6 Financial Traps New College Graduates Should Avoid

6 Financial Traps New College Graduates Should Avoid

As college seniors across the nation graduate and start their careers, their financial lifestyle should be top of mind, says the American Bankers Association. ABA has highlighted six traps new college graduates should avoid to fortify their finances as they transition from the dorm to the office.

“Now is the time for college grads to get their financial life started on the right foot,” said Corey Carlisle, executive director of the ABA Foundation. “When it comes to managing your finances in the real world, pulling an all-nighter isn’t the best strategy.  Forming positive financial habits today will set you up for lifelong success.”

According to ABA, new college graduates should avoid the following financial traps:

  • Not having a budget.  Don’t spend more than you make. Calculate the amount of money you’re taking home after taxes, then figure out how much money you can afford to spend each month while contributing to your savings. Be sure to factor in recurring expenses such as student loans, monthly rent, utilities, groceries, transportation expenses and car loans.
  • Forgoing an emergency fund.  Make it a priority to set aside the equivalent of three to six months’ worth of living expenses. Start putting some money away immediately, no matter how small the amount. A bank savings account is a smart place to stash your cash for a rainy day. Use your tax refund for this instead of an impulse buy.
  • Paying bills late – or not at all. Each missed payment can hurt your credit history for up to seven years, and can affect your ability to get loans, the interest rates you pay and your ability to get a job or rent an apartment. Consider setting up automatic payments for regular expenses like student loans, car payments and phone bills.
  • Racking up debt. Understand the responsibilities and benefits of credit.  Shop around for a card that best suits your needs, and spend only what you can afford to pay back. Credit is a great tool, but only if you use it responsibly.
  • Not thinking about the future.  It may seem odd since you’re just beginning your career, but now is the best time to start planning for your retirement. Contribute to your employer’s 401(k) or similar account, especially if there is a company match. Invest enough to qualify for your company’s full match – it’s free money that adds up to a significant chunk of change over the years.
  • Ignoring help from your bank. Most banks offer online, mobile and text banking tools to manage your account night and day.  Use these tools to check balances, pay bills, deposit checks, monitor transaction history and track budgets.

7 Ways to Avoid Online Fraud

7 Ways to Avoid Online Fraud

Internet fraud continues to be a growing problem in the U.S. According to the FBI’s Internet Crime Complaint Center, the agency received approximately 270,000 complaints from consumers who were exposed to online fraud in 2014 — up from nearly 263,000 in 2013. In recognition of Internet Safety Month in June, the American Bankers Association is offering seven tips to help online users safely navigate the web while averting online threats.

“Fraudsters are using every tool, resource and tactic imaginable to get a hold of your personal information,” said Doug Johnson, ABA’s senior vice president of payments and cybersecurity policy. “As you navigate the web, it’s extremely important that you safeguard your personal information by developing stronger network passwords and ensuring that your online security software is up to date.”

ABA recommends the following tips to keep you safe online:

  • Keep your computers and mobile devices up to date.  Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.
  • Set strong passwords. A strong password is at least eight characters in length and includes a mix of upper and lowercase letters, numbers, and special characters.
  • Watch out for phishing scams. Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with. Forward phishing emails to the Federal Trade Commission (FTC) at spam@uce.gov – and to the company, bank, or organization impersonated in the email.
  • Keep personal information personal. Hackers can use social media profiles to figure out your passwords and answer those security questions in the password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, mother’s maiden name, etc.  Be wary of requests to connect from people you do not know.
  • Secure your internet connection. Always protect your home wireless network with a password. When connecting to public Wi-Fi networks, be cautious about what information you are sending over it.
  • Shop safely. Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page.
  • Read the site’s privacy policies. Though long and complex, privacy policies tell you how the site protects the personal information it collects. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere.

Five Steps to Cut Your Data Security Risks

Hackers are a particularly stubborn bunch. Each new security advance just motivates them to come up with a better game plan. A new case of identity theft occurs about every two seconds, so you need to be informed and vigilant to avoid becoming a victim. Here are five simple steps you can take to protect your identity online.

 

  1. Practice wise web habits

 

The United States is adopting the use of credit cards with microchips that will largely eliminate the use of counterfeit cards and reduce the threat of fraud when you use your card in person.

However, statistics on credit fraud indicate that the drop in counterfeiting will be accompanied by an increase in online fraud as criminals put more emphasis there. That change will make practicing safe web habits more important than ever.

 

For the safest web experience, avoid public Wi-Fi networks where hackers can easily access your activities. Instead, stick with secure home networks. If you must shop or bank on the go, install a virtual private network, or VPN, which hides your IP address and encrypts information to maintain privacy.

 

All websites aren’t created equal, so exchange sensitive information only over secure sites and with organizations you know and trust. While reputable financial institutions such as First National Bank of Pasco provide strong remote banking security, retail sites still require careful inspection. Identify secure sites by a web address beginning with “https” and a picture of a locked padlock in the address bar. It’s still important to log out of all accounts after completing transactions and to delete cookies regularly.

 

  1. Update devices

 

Hackers are constantly working to outsmart security software, so stay one step ahead by installing the latest browser version and operating system on your smartphone, laptop or other device. Additionally, be sure to regularly upgrade to the most recent versions of firewall, antivirus and antispyware programs.

 

  1. Create strong passwords — but don’t get attached to them

 

As tempting as it is to use your birthday or favorite hobby as a password, keep in mind that when passwords are easy for you, they soon become easy for identity thieves. Foil hackers by avoiding the obvious and by including symbols, numbers, and both upper- and lowercase letters. Don’t get too comfortable with these passwords, though: For the best security, change your login information frequently.

 

  1. Don’t be fooled by scammers

 

Identity theft scams can be quite convincing if you’re not wise to them. Often they come in the form of emails that look like they’ve been sent from familiar companies. These messages may indicate that there’s a problem with your account and instruct you to click on links and enter information in order to fix the issue.

 

Don’t fall for it. No legitimate business would make this type of unsolicited request. The links provided will most likely take you to copycat websites designed to steal your passwords, account numbers and other personal data. Never click on links in suspicious emails, and contact businesses only through their official websites and phone numbers.

 

  1. Nip trouble in the bud

 

No matter how careful you are, sometimes identity theft still happens. Catching fraud early is key to prevent it from escalating, so monitor your checking and savings account statements and credit reports regularly.

 

If you spot a problem, don’t panic. Notifying the financial institution or retailer involved immediately can help ensure that you won’t be held responsible. To help prevent future crimes, report any fraud incidents to the Federal Trade Commission.

 

Roberta Pescow, NerdWallet

 

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