Giving

Today is #GivingTuesday, an annual event begun in 2012 to spark a “global generosity movement unleashing the power of people and organizations to transform their communities and the world on December 3, 2019 and every day.”

As it follows on the heels of “Black Friday” and “Cyber Monday” and even “Small Business Saturday,” I find “Giving Tuesday” a huge relief – a welcome change of pace, not focused on shopping.

There are three ways we can use our money: Spend, Save, or Share. I don’t think the “sharing” element always gets its due attention. Sharing happens in many ways, including charitable giving and also including gifts to people we care about. It’s true that for many people, Black Friday and Cyber Monday focus on shopping for gifts we want to give to others; that is sharing, after all. But I see the kind of gift-giving I do with family and friends to be a little different. It’s less of a pure kind of sharing, because it’s usually reciprocal: “I need to give them something nice, because I know they’ll be giving me something nice, too.”

What I really like about Giving Tuesday is that it seems to encourage a more selfless sharing, with a main focus is on promoting the good of others, on something bigger than ourselves. If I can buy gifts for people who already have plenty, then surely I can also GIVE selflessly to causes that will help make the world a better place, or to people who have real need.

As you consider your giving options, focus on why you want to give when deciding whether and where to make donations. Giving to organizations you know (often local organizations) can ensure that your gifts are used well; when considering larger national charities, check them out with organizations that evaluate charities, such as  www.give.orgwww.charitywatch.orgwww.charitynavigator.org, or www.givewell.org.  

Giving is part of my monthly budget every month all year round. So on Giving Tuesday I am reminded to consider where this month’s gifts will do the most good, and also to reexamine whether I can give a little more…

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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Thanksgiving

The Pilgrims celebrated their first successful harvest in 1621.  The feast was a three-day celebration that included the survivors of the Mayflower and Native Americans.  The newcomers had adapted to the new environment and learned how to grow and harvest the food they needed to survive the winter months.

It would be awesome to be able to say that as a nation we have developed into a country where everyone is self-sufficient and can meet their own needs, but individuals and families still struggle. 

Thanksgiving’s celebration is an opportunity to share, and making contributions to the food pantry would be a great way to support community members.  A call to the local pantry can help with ideas of what to purchase.  Suggested items are easy to open canned vegetables, fruit, meats, beans, soups, and stews.  Peanut butter, cereals, crackers, and pasta are also good choices. Think about complete meals that can be prepared with simple tools and few additional needed ingredients. Don’t overlook spices that can help enhance meals prepared with standard food pantry items.  

Another approach is to focus on a specific group – infants, young children, cultural groups living in your community – and bundle together foods appropriate for their preferences and eating habits.  More ideas can be found here.

Money Tips authors, Brenda, Barb and I, wish you a joyful Thanksgiving!

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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To Reconcile or Not

Bank Check
Bank Check

Reconciling a checking account, comparing the bank’s records of checking account activity with your own records, is one of those things I learned when I opened my first account at the age of 16. There is something very satisfying when it matches to the penny AND it ensure that my checking account balance is correct.

It is a challenging to teach tech-savvy individuals to value and adopt the practice of reconciling their bank accounts. Many just rely on a phone app to ensure there is enough money in their account before writing a check. The flaw in this strategy is this: what if there are outstanding checks that have not yet cleared, so there is actually less money in the account than there appears to be on the banking app on your phone?

This week I learned an alarming new reason for reconciling your bank accounts. Over a period of several months, my daughter had purchased supplies for a group she volunteered for. She electronically deposited the reimbursement checks into her account by taking a picture of the checks with her phone. She put the deposited checks in a neat stack on her desk so she would remember to file or destroy them later. Weeks later, her husband found and deposited the checks not knowing they were waiting to be destroyed. He encountered no red flags or warnings, and the checks were deposited a second time. The error was not discovered until the group for whom she volunteered reconciled their account. Had they NOT reconciled their account, the error might never have been discovered.

I find this alarming. There was a period of time where I wrote checks at a large chain store; they scanned my check and handed it back to me. What if a dishonest clerk would have scanned it twice and pocketed the cash from the register? Her register would have balanced at the end of the day. What if I had lost the check and someone deposited it? What if…?

What measures are you going to take to protect yourself from this potential problem? For information about reconciling a bank account, check out How To Reconcile A Bank Account.

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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Buying Health Insurance

Xray

I think it is safe to say that you do not really understand how expensive health care can be and what an insurance policy covers until you experience a medical event. Up till then, you’ve just seen the written policy, which has to summarize services for a wide variety of health issues and often uses language that is hard to understand. The result is a book called “Evidence of Coverage.” Not something you find on the bestseller list of reading material. 

Knowing that a “book” is not what consumers want to read, insurance marketers will often highlight internet access and wellness coaching,  rather than details about out of pocket costs.

Here is an example: Jamie breaks an arm. With a higher-premium policy that pays a larger share of the cost of care, Jamie’s total out of pocket cost would be $4,000. If Jamie had selected a policy based only on premium costs and selected the plan with the lowest premiums, Jamie’s total out of pocket expense for the broken arm would be $6,000, due to a higher deductible and higher co-pays for covered services.

Steps to picking a plan go beyond comparing premiums. You can learn how in a workshop, “Smart Choice: Health Insurance ™ Basics.”  This free workshop is offered online on November  6th, 7:00-8:00 pm.  Register by November 4th at http://bit.ly/schi14326

Getting the most out of your coverage and learning more about navigating the claims process is part of Smart Use: Health Insurance™ Actions.  It will be taught online on November 13. To receive log-in information, register for this program by November 11th at http://bity.ly/schi14328

Smart Choice: Health Insurance™  was developed by a team of experts from across the nation led by University of Maryland Extension.  

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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Your Biggest Financial Decision

What’s the biggest financial decision you’ll ever make? Going to college? Buying a house? Maybe, but it may also be true that the biggest financial decision is the decision about when to claim Social Security. And that is a decision where you’ll hear people give opposite advice – some will recommend claiming early, and others encourage you to wait.

Because it’s a big decision, it’s worth exploring your options carefully using readily available online tools. Tool #1 is well-known, but read on to tool #2, as well, because it offers a bonus.

Tool #1: Set up your account at www.socialsecurity.gov and check out your options. Notice how your monthly Social Security income changes depending on your age at claim. You’ll notice that it’s not just what year, but also what month, that matters. For example, if you turn 67 in November, but really don’t have any plans until summer, working an extra 5 or 6 months will give you a higher monthly income.

Tool #2: Check out the Social Security Estimator from the Consumer Financial Protection Bureau (CFPB).  Although this tool is not personalized to your individual history of work and earnings, it does something the Social Security tool does not. It shows the cumulative impact of your decision about when to claim. 

Here’s how the CFPB tool works: You enter your birthdate, and type in how much has been your highest annual earned income in your career. Based on that, it estimates what your social security retirement benefit would be at your full retirement age, and at other ages between 62 and 70. When you select an age, it shows what your monthly income will be, AND (in the left margin) it shows the total amount you will receive from Social Security if you live to the average life expectancy of 85.

graphic depiction of output described.
Combined graphic showing calculator results at ages 62 and 70

I ran an example for a person born in 1960 whose highest earning level was $50,000/year. If they claimed at age 62 and lived till age 85, they would receive a monthly benefit of $1,112 and would have received a total of $305,800 from Social Security during their life. By contrast, if they claimed at age 70 and lived to age 85, their monthly benefit would be $1,958 and their total by age 85 would be $352,440. Note: all these figures would actually be higher, because of adjustments for inflation.

There is no “right” age to claim Social Security; your choice depends on your situation – your needs, other sources of income, health situation, and more. But using available tools, including the CFPB calculator which enables you to easily see the total impact of your decision at age 85, will help you make a well-informed decision. Find more retirement planning information our retirement resource page.

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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Managing Someone Else’s Money – Being a Financial Caregiver

Today’s guest blogger is Sandra McKinnon, Human Sciences Specialist in family finance serving southwest Iowa.

Are you managing money or property for a loved one who is unable to pay bills or make financial decisions? According to the Consumer Financial Protection Bureau, 40% of those over 60 years old have a power of attorney. That amounts to over 26 million people in the U.S. with this responsibility.

Being legally designated as power of attorney is one of 4 different types of financial caregivers, also known as a fiduciary. You must be trustworthy, honest and act in good faith.

Other types of fiduciaries include: a court-appointed guardian of property (known as a conservator); a government fiduciary (such as a Social Security representative payee); and a trustee under a revocable living trust. Each of these is a separate responsibility.

Each has duties, powers and responsibilities. In general, there are 4 basic legal duties of a fiduciary:

  1. Act only in best interest of your family member or friend
  2. Manage their money and property carefully
  3. Keep their money and property separate from your own
  4. Keep good records and report as required

Another role of a financial caregiver is to watch out for financial exploitation and be on guard for consumer scams. If you suspect exploitation of an older adult, call the Eldercare Locator 1-800-677-1116 or visit www.eldercare.acl.gov. They will assist you in finding the state or local agency that investigate.

For more information, visit https://www.consumerfinance.gov/consumer-tools/managing-someone-elses-money/ or seek guidance of an appropriate legal professional.

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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Currency Exchange Cautions

Last month I took a vacation to Ireland. It had been years since I’d traveled outside the US and Canada, so I did some “homework” before I left.  One key step was to talk with my credit card carriers. Two purposes:

  1. Let them know I was going to be traveling (always a good idea, even when traveling in the U.S.).
  2. Find out what their currency conversion fees are.
Dollars becoming Euros

When exchanging U.S. Dollars for another currency, there is always an exchange rate, because U.S. Dollars and Mexican Pesos and Euros and Indian Rupees are not equivalent. Currently, it takes about $1.10 US to buy one Euro, which is the currency used in Ireland.

Beyond that, however, there MAY be another cost: the bank that is converting the money may charge a fee for converting the funds. When I called my credit card companies, I got good news: two of my cards charged no conversion fees! My third card did charge a fee (3%), so I didn’t use it at all.

So far it sounds like I did a great job, right? But no – not completely. My mistake came in a situation I hadn’t anticipated. Sometimes when I was paying for a purchase in Ireland, the store gave me a choice: would I like to have the transaction charged to my credit card in US dollars or in Euros? A few times, caught by surprise, I said “US Dollars.”

Unfortunately, that was the wrong answer, as I learned when I looked closer at my receipts. Because when the store or restaurant ran the transaction in US Dollars, then they charged me a conversion fee (3.5% in one case). The right answer to the question would’ve been to have them go ahead and process the transaction as Euros, since I knew my credit card wasn’t going to charge me a fee.

Was this the end of the world? Absolutely not. It was a small expense, since I only did that a few times before I noticed the fee, and luckily not on any large purchases. But I was still a little disappointed in myself. After preparing to be a smart traveler, I undid the benefit by making a poorly-informed decision on the spot.

I’ll do better next time. And maybe YOU will have a chance to benefit from the lesson I learned!

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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Sports Betting Tips

Today’s guest blogger is Kalyn Cody, ISU Extension Human Sciences Specialist serving the DesMoines metro region. Kalyn Cody photo

Last week, I, like many Iowans, walked into my local casino to set up a profile for online sports betting. 

After a law passed in May and final rules were approved in July, sports betting began on August 15th at many casinos in Iowa.  The law allows for both in-person and online bets, but everyone must first check in at a casino to verify their age and identity. With this new opportunity to gamble in Iowa, it is important that we remember some key tips to bet responsibly and not get in over our heads. 

First, always gamble with a plan.  Pick an amount you are comfortable losing.  Does this amount fit into your budget?  Will you have to sacrifice things you need if you lose?  Additionally, pick an amount you are comfortable winning.  Set a dollar amount at which you will walk away.  It is very common to see a stack of chips or winning tickets and continue playing, only to look down again a bit later with nothing left.  Whether you are winning or losing, have an exit strategy.

Second, never borrow money to make a bet.  Think of sports betting as entertainment.  Would you take a loan to watch the headliner at the State Fair?  To go out to a 4-star dinner?  Every gambler has a bad beat story—probably many—and taking a loss on borrowed money can easily spiral out of control. 

Finally, if you do find yourself struggling with a gambling problem, be aware of resources that are available to help.  The Iowa Department of Public Health has set up a website with a risk assessment, hotline, live chat, and more.  You can also call the ISU Extension Iowa Concern Line at 800-447-1985. 

Enjoy your new options, but remember to stay in control of your bets.

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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Trends in Saying, “Good Bye”

Dad's Urn
My Dad’s Urn

My brother and I had what I would consider “a lot” of time to prepare for the passing of our father, since Alzheimer’s is a slow-progressing disease. We had time to talk, ask questions, research and make decisions. This was especially helpful since we knew that Dad would most likely pass in Indiana; the funeral would be in Iowa at my church; and the burial would be next to our mom in Minnesota. As we liquidated his Minnesota assets, we consulted our lawyers in Indiana, Iowa and Minnesota as we made decisions about where the estate’s bank account should be located and in which state to file probate. The choice of cremation made for less paperwork and expense when it came to transporting his remains from Indiana to Iowa and then on to Minnesota.

The funeral home director in Indiana made everything very easy and advised us on issues we had not considered like the purchase of a vault for the urn holding dad’s ashes. Not all cemeteries require urn vaults, but Dad’s did. For being nothing more than a small plastic box that is sealed with rubber cement, it came with a hefty price tag. The funeral director suggested finding one online, which was about a fourth the price.

It is interesting the things that are said during the time of grief. Old feelings bubble up. Emotions are raw and run deep. Two of our family members were struggling with the fact that they had not attended my mom’s funeral 30 years ago, and had not even known where she was buried; in some ways they were burying two family members that day. It became apparent to me the important role the graveside service played for these two family members. Interestingly though, the one struggling most had made the decision to donate her body to science. In this way, her body would then be cremated (at no cost to her) and the remains returned to her family. She intends to have no grave, no funeral…no final expenses. Her decision was purely a financial decision. I wonder if she will think differently now that she has experienced the effects of 30 years of deeply buried grief, magnified because she had experienced all the traditional rituals that come with the passing of a loved one.

A financially secure and elderly friend passed away recently. She was devout in a faith which we shared. Her children lived far away and I was eager and willing to help them make all the funeral arrangements through our church. It caught me completely by surprise that they decided that there would be NO funeral. She had the means to pay for such things. She was a long-time member of our church and community, so there were a lot of people planning to say “good bye” in a public way AND a lot of people trying to make sense of this decision. She had donated her body to science and the remains were returned to her children…end of story.

With increased access to information, survivors as consumers are seeking more alternatives to the conventional funeral. Funerals are among the most expensive purchases made in a lifetime. The national median cost of an adult funeral is $7,360. The time to make these decisions is now…not during a period of duress, grief, and guilt. Funeral Directors are excellent sources of information and you may want to check out this document by the University of Florida Extension – The Art of Goodbye; A Closer Look at Emerging Trends in End-of-Life-Rituals.

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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Equifax Claim

I didn’t rush to file my claim for a portion of the $425 million settlement from Equifax. In 2017, when the security breach occurred, I confirmed my information had been compromised multiple times by using the look up tool. As an eligible person, I contacted Equifax to put a freeze in place on my file and enrolled in credit monitoring services for a 12 month period.

Everyone is going to benefit from the settlement. In addition to the 3 free credit reports you can receive each year from the credit reporting agencies (one each Experian, Equifax and Transunion), Equifax will be furnishing 6 additional reports for 7 years. Consumers can use an electronic notification system to remind them at set intervals to check their reports.

As a member of the group of 147 million people impacted by the breach, I could request a $25 @ hour payment for the time I spent setting up safeguards to make my identity more secure. I could also opt to request repayment of the fees paid to put freezes in place. Note: Iowa has since disallowed the $10 fee per reporting bureau, so that won’t be an issue in the future. Recent press releases have indicated that both types of payment requests are likely to be paid at a reduced rate, due to the large number of individuals who have filed claims.

Credit monitoring is also an option. It will result in four years of coverage at all three credit bureaus and 6 additional years of monitoring at Equifax. I can also receive enrollment again in a $1,000,000 Identity Theft Insurance policy. A word of caution here: the original policy offered in 2017 included two key measures that limited the scope of benefits. A claim had to be filed within 90 days of an identity theft event and only one claim could be made in a 12 month cycle. Anyone who selects this option should read the policy.

Equifax is required to offer recovery services for those impacted by their breach. To obtain assistance individuals will need to contact the settlement administrator at 1-833-759-2982.

If you need more details about the Equifax settlement or how to take steps to add more security to your personal credit file, visit the Federal Trade Commission website. A claim can be submitted online or by paper; you have until January 22, 2020.

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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