Author Archives: Melissa Hart

About Melissa Hart

A permanent lecturer at North Carolina State University. I teach Personal and Corporate Finance.

STUDENT MONEY SURVEY

Limited knowledge of personal finance and weak financial literacy skills are some of the concerns expressed by college students in a survey conducted by WalletHub. Findings in this study included:

  • Nearly all (93 percent) of the students surveyed expressed concern about the economy.
  • After graduation, the two major worries of students are not finding a job (36 percent) and educational loan debt (30 percent).
  • One-fifth of students expressed a belief that a college education is less important since the COVID-19 pandemic.
  • About half (52 percent) of the students responding voiced a concern that they were not learning enough about personal finance in school.
  • As a result of the pandemic, the three major financial lessons learned were: (1) having emergency savings (44 percent); (2) not going into debt (23 percent); and (3) having a steady job (22 percent).

Some suggestions to address these concerns include:

  • Financial anxiety can be reduced with simple personal finance actions: track your spending, cut back on unnecessary items, shop wisely, maintain a workable budget, pay off debts, and increase the amount in your emergency fund. Most importantly, emphasize the enjoyment of your connections and relationships with family and friends rather than on material items. 
  • Various career paths may not require a college degree; consider online courses, certification programs, trade schools, and other educational/training options.
  • Be creative in your savings efforts with: (1) saving $5 a day instead of $150 a month; (2) using “no buy” days to save money; (3) paying for your drinks (or snacks) at home by set­ting aside the “price” in savings; (4) visualizing a savings goal and budget categories with a photo or post-It notes as a reminder; (5) create, or locate onlinea poster that displays savings and debt categories to track your progress; (6) placing your credit card in a bag or container of water and place it in the freezer to avoid impulse purchases, then defrost it under warm water when you need to pay for an emergency.
  • When applying and interviewing, clearly communicate the connection between your skills and experiences with the current and future needs of the job position and company. This requires strong research of the company and industry trends but will allow a person to better connect with their prospective employer. Also, be ready to talk about research projects, team experiences, and creative problem-solving.
  • Although an increased number of personal finance classes are becoming available in schools, also seek out financial literacy education through community-based workshops, church outreach programs, and neighborhood organizations.

This research was the result of a nationally representative online survey of over 250 respondents. Responses were normalized so the sample would reflect U.S. demographics.

For additional information on the student money survey, click here.

Teaching Suggestions

  • Have students talk to others to determine if their opinions are similar to those presented in this article.
  • Have students create a role-playing drama that communicates actions to avoid various personal financial difficulties and career planning mistakes.

Discussion Questions 

  1. Which of the survey results are similar to your current attitudes and experiences?
  2. What additional money and career topics not covered in this survey do you believe are of current concern for students and others?

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

SECOND CHANCE BANKING

Several groups in our society are unable to open a checking account and access other banking services because of past life circumstances.  To help address this situation, financial service providers are offering second chance banking. This program is designed to provide financial opportunities to unbanked individuals and formerly incarcerated people.

Second chance banking involves a special checking account that doesn’t require a background check of a person’s past banking history. This account has limited features to minimize potential fees and no minimum balance. For those who lack a US ID or Social Security number, a foreign ID or passport is accepted to access this service.

A major goal of second chance accounts is to build banking credibility.  Once reliability is demonstrated over time, a person is then able to open a regular checking account. These accounts have a positive impact in low-income communities, where customers traditionally pay higher bank fees resulting in their account often being closed by the financial institution due to overdrafts.

In addition to making banking available to unbanked and underbanked consumers,

second chance banking also serves as an important step in financial freedom for formerly incarcerated people. A high percentage of these individuals were unbanked prior to their confinement, lack proper identification, or denied banking services due to their criminal history. Some who previously had an account may have had it closed due to inactivity or extensive fees.

The program also involves financial education to help a person build credit, save money, and achieve financial independence. A wide variety of banks, credit unions, community development financial institutions, minority depository institutions, and community-based non-profits are involved in second chance banking.

For additional information on second chance banking, click here.

Teaching Suggestions

  • Have students talk to others to learn about difficulties they may have encountered with banking services.
  • Have students create a visual summary (poster or slide presentation) to communicate how banking services are related to successful money management and financial planning.

Discussion Questions 

  1. What are benefits of second chance banking for individuals, their community, and society?
  2. Describe actions you would recommend to a person in need of obtaining a bank account. 
Categories: Chapter 4, Financial Services | Tags: , | Leave a comment

OVERCOMING INFLATION

With inflation, you will not be able to avoid higher prices. However, there is one action you can take that will not be affected by inflation. As advocated by legendary investor Warren Buffet, one of the strongest protections against inflation is investing in yourself. Obtaining additional career skills and improving existing ones will keep you in demand.

These added skills, unlike a lower value of the dollar, are inflation-proof. Various career abilities will be in demand no matter what the dollar is worth. These competencies can’t be taken away from you, and this investment in yourself is not taxed.

As a business owner or investor, the advice is similar. Offer a top-level product or service that will be in demand even in times of inflation. As noted by Buffet: when inflation is high the best thing you can do is be exceptionally good at something.

For additional information on an inflation strategy, click here.

Teaching Suggestions

  • Have students talk to others to learn about the actions they have taken in their lives to enhance and expand their career skills.
  • Have students research online sources available for free and low-cost classes and certification programs to enhance a person’s career skills.

Discussion Questions 

  1. What actions are you taking to enhance or expand your career skills?
  2. What are examples of exceptional products or services that might be in demand even in times of inflation?
Categories: Career, Chapter 1, Chapter 2, Financial Planning, _Appendix A, _Appendix B | Tags: , , | Leave a comment

MORE HAPPINESS FROM YOUR FINANCES

At some point, most people realize that “money can’t buy happiness.”  However, through wise use of your financial resources, reduced stress and increased joy are possible.

To enhance your personal enjoyment and satisfaction of life, consider these questions and actions:

  • What spending from the past year do you remember with a smile? Which did you regret? Use those memories to guide current spending.
  • When during your life were you happiest? Think about what made you happy, and if money was needed for those times.
  • What household chores do you dislike? Paying others to mow the lawn, clean house, or make dinner can increase happiness.
  • Should you consider spending more time with family and friends?  Most activities and experiences provide greater joy when you do them with others.
  • Do you live near or associate with people who make you feel poor?  Avoid comparing your spending and possession to others. Trying to spend to keep up with others will likely reduce your happiness.
  • Are you grateful for things that don’t cost money?  Emphasize an attitude of gratitude for your family, friends, community activities, and other relationships. Instead of thinking about what you don’t have, stress the opportunities available for your enjoyment of life.

For additional information on happiness and money, click here.

Teaching Suggestions

  • Have students talk to others using the questions above to learn more about the connection between money and happiness.
  • Have students create an audio or video drama to communicate the positive and negative aspects of money trying to buy happiness.

Discussion Questions 

  1. How do enjoyment, satisfaction, and purpose in your life connect to your spending habits?
  2. Describe actions a person might take to better understand the connection between money and happiness.
Categories: Budget, Chapter 1 | Leave a comment

Is a credit freeze or fraud alert right for you?

Credit freezes and fraud alerts can help reduce your risk of identity theft. Both are free and make it harder for identity thieves to open new accounts in your name. One may be right for you.

Credit freezes

A credit freeze is the best way you can protect against an identity thief opening new accounts in your name. When in place, it prevents potential creditors from accessing your credit report. Because creditors usually won’t give you credit if they can’t check your credit report, placing a freeze helps you block identity thieves who might be trying to open accounts in your name.

A freeze also can be helpful if you’ve experienced identity theft or had your information exposed in a data breach. And don’t let the “freeze” part worry you. A credit freeze won’t affect your credit score or your ability to use your existing credit cards, apply for a job, rent an apartment, or buy insurance. If you need to apply for new credit, you can lift the freeze temporarily to let the creditor check your credit. Placing and lifting the freeze is free, but you must contact the national credit bureaus to lift it and put it back in place.

Place a credit freeze by contacting each of the three national credit bureaus, Equifax, Experian, and TransUnion. A freeze lasts until you remove it.

Fraud alerts

A fraud alert doesn’t limit access to your credit report, but tells businesses to check with you before opening a new account in your name. Usually, that means calling you first to make sure the person trying to open a new account is really you.

Place a fraud alert by contacting any one of the three national credit bureaus. That one must notify the other two. A fraud alert lasts one year and you can renew it for free. If you’ve experienced identity theft, you can get an extended fraud alert that lasts for seven years.

Learn more about credit freezes, fraud alerts, and active duty alerts for service members. And, if identity theft happens to you, visit IdentityTheft.gov to report it and get a personal recovery plan.

For More Information, click here.

Teaching Suggestions

  • Ask students if they, their friends or relatives have placed a credit freeze or a fraud alert.  If so, what has been their experience?
  • Ask students to make a list of downsides to a credit freeze and to fraud alerts.

Discussion Questions

  1. What is the difference between a credit freeze and a fraud alert?
  2. Under what circumstance a credit freeze can be helpful?
Categories: Chapter 5, Credit Scores | Tags: | Leave a comment

COVID-19 testing scams

Scammers are preying on people looking for COVID tests. Some fraudsters are offering unauthorized test kits. Others are setting up phony testing sites to steal your personal information. The sites may look real with tents and hazmat suits – but then you don’t get the test results, you’re charged for a “free” test, or they use your information for identity theft.

 To avoid COVID testing scams, remember:

  • Do not give your Social Security number or passport number in order to get a COVID test.
  • Find legitimate testing sites. Check with your state  or local  health department or your doctor.
  • Look for FDA-authorized test kits. Check the FDA’s list of authorized antigen tests  and PCR tests  before buying. Now, you can get four free COVID test kits per household at COVIDtests.gov .
  • When shopping online for test kits, pay by credit card. If you’re charged for an order you never received, or for a product that’s not as advertised, you can contact your credit card company and dispute the charge .

COVID-19 vaccine scams

As the COVID-19 vaccine is rolled out throughout the country, it’s important to be on the lookout for scams. Beware of scams offering early access to vaccines for a fee. Don’t share your personal or financial information if someone calls, texts, or emails you promising to get you the vaccine for a fee. Also, keep in mind that Medicare covers the cost of the COVID-19 vaccine. COVID-19 vaccines are also free to others throughout the country, although providers may charge an administration fee.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends or family members have been victimized by COVID-19 Vaccine scams.  If so, what were their experiences?
  • Ask students to research legitimate COVID-19 testing sites in their area.

Discussion Questions

  1. When shopping online for test kits, why is it prudent to pay by credit card?
  2. What steps can you take to make sure that you are not being tested at a phony testing site?
Categories: Chapter 9, Frauds and Scams | Tags: | Leave a comment

Digital Investments in Retirement?

Your retirement savings represent years of hard work and sacrifice. The assets held in retirement plans, such as 401(k) plans, are essential to financial security in old age – covering living expenses, medical bills and so much more – and must be carefully protected.  That’s why plan fiduciaries, including plan sponsors and investment managers, have a strong legal obligation under the Employee Retirement Income Security Act to protect retirement savings.  These fiduciaries must act solely in the financial interests of plan participants and adhere to a high standard of care when managing plan participants’ retirement holdings.

In recent months, some financial services firms have started marketing investments in cryptocurrencies as potential investment options for participants in 401(k)s.  At this early stage in the history of cryptocurrencies, however, the U.S. Department of Labor has serious concerns about plans’ decisions to expose participants to direct investments in cryptocurrencies or related products, such as NFTs, coins, and crypto assets.

President Biden’s recent executive order on ensuring responsible development of digital assets highlights the significant financial risks digital assets can pose to consumers, investors and businesses in the absence of appropriate protections. 

Cryptocurrencies can present serious risks to retirement savings, including: 

  • Valuation concerns.
  • Obstacles to making informed decisions.  
  • Prices can change quickly and dramatically. 
  •  Evolving regulatory landscape.

Based on these concerns, the United States Department of Labor has issued a compliance assistance release for plan fiduciaries focused on 401(k) plan investments in cryptocurrencies.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends or relatives have 401(k) plans.  If so, has anyone invested in Cryptocurriencies in their retirement plans and what have been their experiences?
  • Ask students to prepare a list of potential dangers in investing in cryptocurrencies or other digital investments.

Discussion Questions

  1. Why is the U.S. Department of Labor concerned about people investing in digital assets for their retirement plans at this time?
  2. Should the federal government prohibit 401(k) plan providers from investing in cryptocurrencies in participant’s retirement plans?  Why or why not?
Categories: Chapter_14, Retirement Planning | Tags: | Leave a comment

Conned on Social Media? It’s not just you

In 2021, more than 95,000 Americans told the Federal Trade Commission that they’d been scammed with a con that started on social media. In fact, more than one in four people who reported to the FTC that they lost money to any scam said the transaction started with a post, an ad, or a message on a social media platform. And the losses amounted to about $770 million.

Americans reported losing the most money to investment scams (particularly those involving bogus cryptocurrency investments) and romance scams. More than a third of the Americans who lost money to romance scams said it started on Facebook or Instagram.

The largest number of reports came from people who lost money trying to buy something they saw marketed on social media. Most said they didn’t get what they paid for, while some reported ads that impersonated a real online retailer. Reports of social media fraud increased for all age groups in 2021, but people 18 to 39 were more than twice as likely to report losing money than older adults.

Scammers trying to get your money are always looking for new ways to reach people. And they’ll use whatever they know about you to target their pitch. Here are a few actions you can take to protect yourself, no matter which social media platform you use:

  • Try to limit who can see your posts and information on social media. Of course, all platforms collect information about you from your activities on social media, but visit your privacy settings to set some restrictions.
  • Check if you can opt out of targeted advertising. Some platforms let you do that.
  • If you see urgent messages from a “friend” asking for money, stop. It could be a hacker behind that post pretending to be your friend.
  • Don’t deal with a vendor that requires payment by cryptocurrency, gift card, or wire transfer. That’s sure to be a scam.

If you see or experience scam on social media, report it to ReportFraud.ftc.gov.

For More Information, click here.

Teaching Suggestions

  • Ask students if they, their friends or relatives have been scammed on social media.  If so, what have been their experiences?
  • Ask students to make a list of actions they might take to protect themselves from social media scams.

Discussion Questions

  1. Why do many people fall victims to scammers?  What can they do to protect themselves?
  2. What can the federal, state, and local governments do to protect consumers from scams?
Categories: Chapter 6, Frauds and Scams | Tags: | Leave a comment

Your Baby’s Social Security number

If your child is born in a hospital, the most convenient way to apply for a Social Security number is at that hospital before you leave.

When you give information for your child’s birth certificate at the hospital, you’ll be asked whether you want to apply for a Social Security number for your child. If you answer “yes,” you will be asked to provide both parents’ Social Security numbers. Even if you don’t know both parents’ Social Security numbers, you can still apply for a number for your child.

There are many reasons why your child should have a Social Security number. You need a Social Security number to claim your child as a dependent on your income tax return. You may also need a number for your child if you plan to do the following for your child:

  • Open a bank account.
  • Buy savings bonds.
  • Get medical coverage.
  • Apply for government services.

You can find more information by reading the publication, Social Security Numbers for Children. Share this information with people who are having a baby. Applying for a Social Security number at the hospital will save them time and let them focus on their new bundle of joy.

For more information, go to:

Teaching Suggestions

  • Ask students to make a list of reasons why their child should have a Social Security number?
  • What might be the consequences of not getting a Social Security card for your new born?

Discussion Questions

  1. Why should you get a Social Security card for your child?  Is it mandatory?
  2. What is the best and easiest way to apply for a Social Security card for a newborn?
  3. Why must all the documents be either originals or copies certified by the issuing agency?
Categories: Chapter_14 | Tags: | Leave a comment

Lost Your Social Security Card?

Consider whether you really need to get a replacement card. Knowing your number is what’s important, after all. You’ll rarely need the card itself — perhaps only when you get a new job and have to show it to your employer. If you really must replace your card, go to www.socialsecurity.gov/ssnumber before visiting your local Social Security office.

The first step is to learn what documents you need. The Social Security Administration requires a U.S. driver’s license, a state issued non-driver identification card, or a U.S. passport to prove your identity. Sometimes you may also need to prove your current U.S. citizenship or lawful noncitizen status with a birth certificate or passport.

All documents must be either originals or copies certified by the issuing agency. The Social Security office won’t accept photocopies or notarized copies of documents. They also can’t accept a receipt showing you applied for the document.

Once you’re clear on what documents you’ll need, the second step is to print and fill out the Application for a Social Security Card.  Finally, the third step is to bring or mail your application and original documents to a Social Security office. Then, the online process will take you to a screen where you can find the address of your local office.

In some areas, you can request a replacement Social Security card using your online my Social Security account if you meet certain requirements. Simply access your account and follow the instructions to replace your Social Security card. It’s safe, convenient and secure.

You can replace your Social Security card for free if it’s lost or stolen. Avoid service providers who charge you a fee to get your replacement card. You’re limited to three replacement cards in a year, and 10 during your lifetime. Legal name changes and other exceptions don’t count toward these limits. Changes in immigration status that require card updates may not count toward these limits. Also, you aren’t affected by these limits if you can prove you need the card to prevent a significant hardship.

The Social Security office will mail your card as soon as all of your information has been verified. Your replacement card will have the same name and number as your previous card.

For more information, go to:

Teaching Suggestions

  • Ask students if anyone has lost his/her Social Security card.  If so, did they replace it?  Why or why not?
  • Under what circumstances should you replace your lost Social Security card?  Explain.

Discussion Questions

  1. What steps must be taken to replace a Social Security card?
  2. Why must all documents be original to be submitted to Social Security?
Categories: Chapter_14, Retirement Planning, Uncategorized | Tags: , | Leave a comment

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