Archive for March 2018

7 Banking Tips for Young Millennials

Once you start receiving your first paychecks after graduation, knowing how to spend or save your money wisely can be tough. While you may be able to do your banking with just a few taps on your phone, managing money well is much more complicated. Here are a few tips to help you get started.

1. Budget using apps

Tracking how much you spend weekly and monthly shows you where your money goes and how you can save more. You can use a budgeting app that tracks your cash automatically or one where you enter information manually. Choose an app that lets you spend as little or as much time on budgeting as you want. From there, you can identify your total fixed expenses, such as rent and car payments, and more-flexible costs such as shopping and dining out.

2. Set up automatic transfers to savings

When you have a rough idea of how much you can save regularly, create a recurring transfer from your checking account to a savings account. By making savings automatic, you can get used to spending “below your means” and never have to worry about remembering to transfer.

3. Avoid overdrawing your checking account

Before you pay rent or spend any other big chunk of money, take a look at your checking account’s available balance. This can prevent you from spending more than you have in your account. If you overdraw, you may be charged a fee.

4. Establish credit

Student loans and credit cards can help you build good credit — as long as you stay current on monthly payments and don’t overuse your cards. Your credit score, which shows how responsible you are with credit, is an important factor that lenders check before approving car loans and mortgages. The better your score, the lower the interest rate you may be eligible for.

5. Repay debts strategically

If you have debts from multiple credit cards and student loans, pay the minimum on each and then contribute more to your higher-interest debts. By making those a priority, you can reduce how much interest you’re paying faster than by treating all debts the same.

6. Start an emergency fund

Being financially prepared in case of health emergencies or unexpected unemployment can save you from going into debt. Have a separate savings account just for this purpose; don’t mix it up with your regular savings. A good rule of thumb is to save enough to pay three to six months’ worth of living expenses.

7. Set long-term savings goals

Consider saving for retirement in an employer-sponsored 401(k) plan or individual retirement account. When you start saving early, you take advantage of compounded returns to make more money off your contributions overall.

From smart budgeting to setting goals, make good money choices now. Since time is on your side, you can benefit from building credit and saving early to be ready for big financial decisions in the future.

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How Debit Card Fraud Happens — and How to Avoid It

For many people, debit cards are the perfect plastic. They offer most of the conveniences of credit cards with no risk of accumulating debt.

But like credit cards, debit cards are vulnerable to rip-off artists. And debit card fraud is particularly scary because thieves can withdraw money directly from your checking account.

Here’s how debit fraud happens and how to protect yourself.

How identity thieves operate

Debit card fraud can be sophisticated or old-school. Thieves use techniques including:

  • Hacking. When you bank or shop on public Wi-Fi networks, hackers can use keylogging software to capture everything you type, including your name, debit card account number and PIN.
  • Phishing. Be wary of messages soliciting your account information. Emails can look like they’re from legitimate sources but actually be from scammers. If you click on an embedded link and enter your personal information, that data can go straight to criminals.
  • Skimming. Identity thieves can retrieve account data from your card’s magnetic strip using a device called a skimmer, which they can stash in ATMs and store card readers. They can then use that data to produce counterfeit cards. EMV chip cards, which are replacing magnetic strip cards, can reduce this risk.
  • Spying. Plain old spying is still going strong. Criminals can plant cameras near ATMs or simply look over your shoulder as you take out your card and enter your PIN. They can also pretend to be good Samaritans, offering to help you remove a stuck card from an ATM slot.

Smart ways to protect yourself

Adopt these simple habits to greatly reduce your odds of falling victim to debit card fraud:

  • Be careful online. Shop and bank on secure websites with private Wi-Fi. If you must shop or bank in public, download a virtual private network to protect your privacy.
  • Monitor your accounts. Review your statements and sign up for text or email alerts so you can catch debit card fraud attempts early.
  • Don’t ignore data breach notifications. The majority of identity theft victims received warnings that their accounts might have been breached but did nothing. If you get one of these messages, change your PIN and ask your provider to change your debit card number. You can also ask one of the major credit card bureaus to place a fraud alert on your file.
  • Inspect card readers and ATMs. Don’t use card slots that look dirty or show evidence of tampering, such as scratches, glue or debris. And steer clear of machines with strange instructions, such as “Enter PIN twice.”
  • Cover your card. When using your debit card or typing your PIN at an ATM, block the view with your other hand. Go to a different location entirely if suspicious people are hanging around the ATM, and if your card gets stuck, notify the financial institution directly rather than accepting “help” from strangers.

Even if you’ve taken precautions, debit card fraud can still happen. If your card gets hacked, don’t panic. Tell your bank or credit union right away so you won’t be held responsible for unauthorized charges, and file a complaint with the Federal Trade Commission.

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Four Forms You’ll Fill Out at Your First Job

Nothing’s easy about finding your first job: not the internet scouring, not the resume tweaking, not the interviews. When you finally are hired, you should experience some relief — but the sheer number of things you have to learn in the first few weeks can make you feel just as harried as the search process itself.

We can’t tell you how best to do your job, but we can prime you for the paperwork. Here’s a breakdown of how to handle it.

Direct deposit forms

As soon as you can, sign up for direct deposit — an electronic transfer of your salary from your employer directly into your bank account. It might not go into effect until after your first payday, but once it does, it’ll make your life much easier. Your wages will be harder to steal, and you’ll be able to access them more quickly. Checks can take a few days to process.

Setting up direct deposit is easy: You just need your bank account number and your bank’s routing number, both of which appear on your personal checks. If your employer doesn’t have a direct deposit form, your bank can provide one.

Health insurance sign-up forms

Most people get health insurance through their employers. Those who don’t must shop for a plan through private exchanges or the public marketplaces created under President Barack Obama’s health care law — or pay a penalty for forgoing coverage.

Whichever route you take, there are a few facts and terms you should know when evaluating plans:

  • Your premium is the amount you pay for insurance. If you receive coverage through your employer, it’s usually deducted from your paycheck.
  • Your deductible is is how much you are expected to pay per year for medical services your plan covers. After you “meet your deductible,” you will only be responsible for a percentage of the cost of service, a copay or a flat fee, depending on your policy. If you have a higher deductible amount, you often have lower monthly payments and vice versa.
  • A copayment or copay is the small fee — say, $10 or $20 — you pay every time you visit the doctor, get a prescription filled or generally receive health care. These payments go toward your deductible.

There’s much more involved in choosing a health insurance plan, including understanding the alphabet soup of plan types, such as HMOs, PPOs, EPOs and POS plans. Read any plan details carefully to decide which type of insurance is best for you. (And if you’d rather stay on your parents’ health insurance plan, you can do so until you turn 26.)

Retirement and 401(k) deferral forms

You’re just starting your first job, so the time when you can stop working probably seems like it’s eons away. But now is exactly when you should start saving for your retirement.

Your employer might offer a retirement savings plan, such a 401(k), which lets you divert a portion of your pay into a tax-advantaged account. Your employer might also match some of your contribution. If you can, take advantage of the full match amount — it’s essentially free money.

Other retirement savings options include individual retirement accounts and brokerage accounts, but one thing is constant: The earlier you start saving, the more you’ll have when you retire, thanks to compounding interest.

Tax paperwork

You’ll probably notice very quickly that having a $50,000 salary doesn’t mean you’re actually taking home $50,000 per year. A portion of your check pays your federal and state taxes, as well as deductions for Social Security and Medicare.

Before you receive your first paycheck, you’ll have to fill out a W-4 form, telling your employer how much tax to withhold from it. If you’re single and have no dependents, it’s pretty straightforward. And even if not, the IRS has a helpful calculator. Depending how much you have withheld, come next April you could have a big refund coming, or you could owe the government a lot of money. If you don’t like how things shake out at tax time, you can file a new W-4.

Questions? Ask your human resources department

Just as there’s probably someone at your office who will train you and show you where the restroom is, there are probably also people who can help you make sense of all these forms — the human resources department. If you have a question about your benefits or how you get paid, talk to them. It’s their job to help, and they’ve been at it longer than you have.

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