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Don’t Take the Bait: New Infographic on Phishing Threat

The American Bankers Association Foundation and the Federal Trade Commission recently released a new infographic to educate consumers on the growing threat of phishing. According to the FBI’s Internet Crime Report victims lost nearly $30 million due to phishing scams in 2017 compared to $8 million just two years earlier.

In a phishing scam, criminals send an email or a text, or call a victim disguised as a company or person they know. The goal of the phisher is to steal the victim’s money, identity or both by convincing the unsuspecting consumer to click on a link or share sensitive information, such as a password. The fraudsters often pressure victims to act quickly by saying something bad will happen if they do not comply.

“We’re thrilled to continue our collaboration with the FTC to help consumers combat a scam that continues to target bank customers at an alarming rate,” said Corey Carlisle, executive director of the ABA Foundation. “Phishing scams aren’t as obvious as they used to be. The criminals’ techniques have become much more sophisticated, so it’s more important than ever that consumers understand the scam and how they can protect themselves.”

“One of the best ways to combat phishing is to implement multi-factor authentication, which is a second step to verify you are you, like sending a text to your phone with a confirmation code,” said Paul Benda, senior vice president, risk and cybersecurity policy at ABA. “We encourage consumers to use MFA for any of their accounts that support it, especially email and financial accounts.”

The ABA Foundation/FTC joint infographic, released today in recognition of National Consumer Protection Week, describes how phishing scams work and provides the following tips for consumers:

  • Check it out.
    • Look up the website or phone number for the company or person who’s contacting you.
    • Call that company or person directly. Use a number you know to be correct, not the number in the email or text.
    • Tell them about the message you got.
  • Look for scam tip-offs.
    • You don’t have an account with the company.
    • The message is missing your name or uses bad grammar and spelling.
    • The person asks for personal information, including passwords.
    • But note: some phishing schemes are sophisticated and look very real, so check it out and protect yourself.
  • Protect yourself.
    • Keep your computer security up to date and back up your data often.
    • Consider multi-factor authentication — a second step to verify who you are, like a text with a code — for accounts that support it.
    • Change any compromised passwords right away and don’t use them for any other accounts.

This is the third joint infographic released by the ABA Foundation and FTC to educate consumers about common fraud schemes. The first two infographics focused on online dating scams and fake check scams.

For more information on phishing scams, visit aba.com/phishing.

Click here to view the phishing infographic.

5 Important Questions When Choosing Your First Home

Moving into your own place can be exciting and frightening at the same time. The American Bankers Association suggests considering the following questions when choosing your own home.

  1. How much money do you have saved up?

    Start with an evaluation of your financial health. Figure out how much money you have for a down payment or deposit on a rental. Down payments are typically 5 to 20 percent of the price of the home. Security deposits on rentals are usually about one month of rent and more if you have a pet. But be sure to keep enough in savings for an emergency fund. It’s a good idea to have three to six months of living expenses to cover unexpected costs.

  2. How much debt do you have?

    Consider all of your current and expected financial obligations like your car payment and insurance, credit card debt and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt to income (DTI) ratio on most loans to 43 percent.

  3. What is your credit score?

    A high credit score indicates strong creditworthiness. Both renters and homebuyers can expect to have their credit history examined. A low credit score can keep you from qualifying for the rental you want or a low interest rate on your mortgage loan. If your credit score is low, you may want to delay moving into a new home and take steps to raise your score. For tips on improving your credit score, visit aba.com/consumers.

  4. Have you factored in all the costs?

    Create a hypothetical budget for your new home. Find the average cost of utilities in your area, factor in gas, electricity, water and cable. Find out if you will have to pay for parking or trash pickup. Consider the cost of yard maintenance and other basic maintenance costs like replacing the air filter every three months. If you are planning to buy a home, factor in real estate taxes, mortgage insurance and possibly a home owner association fee. Renters should consider the cost of rental insurance.

  5. How long will you stay?

    Generally, the longer you plan to live someplace, the more it makes sense to buy. Over time, you can build equity in your home. On the other hand, renters have greater flexibility to move and fewer maintenance costs. Carefully consider your current life and work situation and think about how long you want to stay in your new home.

7 Ways to Make Your Tax Refund Count

More than 70 percent of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2018, according to the Internal Revenue Service, and it is anticipated they will get a similar amount this year. As Americans receive their refunds, the American Bankers Association has highlighted seven tips to help them use the money wisely.

“Prioritizing your tax refund to create an emergency fund and pay off debts first will help position you for financial comfort the rest of the year,” said Corey Carlisle, executive director of the ABA Foundation. “As those who have been affected by the federal government shutdown this year can attest, financial challenges can arise quickly and it’s critical to have money set aside for those unexpected hardships.”

Carlisle highlighted recent changes to the tax code as a reason for consumers to file their returns as early as possible this year.

“There are a lot of new wrinkles to the tax code that may surprise people, so you’ll want to get a jump start on filing this year and then talk to your employer about adjusting your withholdings to calibrate them accordingly,” said Carlisle.

To help consumers make the most out of their money, ABA has highlighted the following tips:

  • Save for emergencies. About 40 percent of Americans are positioned to cover a $400 emergency expense. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three to six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.
  • Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  • Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Your bank can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account.
  • Pay down your mortgage or student loans. Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans. Be sure to inform your lender that your extra payments should be applied to principal, not interest.
  • Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bond to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.
  • Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home.  This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program). If you have more substantial renovations in mind, your bank can help with a home equity line of credit.
  • Donate to charity. The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.

ABA also stressed the importance of lower-income workers filing a tax return—even if their income is too low to trigger any federal tax liability—in order to potentially claim the Earned Income Tax Credit (EITC).  Depending on a recipient’s income, marital status and number of children, the EITC can result in a refund of up to $6,431 to help them ensure financial security.

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.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

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.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

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.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

How to Save for Retirement

It’s never too early to start putting away money for your future. If you’ve ever wondered how to save for retirement when you’re also dealing with day-to-day expenses, these easy tips can help.

1. Get a rough estimate of retirement expenses

It may seem difficult to know how much money you’ll need in retirement, especially if it’s several decades away. Experts say that to keep your same standard of living, you’ll probably need at least 70% of your pre-retirement income.

The reason you probably won’t need 100 percent is because some costs, such as commuting expenses or child care, probably won’t be necessary in retirement. If you already have a budget for your current expenses, then it’s probably easy to get a rough idea of what you may need when you retire.

2. Decide on a savings target

Say you’re 25 years old and your living expenses are about $50,000 a year. Take 70% of that, and it means you’d probably need about $35,000 to retire comfortably, assuming your income remains the same until retirement. So you’d want a nest egg that provides about $35,000 annually.

Many financial experts suggest that you withdraw only about 4% of your retirement savings each year to help ensure that it lasts. That means to get $35,000 in income, you’d need a savings target of about $875,000.

It’s a lot of money, but by using a retirement calculator, you could find that there’s a good chance you could reach your goal by age 61 if you start saving 10% of your income each year. This number assumes your savings earn 7% annually. If your income increases before retirement, you’d probably also need to increase your savings target.

If you can’t quite put away 10% or whatever your goal percentage is while also keeping up with your regular expenses, consider starting with a smaller amount and gradually increasing the percentage of income you save until you reach your goal.

You may also have other income sources in retirement, such as Social Security or a pension plan. Look at the Social Security calculator to get an idea of what your monthly benefits might be when you retire and add that to your retirement calculations.

Bear in mind that an income of $35,000 will probably have much less spending power in 40 years than it does today because of inflation, so it’s smart to consider cost-of-living increases in your savings target. It may be a good idea to make an appointment with a certified financial planner to help you weigh your options.

3. Contribute to a tax-advantaged retirement plan

In addition to knowing what percentage of income you should save each year, you’ll also want to decide where to put your money. If your employer offers a traditional or Roth 401(k), consider enrolling. This is especially important if your company offers an employer match, because a match is like adding free money to your retirement savings. You could also contribute to a traditional or Roth IRA.

With traditional retirement plans, you receive an upfront tax deduction for the money you contribute. You then let that savings grow and allow the interest to compound. You’d pay income tax on any money you withdraw, and you’d also have additional early withdrawal penalties if you take money out before age 59½.

With Roth plans, you pay tax on your contributions, but you don’t have to pay tax on your withdrawals if you retire after age 59 ½.

When you put your money in a retirement savings plan, you’ll have a number of different investment options to consider, including stocks, bonds and mutual funds.

4. Put your savings on autopilot

Once you’ve established your retirement plan, consider setting up automatic withdrawals from your paycheck or bank account. It would be much easier to meet your savings goals when your money has a chance to grow uninterrupted over a period of years.

Learning how to save for retirement is important, but it doesn’t have to be hard. By coming up with a savings goal and contributing regularly to a retirement account, you can help make sure you’ll be able to meet your financial goals for the long term.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Is Fall the Best Time to Buy a House?

Sometimes it’s smarter to buy certain items according to the season, like sweaters near the end of winter and swimsuits in late summer. But what’s the best season for buying a house?

The answer: the fall. As temperatures cool and trees shed their leaves, enough factors break in the buyer’s favor to make it the No. 1 season for homebuying. Here’s why.

Less competition

Many homebuyers are families who want to minimize a move’s effect on their kids’ schooling. They want them to start at a new school on the first day, not midyear. And so if their spring and summer searching didn’t work out, they might well wait for the next go-round. This means fewer buyers bidding on the same houses you’re interested in and more negotiating power when you do. (A chart in this article shows how home sales drop starting in the fall.)

Of course, this works both ways: Sellers might not want to uproot their families in the middle of the school year either. But while this brings housing inventory down, you might just find it easier to focus and pinpoint exactly what you really want in a home.

Sellers are more motivated

Spring and summer are the high seasons for homebuying: Days are longer, the weather’s nice, and open houses are well-attended. And that means sellers can sit back and be a bit choosier with offers.

But as Labor Day recedes in the rearview mirror, sellers start to wriggle in their seats. The prospect of trying to sell during the holiday season or, more likely, waiting until the next year, is dispiriting. And so these sellers can become, in a sense, settlers – willing to reduce their prices and conditions. There is some variation by region, but overall in the U.S., prices have peaked by the end of August.

Buyers can use this increased motivation to their advantage, offering less and asking for more during negotiations.

Taxes and discounts

Buying a home costs a lot of money but comes with good tax breaks as well. The IRS allows deductions for the interest you pay on your mortgage, on the premiums you might pay for mortgage insurance, on property taxes and more, including some of these that went into your closing costs. Buying a home in the fall means seeing those tax breaks sooner, the following April.

Also, much like those motivated sellers, many homebuilders discount their inventories during this time of year to help them meet year-end sales goals.

The decision to buy requires serious consideration of where you are in life, what your goals are and how much you can afford. But if you are indeed ready, buying during the fall can be a good call. Just try to find time in between football games.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Fact Sheet: How to Save Damaged Family and Personal Treasures

Release date:
September 11, 2017
Release Number:
FEMA FS-011

Many valuable and cherished personal items damaged by flood waters often can be rescued. Here are some tips on how to save some of your family treasures:

  • If an object is still wet, rinse it gently with clean water. If dry, remove silt and other foreign material with a soft brush or damp cloth.
  • Air dry wet things indoors. Sunlight might be too intense. Keep humidity as low as possible to prevent mold accumulation.
  • Flood water may be contaminated. Wear protective gloves, clothing and goggles.
  • Do not try to separate photos or negatives that are stuck together. Soak them in water for up to 48 hours until you can safely pull them apart. Hang them with clips or clothespins to dry.
  • Put wet books in a sturdy covered plastic container, spine side down. Place the container in a freezer and keep it there for several weeks, even months. Then remove and let dry.
  • With fabrics or textiles, remove mud and debris with gently flowing clean water or fine spray from a hose. Press out the excess water with your hand. Do not try to wring out the water. Allow to dry.
  • Clean wooden objects, like furniture, with a damp sponge; blot and let dry slowly inside the house, not under the sun.
  • Rinse metal objects with clear water and blot dry immediately with a clean, soft cloth. Fans or low-heat hairdryers will hasten drying rate.
  • For broken pottery or ceramics, put all the pieces in an open container and mark what it is. Don’t try to glue the pieces back together until they are dry, and watch for mold. If mold appears, spray the pieces with Mold-Ex or a similar product.

For more information, log onto preservecollections.org. To find a professional conservator, log onto conservation-us.org/membership/find-a-conservator.

7 Tips for Hurricane Preparedness

With hurricane season underway, ABA is encouraging consumers to prepare for hurricane season by assessing their home’s risk and developing emergency plans to protect against a potential storm.

  • Know your risk. FEMA’s map service center will show you the flood risk for your community, which helps determine the type of flood insurance coverage  you will need since standard homeowners insurance doesn’t cover flooding.
  • Assemble an emergency kit. The emergency kit should include first aid supplies, a flashlight, extra batteries, at least three days of non-perishable foods and water, towels and a supply of any necessary medications. Stay informed of the storm’s path and progress by monitoring Wireless Emergency Alerts via text message and having a battery-powered radio or TV available.
  • Develop a family communications plan. Know how you will contact one another; how you will get back together, if separated; and what you will do in different situations. Having a plan can eliminate some of the stress and confusion.
  • Establish an evacuation route. Prior to a storm, contact your local American Red Cross to locate the shelter nearest you or download their Shelter Finder App. Identify the safest route to get there. Be sure to check if your local emergency shelter allows animals and family pets.
  • Secure your home. Outdoor furniture and other objects can pose a potential hazard. Turn off propane tanks and other utilities if instructed to do so by emergency personnel.
  • Protect financial documents.  In the event of a disaster, you will need identification and financial documents to begin the recovery process.  Safeguard important documents in a bank safety deposit box, computer storage devices (USB drive, CD/DVD), and/or waterproof storage containers, including:
  • Personal identification (driver’s licenses, birth certificates, military IDs, passports, etc.)
  • Financial account information (checking, savings, retirement and investment accounts, credit/debit cards).
  • Insurance policies on all personal property, including appraisals and lists and photos of valuable items.
  • Ownership or leasing documentation for homes and vehicles (deeds, titles, registrations, rental agreements, etc.)
  • All health and medical insurance documentation.
  • Know the details of your insurance policy. Talk with your agent to determine if you have adequate coverage or if you need to reassess your plan. This is especially important if your property’s flood map has changed.

The FEMA website, Ready.gov, offers tips on preparing for an emergency. FEMA offers a free app that is available for download through your smart phone. For more resources, visit the FEMA site: http://www.ready.gov/hurricanes.