Tag Archives: militaryfamiliespersonalfinance

Personal Finance Virtual Learning Event

The Personal Finance team will host our third Virtual Learning Event June 14-16. This year, we’ll focus on Financial Fitness. Join us as we engage with learners in this 3-day interactive series of events.

Join the Personal Finance Team June 14-16 for a unique online learning opportunity.
Join the Personal Finance Team June 14-16 for a unique online learning opportunity.

Schedule of Events

Tuesday, June 14, 11 a.m.- 12:30 p.m. ET: What is Financial Fitness & How is it Measured? Dr. J. Michael Collins of the University of Wisconsin, Madison will present this session, using the findings from the research he has gathered on this subject. Dr. Collins studies consumer decision-making in the financial marketplace, including the role of public policy in influencing credit, savings and investment choices. His work includes the study of financial capability with a focus on low-income families. He is involved in studies of household finance and well-being supported by leading foundations and federal agencies. In 2015, Palgrave Macmillan released a book Collins edited called A Fragile Balance: Emergency Savings and Liquid Resources for Low-Income Consumers. His 90-minute webinar on June 14 will focus on financial fitness as a goal for many people, but achieving fitness in terms of money management may require a combination of financial education, coaching, and financial access. After reviewing the components of financial fitness, this session will provide an overview of measures of financial capability and well-being, as well as practical applications of program measures in the field. The session will include discussion, interactive polling and Q&A.

Wednesday, June 15, 11 a.m.-12:30 p.m. ET: Positive Personality Traits of Financially Fit PeopleDr. Martie Gillen will deliver this 90-minute webinar using data and research from psychology that tells us what traits are most commonly found in individuals who make positive financial decisions. Dr. Gillen is the Project Investigator for the Military Families Learning Network Personal Finance team and an Assistant Professor and Extension Specialist for the Department of Family, Youth, and Community Sciences, in the Institute for Food and Agricultural at the University of Florida. Her research interests include personal and family finance, behavioral economics, older adults, Social Security retirement benefits, employment, retirement planning, financial social work, food security, and innovative post-secondary education models. The first section of the webinar  on June 15 will include an overview of personality traits as well as a discussion of the research related to personality traits and personal finance. The webinar will conclude will suggestions for working with individuals while taking into account their personality and impact on their personal finance decisions. Participants will have an opportunity to take a personality trait quiz.

Thursday, June 16, 11 a.m.-12:30 p.m. ET: Wealth Building with Saving, Investing & Windfalls. Dr. Barbara O’Neill will lead this session. Dr. O’Neill is a financial resource management specialist for Rutgers Cooperative Extension, has been a professor, financial educator, and author for 35 years. She has written over 1,500 consumer newspaper articles and over 125 articles for academic journals, conference proceedings, and other professional publications. She is a certified financial planner (CFP®), chartered retirement planning counselor (CRPC®), accredited financial counselor (AFC), certified housing counselor (CHC), and certified financial educator (CFEd). Dr. O’Neill served as president of the Association for Financial Counseling and Planning Education and is the author of two trade books, Saving on a Shoestring andInvesting on a Shoestring, and co-author of  Investing For Your Future,Money Talk: A Financial Guide for Women, and Small Steps to Health and Wealth.  She earned a Ph.D. in family financial management from Virginia Tech and received over three dozen awards for professional achievements and over $900,000 in funding for financial education programs and research. Her webinar on June 16 will focus on ways that ordinary people with average incomes can grow wealthy over time. The first section of the webinar will discuss time-tested investment and financial management strategies and the second section will describe dos and don’ts for handling a financial windfall. Resources for each topic will be shared including the Rutgers Cooperative Extension Financial Fitness Quiz: http://njaes.rutgers.edu/money/ffquiz/.

Thursday, June 16, 1-1:30 p.m. ET: 2016 MFLN PF VLE Wrap Up This half-hour event is designed to allow participants to share their own experiences from the 3 previous webinars, and to share findings from the assignments given during those sessions. Drs. Collins, Gillen and O’Neill be be on hand to guide this interactive discussion. If you are interested in sharing your experiences during this session, please email me at mollyh2@extension.org.

We hope you’ll join us for 3 days of interactive and engaged learning. For more information, click here.

How to Pay Off Student Loans Quickly

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Many active and former service members have student loan debt, which is like a double-edged sword. While borrowing money for post-secondary education often helps improve someone’s future earning ability, it also can lead to emotional distress and/or financial strain and delay savings and independent living arrangements.

Student loans impact students in many ways besides their actual dollar cost (i.e., repayment of money borrowed, plus interest). In the last decade, as the use of loans to attend college has increased, so-called “crowding out effects” have become noticeable. In other words, money required to make student loan payments is already “spoken for” and unavailable for other purposes such as homeownership, entrepreneurship, and retirement savings.

Not surprisingly, many student loan borrowers want to “get on with their financial life.” When student loans are repaid, money is freed up for other expenses (e.g., car loan payment) and savings for future financial goals (e.g., buying a home). Thus, it is smart to pay off student loan debt as quickly as possible. Below are 10 ways to do this:

  • Reduce Spending– Try to ‘find” $1 to $5 a day by cutting expenses (e.g., brown bagging lunch to work and avoiding vending machine snacks) and reallocate this money toward larger student loan payments.
  • Earn Extra Income– Freelance skills and experience with “side jobs” that bring in extra money and use this money to make larger student loan payments.
  • Make Bi-Weekly Payments– Like bi-weekly payments on a mortgage, splitting monthly student loan payments into half-payments every two weeks results in an extra monthly payment made every year.
  • Apply a Cash Windfall– Use all or part of large sums of money (e.g., income tax refund, returned security deposit, retroactive pay, and end-of-year bonus) to repay student loan debt. Another good sum to apply toward debt is the amount taken as a student loan interest tax deduction on federal income taxes.
  • Request Cash Gifts– Instead of receiving a holiday or birthday gift that you may not ever use or wear, tell potential gift givers that you would prefer to receive cash with which to repay student loan debt.
  • Use PowerPay- If student loans are one of several outstanding debts that you have, prepare a Powerpay debt reduction calendar at https://powerpay.org/. When a debt is repaid, apply its former payment to a remaining debt. Eventually more money will be applied to student loans and they will be paid off faster.
  • Get Help from an Employer– Some employers are providing cash with which to make student loan payments as an employee benefit to recruit and retain young employees. Even if your job does not have a formal benefit policy to help with student loans, it may not hurt to ask.
  • Get a Loan Discount- When you reduce loan interest rates, more of each payment goes toward principal and less toward interest, thereby paying debt down faster. Some lenders reduce loan interest (e.g., by a quarter to a half percent) when student loan payments are automatically deducted from a bank account.
  • Consider Refinancing- There are private companies that refinance student loans. This strategy can simplify bill-paying, by incorporating separate loans into one, and may lower interest rates. Disadvantages include loan origination fees and inability to access federal loan forgiveness or income-based repayment programs after refinancing.
  • Consider Consolidation– Like refinancing, grouping many smaller loans into one big one makes loan payment convenient. However consolidation could extend the payback period and increase the amount of interest paid. It may also not be available for private student loans. Consolidation should be used only if it makes economic sense (e.g., lower interest), perhaps combined with the first five strategies, noted above, to repay debt quickly.

For more information about types of student loans and how to repay them, visit the Federal Student Aid web site at https://studentaid.ed.gov/.

Our team presented a webinar on student loan issues in November 2015. Watch the recording of this session here: https://learn.extension.org/events/2161

Credit Score Basics

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Photo by Jason Rogers
Photo by Jason Rogers

Remember those report cards that told you (and your parents!) how you were doing in school? Maybe you thought those days were over, but they’re not. Every day, millions of people are “graded” with credit reports and credit scores.

Today at 11 a.m. ET, the eXtension Military Families Learning Network Personal Finance Team will host a a webinar called Credit Scores: What’s New? Below is a list of basic information about credit scores that military families and the financial educators and counselors who serve them need to know:

  • A credit report is a summary of someone’s history of paying debts and other bills. It is prepared by credit reporting agencies (a.k.a., credit bureaus) and used to make business decisions by those who have a legitimate need for the information. The three major credit bureaus are Equifax , Experian, and TransUnion. A good analogy for credit reports is report cards at elementary schools that provide a detailed summary of students’ performance.
  • Credit scores are a three-digit number calculated by statistical analyses to measure the risk that a borrower will become delinquent or default. It is a weighted average of factors that have been shown to be related to the creditworthiness of individuals. The higher a person’s credit score number, the better. A good analogy for credit scores is a grade point average used to measure college students’ academic success.
  • The most commonly used credit score is the FICO score, which ranges from 300 (low) to 850 (high). The average FICO credit score in the U.S. in early 2015 was 695 according to Fair Isaac Corporation, the FICO score creator.
  • The better your credit score “GPA,” the better your chances of obtaining a loan or credit card and obtaining lower-cost credit that can save hundreds, or in the case of home mortgages, thousands of dollars of interest over the length of a loan. Credit scores are also used in setting rates for insurance policies. In addition, potential landlords and employers use them as a character reference.
  • The most important factor in a person’s FICO credit score is bill payment history, which is weighted at 35% of the total score. Other key factors are the amount owed as indicated by the proportion of outstanding debt to available credit limits (30%), the length of a person’s credit history (15%) , the number of recent credit inquiries (10%), and the mix of types of credit (e.g., credit cards, auto loan, mortgage, etc.) used (10%).
  • There is no federal law on the books (yet) that mandates free credit scores upon request like there is for credit reports. However, many credit card companies now provide free credit scores on monthly statements or online as a way to attract and retain customers. Examples of companies that provide free credit scores include Barclaycard US, Capital One, Citibank, Commerce Bank, Discover, First Bankcard, and USAA.
  • Another way to get a free credit score is for persons applying for a car loan, mortgage, or home refinancing to simply ask their prospective lender for this information. Especially for mortgages, lenders have probably already charged loan applicants a fee to check their credit score.

So, if you thought your report card and GPA days were over, think again. Your credit report and credit score are a “snapshot” of your credit history at a particular point in time and you are constantly being “graded.” Paying bills on time and not becoming overextended are the two best ways to raise your credit score.

For more information about credit scores, take the Credit Score Quiz.

Credit Score Refresher

By Ayesha Haider, BA, MBA, AFC Candidate

Your credit score is often the first indicator that banks, potential employers and landlords and financial institutions turn to when assessing your financial health and deciding whether to do business with you. But what exactly makes up a credit score? Are certain items given more weight than others in determining a score? And how good or bad is your score compared to the rest of the Nation?

Let’s start with the basics:

What is a credit score?

A credit score is a number derived from your current and past financial behaviors which lenders and other organizations use to assess how much risk they will be taking on by extending you credit. There are numerous credit scores that are used by financial institutions, and each of these has a different formula for calculating your level of risk. The most well-known and widely used score is the Fair Isaac Corporation’s FICO score.

What makes up a credit score?

A credit score is determined by collecting and classifying individuals’ financial transactions. The FICO score is calculated based on payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%) and new credit (10%). Keep in mind that your credit score is constantly changing with every financial decision you make – from taking out a new loan, to paying your bills every month – so it is important to know what will have an adverse or beneficial effect on your score.

What is not included in a credit score?

Your credit score will never be affected by your race, religion, national origin, sex or marital status. It will also not take into account where you live, your salary or employment history, age or the interest rates that you are currently being charged. Oftentimes, your credit score may suffer as a result of stolen identity, illness or other unforeseen life events. It is important to know that you reserve the right to have a personal statement included in your credit report that can be viewed by potential lenders and may assist in explaining a poor credit score.

How “good” is my score?

A good or bad credit score really depends on which score you are looking at and what financial transactions you will be using your credit score for. Most scores range from 301 to 850 with anything above 650 being considered a “good” score and anything below this number to be considered “bad”. Experian’s 2015 state of credit report shows that the average score for Americans last year was 669 (up three points from the 2014 average of 666).

Knowing how your credit score is calculated and what it is used for is the first step to working towards (or maintaining) a favorable credit score. To obtain your FICO score, visit the myFICO website or visit your base Personal Financial Counselor who may be able to obtain your score free of charge.

Credit Scores- What's New- (1)Join us next week on Tuesday, May 3 at 11 a.m. ET for Credit Scores: What’s New? with Dr. Barbara O’Neill and Rod Griffin from Experian. This 90-minute webinar will cover the fundamentals of credit reporting and credit scoring and what you must do to get the credit you want and need. This webinar is approved for 1.5 CEUs for AFCs through AFCPE and CPFCs through FinCert.

Financial Tips for a Stress-Free Relocation

By Ayesha Haider, BA, MBA, AFC Candidate

Relocation is a challenging time for even the most seasoned service members who have experienced numerous PCS moves. In addition to the emotional difficulties of leaving friends and familiar surroundings behind is the burden of starting from scratch in a foreign location. While finances may be the last thing on your mind during this hectic time, the following tips are sure to ensure a smoother, less stressful relocation for you and your family:

Photo by Chris Waits
Photo by Chris Waits
  1. Really know what your expenses are: On the surface, the expenses associated with relocation may seem fairly obvious but there are many other “hidden” costs of relocation that are often overlooked and may result in a stressful relocation experience. Basic examples include, fuel (if you are driving to your new location), furniture/appliance replacement (for damaged items not covered by insurance), and costs associated with buying/selling a house or car. Some less obvious examples include the costs of living “on the go” such as eating out more. Keep track of your expenses by creating a list of potential expenditures associated with the move. This can even be a brainstorming activity for the whole family and a great way to introduce your children to the basics of financial management.
  1. Have an emergency fund: It is important to have an emergency fund that covers 3-6 months of expenses regardless of if you are relocating or not. However, during relocation an emergency fund can provide you with an unprecedented level of financial security. Many of the costs associated with relocation are reimbursed but you are not likely to receive reimbursement for many weeks after they have been incurred. Knowing that you have a cushion to cover any short term financial needs associated with the move can give you the peace of mind to focus on other important matters such as finding accommodation or researching school districts.
  1. Update your bank and utility accounts: it is crucial that your banking institutions and credit card companies are aware of your move and have your new address as soon as possible. This prevents them from sending sensitive information to an older address that may be occupied by another tenant now. It also prevents credit card companies from freezing your account due to transactions you make while on the move. In addition to your financial accounts, remember to close any utility accounts under your name that you will no longer be using. To avoid penalty fees for early termination of contracts, refer to the Servicemembers Civil Relief Act (SCRA).
  1. Create a new budget for your new life: A new living situation is most likely going to have an effect on your financial situation as well. You may be paying more or less rent, have a higher or lower BAH, and may have less disposable income as a result of one spouse having to resign from their job as a result of the move. Once you’re settled into your new home, be sure to create a new budget to reflect these changes and to see how they affect your saving and investment goals.
  1. Make use of your resources: Knowledge is power – and knowledge is also the most important tool you have at your disposal when PCSing. Conduct research on the new location you are moving to and shop around for the best deals on housing, cars and other purchases early on in the moving process. The internet is a great source of information on both your new location and any obstacles you might be facing while planning your move. It’s also a good idea to tap into your network of friends and family to get first-hand information from anyone who has lived at this location in the past or currently resides there. There are also numerous organizations on base to help with your transition, such as the Airman & Family Readiness Center that offers a Plan My Move tool.

Following the tips listed above and staying positive and focused throughout the PCS process is sure to make your relocation experience less stressful and virtually hassle-free. Treat relocation as a valuable life lesson that allows you to practice your flexibility and planning skills and remember to share best practices of your moving experience with those around you to help them in their time of transition.

Challenge Yourself to Save Money

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

Aside from making a New Year’s resolution, there is perhaps no better time for military families to save money than April. If they are early tax filers, a tax refund may be coming or may have already arrived. In addition, big winter home heating bills are in the rear view mirror and, ideally, lingering holiday credit card bills too.

Photo by Steven Depolo
Photo by Steven Depolo

What’s the best way for military families to save money? There is no one right answer. Automatic payroll deductions work well for many people, For example, they have deposits into a credit union account or Thrift Savings Plan retirement savings automatically taken out of their paycheck, before they spend it. Other people do well saving loose change in a jar and depositing it periodically in a savings account as the jar fills up.

A third way to save money is to complete a savings challenge that gradually ramps up deposits. While many people start these challenges during the first full week of January, as a New Year’s resolution, they can be started in April or at any other time. Another option is to make a “catch up deposit” in April, perhaps using tax refund money, and then complete a calendar year challenge from that point forward until the end of December.

Below is a description of four different savings challenges and how they operate:

The 52-Week Money Challenge– Perhaps the oldest of the money challenges (original source unknown) that are all over social media, especially in January, this challenge begins with a $1 deposit during Week #1. The weekly deposit rises by $1 per week and reaches $52 during the final week of the Challenge (Week #52), with total savings of $1,378. Some people have suggested doing the 52-Week Money Challenge in reverse. Some people have more money in January (e.g., from holiday gifts or a year-end bonus at work) than they do in December, which tends to be a very expensive month for many people with holiday gifts and travel. The “reverse challenge” strategy is also very motivating. After five weeks, you already have $250 saved. A third way to do the 52-Week Money Challenge is to pick an amount each week that you can afford (e.g., $25 one week and $16 the next) and complete the challenge in any order. Tracking forms are available at

http://walton.ifas.ufl.edu/fcs/files/2014/01/52-Week-Money-Challenge.pdf

https://www.affinityplus.org/Portals/0/Documents/Blog/52Week.pdf

https://www.lgfcu.org/sites/default/files/docs/52week_challenge.pdf

The 52-Week Youth Money Challenge– I created this challenge for parents to use with their children. See http://www.slideshare.net/BarbaraONeill/52-week-money-challenge-for-youth0315. Weekly savings deposits are 10 weeks each of $1, $2, $3, $4, and $5, resulting in $150 of savings. Week #51 is an optional $25 from birthday gifts and Week #52 is an optional $25 from holiday gifts ($200 total). There is also an option for parents to provide a 50% ($100) match of their child’s savings, resulting in total annual savings of $300.

The 15-Week Money Challenge– I created this challenge for high school and college students and adults with short-term financial goals. See http://www.slideshare.net/BarbaraONeill/15-week-college-student-money-challenge0715. The Basic Challenge includes five weeks of $10 savings, five weeks of $20 savings, and five weeks of $30 savings, resulting in a total accumulation of $300. The “Hard Core” Challenge starts with a $10 weekly deposit and ramps up the savings deposit by $5 per week for a final deposit of $80, resulting in a total accumulation of $675. The 18 students in my Fall 2015 Rutgers University Personal Finance class took the challenge as an initial pilot test and collectively saved almost $6,000 over the course of the semester.

The $2,500 Savings Challenge– I created this challenge to ramp up the amount saved from the 52-Week Money Challenge. I also like round numbers. Hence, the $2,500 savings goal. See http://www.slideshare.net/BarbaraONeill/50-week-2500-savings-challenge. The challenge begins with a $2 deposit during Week #1. The weekly deposit rises by $2 per week and reaches a high of $98. There are two weeks “off” at a saver’s discretion and a $50 deposit is made during the final week of the Challenge (Week #50), with total savings of $2,500. Like the 52-Week Money Challenge, the $2,500 Savings Challenge can be done forward, backward, or in any order that works for individual savers.

Want to save money for future financial goals? Challenge yourself and/or your children to save by completing one of the four savings challenges described above. For more information about the benefits of saving money, visit http://articles.extension.org/pages/8634/financial-security:-saving-and-investing and http://www.americasaves.org/.

 

IRAs: Last Chance to Reduce 2015 Income Taxes

By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, oneill@aesop.rutgers.edu

It’s “crunch time” for federal income taxes. While the tax filing deadline is usually April 15, it is April 18 this year due to a Washington D.C. holiday called Emancipation Day. Bottom line: taxpayers, including most military families, have an extra weekend to prepare their taxes. That’s the good news. The bad news is there is not much you can do now to lower your tax bill. Opportunities, such as charitable donations and Thrift Savings Plan contributions, and capital losses on investments, all went out the window at midnight last New Year’s Eve.

A photograph of a male solider sitting in a classroom at a desk with a tax form in front of him.
U.S. Army photos by Pfc. Ma, Jae-sang

The only way that taxpayers may be able to save money on taxes now is to contribute to a tax-deferred individual retirement account (IRA). The deadline for deposits to 2015 traditional and Roth IRAs and SEP IRAs for self-employed workers is also April 18, 2016 (see https://www.irs.gov/Retirement-Plans/Traditional-and-Roth-IRAs). Below are some key points to know about IRAs and the tax savings that they can provide:

  • There are many types of IRAs: Roth, Traditional, Rollover, and Spousal, to name a few. Not every IRA provides an initial tax deduction, but they all provide tax-deferred growth on both the amount contributed (saved) and earnings on that money. Roth IRAs also provide the potential for tax-free growth.
  • The maximum contribution allowed by law for IRAs (Roth and/or Traditional) in both 2015 and 2016 is $5,500 for workers under age 50 and $6,500, with an additional $1,000 catch-up contribution, for workers age 50 and older. These numbers assume an earned income equal to these amounts. Workers can contribute the smaller of the annual limit allowed by tax law or their taxable compensation during the calendar year.
  • Income limits apply to qualify to contribute to Roth IRAs. For 2015 income taxes, the adjusted gross income (AGI) phase-out range for taxpayers making contributions to a Roth IRA was $116,000 to $131,000 for single taxpayers and heads of household and $183,000 to $193,000 for married couples filing jointly.
  • When workers qualify by income for a partial Roth IRA contribution, they can put the remaining amount of the contribution limit into a Traditional IRA (e.g., $2,500 Roth IRA and $3,000 Traditional IRA in 2015).
  • If single workers, or both spouses in a married couple filing jointly, are not covered by an employer’s retirement plan, Traditional IRA contributions are deductible regardless of income.
  • If a worker has an employer retirement plan, income limits apply to qualify to deduct a contribution to a Traditional IRA. The phase-out AGI ranges for 2015 income taxes are $61,000 for single taxpayers and heads of household and $98,000 to $118,000 for married couples filing jointly.
  • If workers don’t qualify, income-wise, for either a tax-deductible Traditional IRA or a Roth IRA, they can still fund a non-deductible Traditional IRA and later convert it to a Roth IRA, if desired.
  • Workers can’t make contributions to a Traditional IRA once they reach age 70½. However, they can still contribute to a Roth IRA, provided that they have earned income (e.g., salary from a job or net earnings from a small business or freelance work).

For more information about IRAs, visit this IRS page with frequently asked questions (FAQs): https://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-IRAs-Contributions

Three things you thought you knew about life insurance…. But didn’t

By Ayesha Haider, BA, MBA, AFC Candidate

Visit https://learn.extension.org/events/2496 to join this webinar or view the recording
Visit learn.extension.org/events/2496 to join this webinar or view recording

Life insurance is probably the most dreaded financial product for people to start a conversation about since it forces us to acknowledge our own mortality. A 2013 study by State Farm Insurance found that parents would rather talk to their kids about drugs, alcohol, religion or politics than life insurance. Unfortunately, delaying or foregoing the conversation about life insurance exposes your family members and loved ones to a significant amount of financial risk. According to a 2015 study, cost is the reason most Americans give for not owning life insurance, however, 80% of consumers misjudge the price for term life insurance. In addition to cost, the following are three common misperceptions that people have about life insurance:

  1. Life insurance is for people who have dependents: This is a mistaken belief among people who are single or who do not have dependents that are reliant on them for their financial well-being. However, even an unmarried individual’s death is likely to impact those around them both emotionally and financially. There are funeral and other “end-of-life” expenses to cover and, in some cases, your death may result in a loved one being responsible for your debt and other financial obligations. Investing in life insurance as a single adult helps shield relatives and friends from any financial burdens your death may cause. It is also a good way to leave a legacy by donating to a charitable organization that you care about or a relative that you’d like to provide for.
  1. If I live past a certain age my life insurance will go to waste anyway: While this is true of term life insurance – which provides coverage up to a certain age – it is not true of whole or permanent life insurance. This alternate type of life insurance has a longer validity than term life insurance and will provide coverage until the policyholder reaches the age of 100. Permanent life insurance usually has a higher premium than term life insurance, but that is because it combines a traditional death benefit with a savings plan that allows you to build up cash value that grows tax deferred.
  1. If I have poor health I will be rejected for life insurance benefits or my premiums will be much higher: In today’s competitive financial landscape insurance companies are catering to ever sector of the market including high risk individuals. Whereas high risk life insurance is likely to have higher premiums and more restrictions than a traditional life insurance policy, the benefits of having life insurance far outweigh the costs. This is especially true of veterans and servicemembers who have access to a wide range of life insurance products and packages offered by the VA at a very reasonable cost.

Life insurance is sure to benefit individuals in all stages of life regardless of their medical history and is a critical part of becoming financially responsible and independent. Don’t let misconceptions or discomfort deter you from making arrangements for your loved ones to be taken care of after you pass. For more information about life insurance visit www.lifehappens.org.

Join us today at 11 a.m. ET to learn more about life insurance in a 90-minute webinar with Dr. Barbara O’Neill and Ruth Berkheimer. This webinar will focus on basic insurance principles and terminology, who needs life insurance, reasons for buying life insurance, life insurance policy features, the life insurance needs analysis process, tips for buying life insurance, and life insurance needs and policy options for service members and military families, including SGLI, Family SGLI, SGLI disability extension, VGLI and TSGLI. To find supporting resource, register for or join this free webinar, visit https://learn.extension.org/events/2496

5 Easy Ways to Prevent Identity Theft

By Ayesha Haider, BA, MBA, AFC Candidate

Identity theft is referred to as the “fastest growing white collar crime in America” by the Office of the Inspector General. Having your identity stolen can result in your hard earned funds being fraudulently withdrawn from your account and it can also have serious implications for your credit report and score, negatively impacting your eligibility for employment and favorable loan terms. The following methods outline some basic ways you can protect your personal information from falling into the wrong hands:

  1. Learn to identify phishing scams: Phishing requests are emails or other electronic correspondence you may receive asking for your personal information. Such requests are made to seem like they are being sent by a legitimate organization that you are affiliated with such as a bank, department store, or email-hosting service. Phishing requests are notoriously difficult to identify and often even the most Internet-savvy of us fall victim to these elaborate schemes. Learn how to tell if an email is a phishing scam by using CIO.com’s very useful guide or take the phishing IQ test to see if you can distinguish a phishing scam from a legitimate request.
  1. Secure your personal information: At home, make sure your personal information is stored in a secure location or is password-protected on a secure computer. Do not carry your social security card in your wallet and only provide your social security number when absolutely necessary. It’s also a good idea to shred any documents you don’t need–such as credit applications and offers or bank statements–that contain sensitive information. If you are required to provide an organization with your personal information, ask them what exactly they need it for and what measures they have in place to protect it.
  1. Check your Credit Report: Obtaining a free credit report once a year is an effective way to make sure that your identity has not been stolen. Identity thieves often open accounts or obtain loans using your personal information, and these activities will show up on your credit report. You may even consider implementing a credit freeze which restricts access to your report and makes it more difficult for identity thieves to open accounts under your name.
  1. Monitor your statements: A survey conducted by the Federal Reserve Bank of Boston found that in 2012, more than 70 percent of consumers in the U.S. had at least one credit card. Unfortunately, the ease and convenience of using a credit card comes with the additional risk of having credit card information stolen. It is important to routinely monitor your credit card statements to identify any unauthorized activity on your account. If you discover that your credit card information has been compromised, use this helpful guide to learn what to do next.
  1. Guard your mail: Identity thieves often obtain personal information by stealing your mail and/or responding to pre-approved credit offers you receive in the mail. Avoid falling victim to mail fraud by checking your mail frequently and shredding any financial offers/documents you receive in the mail. To learn more about identity theft through mail, visit the S. Postal Inspection Service website.

The best way of preventing identity theft is educating yourself on how you can best protect your personal information. Read up on what to do if your identity is stolen and monitor your credit card and bank account statements routinely to identify and unauthorized transactions soon after they occur.

A photograph of a man wearing fake glasses, nose and mustache.
Photo by Jeff Turner

To learn more ways to protect yourself and empower your clients against identity theft schemes, join our webinar on Tuesday, March 15 at 11 a.m. ET. Dr. Barbara O’Neill and Carol Kando-Pindea of the Federal Trade Commission will present a 90-minute webinar that identifies new ways thieves are stealing personal information and ways to prevent becoming a victim.

4 Very Serious Implications of Identity Theft

By Ayesha Haider, BA, MBA, AFC Candidate

Credit Card Theft by Don Hankins
Credit Card Theft by Don Hankins

Despite the attention that identity theft has received over the past few years, many of us still view it as a minor crime that happens once in a blue moon. While we take measures to protect ourselves from burglary, theft and other more “threatening” crimes, many Americans lack the awareness or resources to protect themselves from having their identities stolen. The Identity Theft Resource Center reports that financial identity theft is the most common type of theft, followed by government and medical identity theft. Furthermore, a 2015 Gallup poll reported that while the incidence of credit card fraud in 2015 declined by 5% last year, the incidence of identity theft among Americans increased by 4% and that 16% of individuals interviewed had been victims of identity theft. Identity theft has been called the fastest growing white collar crime in America by the Office of the Inspector General and, with more than 1 in 10 Americans being targeted, it is crucial for you to learn how identity theft can affect you and your family.

  1. Your Credit Report/Score: The financial consequences of having your identity stolen are far-reaching and may have long-term implications. A thief can use your identity to apply for credit, open additional accounts and access a host of other financial resources. These activities can impact your credit report – a resource that is used by employers, insurance agencies, and potential lenders to assess your financial well-being.
  2. Access to Credit: Identity theft can have a long-term effect on your credit score if the thief obtains new loans or accounts under your name. Your credit score is used by banks and other institutions to assess your suitability for a loan and also to determine what interest rate to charge you. Frivolous activity on your account as a result of identity theft is likely to result in your being denied access to funds, or in your being charged a higher interest rate.
  3. Bank account: Given access to a few key pieces of personal information, an identity thief can obtain access to the funds in your checking, savings and investment accounts. Your funds can be used to purchase goods, obtain cell phones or utilities in your name, or the funds can be drained from your account.
  4. Terrorism: While the relationship between identity theft and terrorism may seem a bit far-fetched, the reality is that identity theft has played a major role in many terrorism incidents, including 9/11 and the recent attacks in Paris. Nefarious individuals can use your identity to create fake IDs that allow them to cross borders undetected, or purchase resources in your name that cannot be traced back to them.

Identity theft is slowly but surely becoming the most common white collar crime of our time. The above list addresses just a few of the ways that you and your family can be impacted by having your identity stolen. Be proactive in protecting yourself and your assets against identity theft by following these 10 simple steps.

For more ways to prevent becoming a victim of identity theft, join our March 15 webinar, Identity Theft: How to Reduce Your Risk with Dr. Barbara O’Neill and Carol Kando-Pineda, Counsel in the FTC’s Division of Consumer and Business Education division.