize administrative glitches, check step one and follow step two provided by Federal Student Aid.

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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Some Things Never Change

I have three grown children: each with two kids of their own. They once shared (with an eyeroll) how they always knew when mom was learning a new parenting curriculum because I would implement the strategies and techniques on them. It is now a privilege and a joy to watch my kids as parents and occasionally I will see one of those strategies from their past emerge in their home.

I really liked those parenting programs and the lessons that they reinforced in my kids (showing love while setting limits, using natural consequences, Savings/Spending/Credit, etc.). But as you would expect, there is now an app for SOME of that.  One that caught my eye allows a parent to pay their child an allowance or for extra chores. The money accumulates on a debit card which they can use to purchase the things they want or need.

The latest app being used with a couple of my grandkids is quite amazing. It teaches the Time Value of Money, Smart Spending through Rewards and the power of delayed gratification using Savings Goals.  The free version allows you to assign points to chores the child can earn and points for rewards the child can save for. For example…if a child wants a sleep over, the child will need to earn 1000 points.  Cleaning the toy room (a weekly chore) may be worth 5 points while emptying the dishwasher (a daily chore) may be worth only 1 point. The points can be assigned a dollar value as well.  So, if the child wants a $5 stuffed animal and it takes 10 points to equal $1, the child will need 50 points to buy the stuffed animal….I think there is also a math lesson in there.

What keeps it interesting is the fact that no two kids are alike, so what works for one child may not work for the next. I see that with my grandkids: one is highly motivated by rewards and has a long list of wants, while the other just loves to help and has no wish list.

By searching for “Child Chore Apps” on the web, you will find lists of apps that could be useful to parents trying to raise responsible young people and provide kids an opportunity to experience, practice and apply life skills, including money management.

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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The PSLF Limited Waiver Explained

The Public Service Loan Forgiveness (PSLF) Program was established in 2007 to help non-profit and/or government workers with their federal student loan balances. Under the original guidelines, only those with Direct Student Loans – Subsidized, Unsubsidized, PLUS, and Consolidated – would receive credit toward forgiveness. Limitations were also placed on the loan payments themselves. Payments must have been made on-time, in-full, and within the correct repayment plan.

  1. Allowing past payments to Perkins and Family Federal Education Loans (FFEL) to count toward forgiveness – these types of loans were ineligible under the original PSLF Program.
  2. Allowing borrowers to consolidate their federal loans without losing eligibility for forgiveness – previously, borrowers who consolidated individual federal loans (Direct or non-Direct) to a Direct Consolidation Loan would have to restart their eligible payment clock.
  3. Allowing partial payments to count – payments that were made for less than the monthly billed amount would not count toward PSLF.

These changes have allowed many additional borrowers to become eligible for forgiveness under PSLF, and the full list of changes can be viewed on the PSLF Limited Waiver Fact Sheet.

As of now, the October 31, 2022 deadline has not been extended (please note that this differs from the recently announced administrative forbearance extension ending on December 31, 2022), so make sure to contact your lender if you believe you are eligible for forgiveness! You may also contact a Family Wellbeing Specialist, with a focus on Family Finance (https://www.extension.iastate.edu/humansciences/finance) for additional assistance with navigating your student loans.

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Just Testing

Today’s tip is directly reprinted from Consumer Action’s Scam Gram.

A major Maryland healthcare system recently warned patients about phone calls asking recipients to schedule tests “ordered by your provider.” The calls are a ruse to gather personal information, as the callers ask for you to “provide or confirm” details such as your name, cell phone number, doctor’s name, Social Security number, insurance information and home address. While this warning came from the University of Maryland Medical System, similar pretexts are occurring elsewhere, like this fraudulent email that made the rounds at the University of California at Berkeley. The warning notes that callers can be very creative in gaining as much information they can, quickly. They even spoof company names to appear as if they’re calling from a lab or with a lab order from your doctor’s office. Hang up. Do not provide or confirm any information the callers ask for.

Consumer Action is a respected consumer education and advocacy non-profit based in California. You can subscribe here to receive their monthly Scam Gram by email.

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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VA Benefits Update and Resources

While the Inflation Reduction Act is currently being signed into law, another (very) recently passed bill also has the potential to impact millions of Americans – the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics – or PACT Act. This bipartisan-supported legislation seeks to expand VA healthcare and disability benefits for Veterans, who served over a period of several decades, and were exposed to a variety of hazardous toxins such as those emitted by burn pits, the use of Agent Orange, and radiation emitted from nuclear weapon testing. This is a long-awaited result for Gulf War/post-9/11 and Vietnam-era Veterans.

The Department of Veteran Affairs created a new webpage, a PACT Act FAQ handout, and a Survivor Benefit handout to help spread the word; Veterans are also encouraged to use the excellent Veteran service resources that already exist:

  1. County Veterans Offices – every county in the state of Iowa has a designated Veteran Service Officer who can assist with VA Healthcare enrollment, disability claims, and many other issues.
  2. VA Resource Webpage – this Dept. of Veteran Affairs webpage is dedicated to providing support on all VA-related topics, including an email subscription request link.
  3. Military OneSource – many Veterans who are serving the remainder of their contract on Inactive Ready Reserve (IRR) are still eligible for the many confidential, non-medical support services they received on active duty or active reserve status.
  4. Iowa State University Extension and Outreach – programs such as Powerful Tools for Caregivers, Volunteer Income Tax Assistance (VITA), and 1:1 Financial Consultations are all available to Veterans, regardless of status.

Ryan Stuart is a U.S. Navy Veteran and previously served as a Personal Financial Counselor for the Iowa Army National Guard. You can schedule an appointment with him to discuss the Thrift Savings Plan, Blended Retirement System, VA Benefits, and more!

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Surprise Lawsuit? Get help!

Financial stress is high these days, thanks to inflation. Imagine adding to that a notice of a lawsuit seeking you to pay a bill of $10,000 or more that is owed by your relative to a nursing home! That would be enough to tip stress levels over the edge!

Unfortunately that scenario has been increasingly common for siblings, nieces or nephews, children or grandchildren or other relatives and friends of individuals living in long term care facilities, according to a recent article in Kaiser Health News, a reputable source of information on health policy issues.

If this should happen to you, don’t panic! There are steps you can take, and help is available. Seek information. Ask for documentation of the debt, AND ask for documentation of why the facility sees you as liable for the debt. And get help – you do not need to deal with this kind of nightmare on your own.

This is a good time to offer a couple of key reminders:

  1. Never pay debts belonging to someone else without exploring whether you are actually liable to pay the debt. As I wrote earlier this summer, you may not even be responsible to pay debts owed by your spouse after he/she dies.
  2. Be careful what you sign. In some cases, nursing homes have produced a document signed by the child (or sibling, niece or other person) in which they actually did accept responsibility for payment. 
    How could this happen? When a person is admitted to a long-term care facility, there is a mountain of paperwork. Amidst all that paper there could be a form by which the signer agrees to pay any unpaid bills. Be sure to read documents before signing them.
    Note: federal regulations prohibit facilities from requiring such forms before admitting a patient.
    Even if you did unknowingly sign such a document, it may be possible to fight back on the grounds that you did not knowingly accept that responsibility.

According to Kaiser Health News, in many cases lawsuits demanding payment are based on fraudulent grounds. Respondents should be sure to consult an attorney. In Iowa, the Legal Hotline for Older Iowans is a resource available to everyone over age 60, regardless of income; contact them at 800-992-8161.

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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