END-OF-YEAR MONEY CHECKLIST

As we approach the end of the year, consider these actions to help create the foundation for financial success in 2022:

  • Review spending for the year. Comparing your actual spending with budgeted amounts will help you plan spending for the coming year. For the upcoming year, track spending with an app, spreadsheet file, Google doc, or a written record.
  • Use flexible spending account funds.  Be sure to spend any money in a flexible spending account on qualified medical expenses before the end of the year, or those funds might be lost. However, due to COVID-19, you may be allowed to roll over the full balance into next year. Contact your benefits department to see if you qualify.  
  • Donate to charity. This will not only create a tax saving, but will also help people in your community and around the world.
  • Create a backup plan. Review the beneficiaries on your financial accounts. You should have a durable power of attorney to handle your financial activities if you are not able to do so.  A health-care proxy (power of attorney) is someone to speak on your behalf regarding medical care when you are not able to do so. A will sets how your assets will be distributed after you die.
  • Consider increased retirement contributions. With increased limits for 2022, plan to increase the amount set aside for long-term financial security while reducing current taxes.
  • Conduct a life audit.  Start with identifying your short-term and long-term goals with sticky notes or index cards.  Then, sort your goals by category, such as personal development, work/career, financial, travel, family, community service, and health. Next, organize within a category based on time of accomplishment, which might include: now/soon, always/everyday, later this year, the next year or two, and someday. Take photos of your notes, place them in a visible location, or use an app such as OneNote as a reminder of these targets. Finally, reflect on your goals by determining why you have certain goals and what actions you need to take. Be sure to set deadlines. Also consider how your goals relate to the type of life you desire for yourself.  Do your goals reflect your beliefs, values, work situation, and personal relationships?

For additional information on year-end financial planning, click here.

Teaching Suggestions

  • Have students talk to others about recommended financial actions to take before the end of the year.
  • Have students create an action plan and timeline for a specific goal.

Discussion Questions 

  1. What attitudes, behaviors, and circumstances might restrict a person from taking certain year-end actions?
  2. Describe information sources and personal contacts that might be used to obtain guidance for achieving a specific goal. 

Categories: Chapter 1, Chapter 2, Financial Planning | Tags: , , | Leave a comment

ARE YOU AN IMPULSE BUYER?

During the COVID quarantine, online buying became an addiction for many.  During this time, impulse spending increased by an estimated 18 percent.  Unplanned buying occurs when you purchase more than intended.  Or, buying extra grocery items while shopping when you are hungry. Or, a bad day at work results in a purchase to overcome anxiety.

Most spending occurs to make a person feel better. A survey reported that 72 percent of respondents reported a positive mood from an impulse buy, while 65 percent reported that an impulse buy can reverse a bad day. Others reported that they buy things to help loved ones feel better.

Three personality types are often associated with impulse buying:

  1. Sensation seekers may not consider the risks of impulse buying but desire the spending experience when they feel guilty, bored, or disengaged.
  2. Impulse buying tendency buyers are those who are aware of their behavior but don’t necessarily see it as a problem.
  3. Consumer-driven self-identity is a desire to be part of emerging trends and high-end brands to present an image of status, style, and good taste. 

To take advantage of in-person shoppers, stores make use of sensory environments, bold and graphic signage, associations between brand and positive feelings, checkout line “bonus” items, and price discounts and markdowns. Online retailers encourage buying with the use of time-based and quantity-based deals, heavily targeted social media ads, abandoned shopping cart emails, and free shipping.

Symptoms of impulse buying include:

  • you shop to feel better, which can be dangerous; find other ways to channel your energy
  • you shop to compete with buying to stay up or ahead of others
  • you’re bored; plan something else to do–go for a walk, read, write, draw, email a friend
  • your finances are suffering; track spending to avoid unnecessary purchases   
  • you have too much stuff, much of which you will never use

To reduce your impulse buying…

  • avoid temptations by unfollowing your favorite brand, unsubscribing from marketing emails, clearing browser cookies, blocking favorite sites, deleting shopping apps from your phone, and unsaving credit card information on your browser.
  • create a “fun” budget item as therapy
  • save to buy a “big” item to avoid unneeded spending
  • wait 24-48 hours before buying an item
  • try a no-spend challenge in which you buy nothing for a set number of days, weeks, or months to save money and change past habits. 
  • ask yourself: “Do I need this today or tomorrow?” If not, don’t buy it.

For additional information on impulse buying, click here

Teaching Suggestions

  • Have students talk to others to ask about any actions they take to avoid impulse buying.
  • Have students create an in-class presentation or video that dramatizes actions to avoid impulse buying.

Discussion Questions 

  1. What types of impulse buying situations have you experienced or observed?
  2. How might impulse buying affect long-term financial security? 
Categories: Chapter 6, Wise Shopping | Tags: | Leave a comment

Pay-Per-Mile Car Insurance

During the pandemic and at other times, if you drive very little, consider pay-per-mile car insurance to lower your premium. According to the U.S. Department of Transportation, the average American drives about 13,500 miles a year. Insurance companies estimate that a person would likely benefit from pay-per-mile insurance program if they drive less than 8,000 miles annually.

Pay-per-mile insurance may be appropriate for people who work from home, are in college, regularly use public transportation, or who have a second vehicle that is rarely used. This coverage has a base rate, which is determined similar to traditional auto insurance. After that, the per-mile rate is added on. High mileage, aggressive driving, and overnight driving can result in higher auto insurance rates. 

Usage-based insurance programs use telematic technology with an app or in-car device to track your driving. Instead of in-car monitoring systems, some companies require that you submit a photo of your odometer each month.

Another type of usage-based insurance is pay-as-you-drive with rates based on driving habits. With this coverage, rates may increase as a result of bad driving habits. Behaviors that are monitored include hard braking, acceleration and speed, the time of day you drive, mileage, and cellphone use.

For additional information on pay-per-mile car insurance, click here

Teaching Suggestions

  • Have students talk with others to learn about their current auto insurance coverage and costs.
  • Have students conduct online research for pay-per-mile and pay-as-you-drive auto insurance to obtain additional information on the features, benefits, and drawbacks of these coverages.

Discussion Questions 

  1. What features of pay-per-mile car insurance might be appropriate for you or people you know?
  2. How might a person reduce the amount paid for auto insurance? 
Categories: Car Insurance, Chapter 8 | Tags: | Leave a comment

Travel insurance: What does it cover and when do you need it?

Not all travel insurance is the same. Some policies only cover certain kinds of trip cancellations. Here are some questions to help you decide if you need travel insurance and what kind of policy will work best for your trip.

  1. What does it cover?

Cancellations: Some policies will only cover trips canceled for certain reasons such as weather or illness. And policies may have exclusions for cancellations due to a preexisting medical condition or if an epidemic or pandemic is declared. You can also pay more for “cancel for any reason” coverage.

Medical coverage: You can also buy medical policies that cover emergency medical and dental expenses while you’re traveling that aren’t covered by your regular health policy. Some policies cover medical evacuations, which can be costly depending on where you’re visiting and probably wouldn’t be covered by your regular health plan.

Other coverage: You can also find policies to cover medical evacuations, lost luggage, and many other potential situations.

Make sure you know exactly what a plan covers before buying.

2. What’s your risk?

Cancellation penalties: You may be able to cancel some parts of your trip, including hotels and tours, without financial penalty. Check the cancellation policies for each item you’ve booked in advance and see how much money you’d lose if you had to cancel all or part of your trip.

Medical expenses: Check with your health plan to see if it would cover medical expenses if you got sick or hurt on your trip. This is especially important if you’re traveling abroad because most health plans, including Medicare, won’t cover treatment in another country. Think about how you’d get to a hospital or medical care if you’re traveling to a remote area.

Coronavirus risk: Check the Centers for Disease Control and Prevention website for the latest information and guidance related to COVID-19.

3. Am I already covered?

Your homeowners or renters insurance may include travel coverage. Ask your insurer or agent what your policy covers. Some credit cards include travel protections or may offer travel insurance, too, so ask when you use the card for trip expenses.

When you’re planning your trip, consider what you paid and decide if it’s something that makes sense for you. If you decide travel insurance is a good option for you, you can search the internet to compare plans and prices.

For more information, click here.

Teaching Suggestions

  • Ask students if they or their family members have purchased travel insurance.  If so, what have been their experiences?  If not, why they chose not to purchase travel insurance?
  • Ask students to make a list of travel circumstances when it might be wise to purchase travel insurance.

Discussion Questions

  1. Under what scenarios should you spend more money for “cancel for any reason” travel insurance?
  2. Is it better to buy travel insurance from tour operators, cruise lines representatives or travel agents?  Explain.
  3. Is it essential for an international traveler to consider travel insurance?  Why or why not?
Categories: Chapter 8, Chapter 9, Health Insurance | Tags: , | Leave a comment

NON-OWNER CAR INSURANCE

If you don’t own a car but regularly drive a rental vehicle or another person’s car, consider non-owner car insurance. This coverage provides liability protection to pay for injuries and property damage of others in an accident. Damage to the car you are driving or your injuries are usually not covered. In some states, you may also obtain coverage for uninsured/underinsured motorist protection and medical payment for your injuries. 

Recommended situations for non-owner car insurance include:

  • ·         When using a car-sharing service, such as Zipcar or Turo.
  • ·         To maintain continuous coverage between selling your car and buying a new one.
  • ·         If you frequently rent cars.
  • ·        If you frequently borrow other people’s cars, especially if you want a higher level of coverage than that of the vehicle’s owner.
  • ·         When obtaining or reinstating a driver’s license, some states require insurance to show “proof of financial responsibility.”

If you frequently borrow a car from someone in your household, non-owner insurance is not recommended.  Instead, you should be included as a covered driver since all driving-age household members may be required to be listed on the policy. If you drive rarely, buy insurance when renting a car or you may be covered on the policy of the person whose car you borrow, if driving with their permission.  

To obtain non-owner car insurance, directly contact an insurance company or agent. Most insurers don’t provide non-owner quotes online. Non-owner car insurance usually has a lower cost than the same liability coverage if you owned a car.

For additional information on non-owner car insurance, click here.

Teaching Suggestions

  • Have students contact an insurance agent to obtain rate information for non-owner car insurance.
  • Have students create a visual (poster or slide presentation) describing situations in which non-owner car insurance might be appropriate.

Discussion Questions 

  1. When might non-owner car insurance be of value to a driver?
  2. Describe actions people might take to determine if they have adequate auto insurance coverage.  
Categories: Car Insurance, Chapter 8 | Tags: | Leave a comment

Money Habits of Women and Men

Based on recent research, findings comparing the financial habits of women and men include:

  • Overall, single men outspend women, which may be due to higher average earnings. Men spend more on food and transportation, while women have higher spending for clothing. Both groups have similar spending for entertainment.
  • Women are wiser shoppers, buying items on sale and using coupons more often than men.
  • For debt, including credit cards, student loans, auto loans, personal loans, home equity lines of credit, and mortgages, men have more debt than women.
  • For both groups, the main financial goals were saving for a vacation, paying off credit card debt, and improving their credit score.
  • As they near retirement, men had higher amounts in their retirement funds. However, women are more likely to participate in an employer retirement plan than men, and save a greater percentage from their paychecks.

For additional information on the money habits of women and men, go to:

Source #1

Source #2

Teaching Suggestions

  • Have students create a short survey to compare the spending, saving, and investing activities of women and men.
  • Have students create a visual proposal (poster or slide presentation) to suggest improved money management activities.

Discussion Questions 

  1. What factors might affect differences between the money management activities of women and men?
  2. Describe actions a person might take to improve money management activities. 
Categories: Chapter 1, Chapter 2, Chapter 5, Chapter_11, Credit Cards, Financial Planning, Investments, Savings | Leave a comment

VIN Check When Buying A Used Car

Every motor vehicle has a unique Vehicle Identification Number (VIN), which can be used to check the registration, title, and any insurance claims. The numeric characters in the VIN indicate: the country of origin; manufacturer and division; vehicle description, safety and type of engine; the manufacturer’s security code; vehicle’s model year; assembly plant; and vehicle serial number.

Several no-cost VIN-check services are available to identify potential vehicle problems when buying a used car. This service is especially important when purchasing a vehicle online through Craigslist or eBay. A VIN-check service may also be used to obtain information on your current vehicle.

The National Insurance Crime Bureau (http://www.nicb.org/vincheck) has a basic VIN check search tool that will tell you if a vehicle has been reported as lost or stolen, salvaged, or declared a total loss after an accident. 

VehicleHistory.com offers a more complete VIN check, such as fuel economy, ownership costs, and a price analysis. Also included are the selling history, recalls, manufacturer warranties, and price estimates for the best time to buy a certain make and model.

iSeeCars.com/VIN consider 200 data points to create a car history report with a price analysis, price history, projected depreciation, and the best times to buy and sell.

As always, when buying a used car have an ASE certified mechanic of your choice inspect the vehicle. Remember, nearly every used car is sold “as is.”  Also be cautious of vehicles with flood damage that were rebuilt and had their titles “washed” after a hurricane or other major storm. These cars often encounter failed electrical systems.

For additional information on VIN checks for used cars, go to:

Teaching Suggestions

  • Have students talk to others to learn about actions to take when buying a used car.
  • Have students create a visual proposal (poster or slide presentation) with mistakes a person should avoid when buying a used car.

Discussion Questions 

  1. What features of VIN-check services might help people improve the car-buying process?
  2. Describe situations in which a VIN check may be appropriate.  
Categories: Chapter 6, Wise Shopping | Tags: | Leave a comment

How to protect yourself from social media identity theft

If you use social media, you could be a target for identity theft. You can buy identity theft insurance – or it might be included in your homeowners or renters policy. But taking simple steps to protect your social media accounts can help you avoid most scams.

  1. Don’t post ID cards

It might be tempting to post a photo of a new license or ID card, but it may include your birthday and other identifying data.

  • Question quizzes and surveys

Watch out for quizzes that ask for personal information. Scammers ask questions with answers you might use for security login questions, such as the model of your first car, your first pet’s name, or your hometown.

  • Don’t overshare

Most social media sites and apps ask you about yourself, then display that information on your profile. Be careful what you give them. The more a scammer knows about you, the easier it is to create a fake account with your information. If an app allows it, keep your profile private.

  • Limit app sharing

Many apps let you sign in with a more popular app. But when you do, you usually agree to let the new app use data from the old one. If one app is hacked, scammers can get data from every app linked to it.

  • Close old accounts

Scammers look for old, unused accounts with outdated passwords that are easy to hack. If you don’t use an app, delete your account.

  • Protect family members

Teens are the most likely to overshare. They usually have clean credit histories, which makes their identities valuable. Seniors don’t use social media as often but might not know when they’ve been hacked. It’s a good idea to check the accounts of family members in those groups.

For more information, click here.

Teaching Suggestions:

  • Ask students how they protect their social media accounts.  What precautions are particularly useful to protect their identity on the Internet?
  • Why are teens more likely to overshare their personal information on the social media?

Discussion Questions:

  1. What can regulatory agencies, such as, the Federal Trade Commission and Consumer Financial Protection Bureau, do to protect your social media accounts?
  2. Should Facebook, Instagram, Whats App, etc. provide clear guidance on what to post (or not to post) on social media sites?  How it might be done to protect consumers?
Categories: Chapter 6, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Do you need identity theft insurance?

Victims of identity theft can be left with a bad credit record that can take months to correct. Here’s what you need to know about identity theft insurance and how to protect yourself.

  1. You may be covered

Some homeowners policies include coverage for identity theft. Check your policy or ask your agent to see if yours does. Other companies can add it to your homeowners or renter’s policy or sell you a stand-alone policy. These typically cost $25-$50 a year. Some credit monitoring services also provide identify theft protection or help with recovery.

2. What it includes

Identity theft insurance pays you back for what you spend to restore your identity and repair your credit. These costs can include fees, phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees. Some policies include credit monitoring and alerts and help you start the process to restore your identity. As with any insurance policy, make sure to know exactly what you’re purchasing and be sure to ask about deductibles and policy limits.

3. Is it worth it?

The U.S. Department of Justice reported recently that 7 percent of Americans were the victims of identity theft. Of those, half said it cost them less than $100, and 14 percent said they lost $1,000 or more. Banks and credit card companies already cover most or all losses due to fraud so most victims’ spend more time than money restoring their identity. However, complex cases can mean attorney’s fees and lost wages if you need to take off work, which could be covered by an identity theft policy.

4. How to protect yourself

You can take the following steps to protect yourself from identity theft:Be aware of your setting when you’re entering a credit card number or providing one over the phone. Make sure strangers can’t see or hear you.

Always tear up applications for “pre-approved” credit cards you get in the mail. Criminals may use them and try to activate the cards.

Never respond to unsolicited email that requests identifying data.

 For more information, click here.

Teaching Suggestions:

  • Ask students if they ever thought of purchasing identity theft insurance?  If so, did they purchase it or not?  What have been their experiences?
  • Ask students to make a list of steps to take to protect themselves from identity theft.

Discussion Questions:

  1. Why purchase identity theft insurance if it is already covered by your homeowners insurance policy?
  2. Under what circumstances is identity theft insurance necessary?  Is it worth it?  Explain.
Categories: Chapter 6, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

New IRS imposter scam targets college students and staff

If you’re a college student, faculty, or staff member, pay attention to this scam. IRS imposters are sending phishing emails to people with “.edu” email addresses, saying they have information about your “tax refund payment.” What do they really want? Your personal information.

Scammers are sending emails with subject lines like, “Tax Refund Payment” or “Recalculation of your tax refund payment.” The email asks you to click a link and submit a form to claim your “refund.”

What happens if you click the link? The website asks for personal information, including your name, Social Security number (SSN), date of birth, prior year’s annual gross income (AGI), driver’s license number, address, and electronic filing PIN. Scammers can use or sell this information for identity theft.

The emails can look really real and include the IRS logo. But no matter what the email looks like or says, one thing stays true: the IRS will not first contact you by email. They will always start by sending you a letter. And, to confirm that it’s really the IRS, you can call them directly at 800-829-1040.

If you clicked a link in one of these emails and shared personal information, file a report at IdentityTheft.gov to get a customized recovery plan based on what information you shared.

If you spotted this scam, the IRS is asking you to forward the email as an attachment to phishing@irs.gov and at ReportFraud.ftc.gov.

For more information, click here.

Teaching Suggestions:

  • Ask students if they, their relatives or friends have received such scam emails.  If so, how did they respond to the scam?
  • Why have imposter scams increased so rapidly in the last few years?  What, if anything, can consumers do to avoid such scams?

Discussion Questions:

  1. Why is it important not to click on the links, even if they seem to be legitimate?
  2. If you clicked on such a link, what steps should you take to protect yourself and others from being scammed?
Categories: Chapter 3, Chapter 6, Frauds and Scams | Tags: , | Leave a comment

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