Chapter 5

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

Family lending and borrowing

It is natural to turn to people close to you for help when you need it and to want to help others. However, sometimes unclear communication or misunderstandings can cause strain on your relationships and unnecessary financial hardship

Informal money arrangements among friends and family are very common.  Research has shown that as many as one in five U.S. adults receive financial support from friends or family, and up to one in three U.S. adults provides support to others. During times of crisis, these support networks can provide timely help.

Discussing financial arrangements among friends and family can help reduce strain. It may feel awkward to have a frank conversation, but remember the goal is to come up with an arrangement that works for everyone involved. This will help prevent more difficult conversations later. Below are a series of questions that can help you work together to solve problems and maintain strong relationships.

Asking someone if you can borrow or share their resources

Before you approach your friend or family member with your need or request, take a short time to think through all of the information you need to share and what the results could be of your request. You should be ready to provide clear answers about your situation. This can help you have a better conversation – and potentially a better outcome for your finances and your relationship. Ask yourself:

  • What exactly am I asking for?
  • Do I have other ways to meet those needs?
  • How would my relationship to this person change if they agree – or if they turn me down?
  • Do I have the ability to pay this person back?

Be realistic, and be honest with yourself, and the other person.

Has someone asked you for money or support?

Before you respond to a friend or relative who asks you to share or lend resources, pause to think it through first. Ask yourself the questions below, and then see if you need to clarify your understanding with the other person:

  • Am I being asked to give a gift that will not be paid back, or provide a loan that will be paid back?
  • How could this affect my own money situation, in the short and long term?
  • How would my relationship to this person change if I agree – or if I turn them down?
  • If it is a loan, what happens if they don’t pay it back?
  • If it is a loan, do I need it to be paid back with money, or are there other ways to be repaid – for example, can I accept other services like childcare, transportation, or something else in exchange?

Again, be realistic, and honest with yourself and the other person.

 If you can, write out what everyone has agreed to and give everyone a copy to refer to later. Whether you write it down or not, your agreement should answer the following questions:

  • Who is providing what (money, time, services, or something else) to whom?
  • How much, how often, and for how long?
  • Is this a one-time exchange, or happening on a regular basis?
  • How and when will the lender be repaid?
  • When will the arrangement be considered done?
  • When or how often will you check in with each other?
  • What happens if circumstances change?

For more information, click here.

Teaching Suggestions:

  • Under what circumstances should you borrow from family members or friends?
  • Ask students if they have borrowed or have lent money to family members or friends.  If so, let them share their experiences.

Discussion Questions:

  1. Do loans from family or friends complicate family relationships?  Explain.
  2. Why should all loans to or from a family members be in writing and state the interest rate, if any, repayment schedule, and the final payment date.
Categories: Budget, Chapter 5 | Tags: , | Leave a comment

Managing your credit report

The three nationwide consumer reporting agencies–Equifax, TransUnion, and Experian–will provide one free credit report every 12 months if you request it. As a result of a 2019 settlement, all U.S. consumers may also request up to six free copies of their Equifax credit report during any twelve-month period through December 31, 2026. These free copies will be provided to you in addition to any free reports to which you are entitled under federal law.

If you run into difficulty getting your free Equifax, TransUnion, or Experian annual credit report(s) from AnnualCreditReport.com or its toll-free phone number, try contacting the respective institution(s) directly for help:

  • Equifax, (866) 349-5191 (Option 3)
  • TransUnion, (800) 680-7289 (Option 1)
  • Experian, (888) 397-3742 (Option 2 followed by Option1)

Freeze your report

Each of these companies offers you the option to freeze your report with them if you request it. By law each must freeze and unfreeze your credit file for free if you request it. You also can get a free freeze for your children who are under 16. If you are someone’s guardian, conservator or have a valid power of attorney, you can get a free freeze for that person, too.

Free Credit Monitoring for Military

Equifax, TransUnion, and Experian provide free credit monitoring services to active duty service members and to National Guard members, by visiting the active military web pages of each company.

For more information, click here.

Teaching Suggestions

  • Ask students if they or their families have requested their credit report(s) recently.  If so, what was their experience?
  • Ask the students to make a list of circumstances that will lead them to freeze their credit reports.  When should they consider unfreezing reports?

Discussion Questions

  1. When might it be necessary to freeze or unfreeze credit reports for children who are under 16 years of age?
  2. Should federal government require nation’s credit reporting agencies to provide free credit reports to consumers?   Explain your answer.
Categories: Chapter 5, Credit Mistakes, Credit Scores, Identity Theft, Uncategorized | Tags: , , | Leave a comment

What is a Robocall?

If you answer the phone and hear a recorded message instead of a live person, it’s a robocall.  Americans have seen a significant increase in the number of illegal robocalls because internet-powered phone systems have made it cheap and easy for scammers to make illegal calls from anywhere in the world, and to hide from law enforcement by displaying fake caller ID information.

To date, the Federal Trade Commission (FTC ) has brought more than a hundred lawsuits against more than 600 companies and individuals responsible for billions of illegal robocalls and other Do Not Call violations.

The FTC also is leading several initiatives to develop technology-based solutions. Those initiatives include a series of robocall contests that challenge tech gurus to design tools that block robocalls and help investigators track down and stop robocallers. The FTC also is encouraging industry efforts to combat caller ID spoofing. Here’s the FTC’s game plan to combat robocalls:

  • continue aggressive law enforcement
  • build better tools for investigating robocalls 
  • coordinate with law enforcement, industry, and other stakeholders
  • stimulate and pursue technological solutions.

For More Information, click here.

Teaching Suggestions

  • Ask students how they or their families respond to robocalls.  Has the number of robocalls increased in recent months?  If so, what might be the reasons?
  • Ask students to make a list of actions to take in combating robocalls.  Share the list with other students.

Discussion Questions

  1. Should you consider reducing unwanted sales calls by submitting your phone numbers to the National Do Not Call Registry?
  2. Why doesn’t the National Do Not Call Registry stop robocalls?
  3. Are robocalls legal?  What kinds of robocalls are allowed without your permission?
  4. How can you manage to get fewer robocalls?
Categories: Chapter 5, Debt, Identity Theft | Tags: , , | Leave a comment

Gift Cards Scams

new data analysis by the Federal Trade Commission (FTC) shows that gift cards continue to be the most common form of payment when Americans report losing money to most scammers.

Since 2018, the data analysis shows American consumers have reported spending nearly $245 million on gift cards that they used to pay scammers for a wide variety of scams.   Scammers most likely to rely on gift cards as a payment method  were government imposters, family imposters, business imposters, and tech support scams.

In these scams, the scammers convince consumers that they must pay using gift cards. The reasons scammers present vary, but they always tell you that you must go to a retail outlet, purchase physical gift cards, and then provide the PIN numbers on the cards to the scammer. Reports suggest scammers favor certain brands of gift cards, such as, eBay or Amazon, however, their brand preferences change over time.

Because of the rapid increase in scams, the FTC has started a new campaign to partner with retailers around the country to help prevent consumers avoid a gift card payment scam.

The FTC has created warning signs that retailers can place directly at the point of sale for gift cards—both on the racks where they are displayed and at cash registers. The signs are designed to stop consumers who may be ready to buy gift cards to pay a scammer, raising key questions and reminding them that “gift cards are for gifts, not payments.

For more information, click here.

Teaching Suggestions

  • How many students have purchased gift cards and how did they use these cards? For personal use?  For gifts? For scammers?
  • What can you do to protect yourself and your family against gift card scams?
  • What will you do if someone calls you from tech support and asks you to pay them with a gift card to fix your computer?

Discussion Questions

  1. Why gift cards continue to be the most common form of payment for most scammers?
  2. Why do so many Americans get scammed by imposters?
  3. What can consumers do to avoid such scams?
  4. Discuss the statement, “Gift cards are for gifts, not payments”.
Categories: Chapter 5, Frauds and Scams | Tags: | Leave a comment

What to Do When Information Is Lost or Exposed

What to Do When Information Is Lost or Exposed

Did you recently get a notice informing you that your personal information was exposed in a data breach? Did you lose your wallet? Or learn that an online account was hacked? Depending on what information was lost, there are steps you can take to help protect yourself from identity theft

What information was lost or exposed?

  1. Social Security number
  • If a company responsible for exposing your information offers you free credit monitoring, take advantage of it.
  • Get your free credit reports from annualcreditreport.com. Check for any accounts or charges you don’t recognize.
  • Consider placing a free credit freeze. A credit freeze makes it harder for someone to open a new account in your name.
  • Try to file your taxes early — before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job.
  • Respond right away to letters from the IRS.  Don’t believe anyone who calls and says you’ll be arrested unless you pay for taxes or debt.
  • Continue to check your credit reports at annualcreditreport.com.  You can order a free report from each of the three credit reporting companies once a year.
  1. Online login or password
  • Log in to that account and change your password. If possible, also change your user name. If you can’t log in, contact the company. Ask them how you can recover or shut down the account.

3. Debit or credit card number

  • Contact your bank or credit card company to cancel your card and request a new one.
  • Review your transactions regularly. Make sure no one misused your card. If you find fraudulent charges, call the fraud department and get them removed.
  • If you have automatic payments set up, update them with your new card number.
  • Check your credit report at annualcreditreport.com.

4. Bank account information

  • Contact your bank to close the account and open a new one.
  • Review your transactions regularly to make sure no one misused your account. If you find fraudulent charges or withdrawals, call the fraud department and get them removed.
  • If you have automatic payments set up, update them with your new bank account information.
  1. Driver’s license information
  • Contact your nearest motor vehicles branch to report a lost or stolen driver’s license. The state might flag your license number in case someone else tries to use it, or they might suggest that you apply for a duplicate.
  • Check your credit report at annualcreditreport.com.

 

For More Information, click here.

Teaching Suggestions:

  • Ask how many students check their credit report at least once a year. What is the importance of checking your credit report regularly?
  • Ask if any student has placed a credit freeze. If so, what was their experience?

Discussion Questions:

  1. What is the difference between a credit freeze and a fraud alert?
  2. What must you do if someone uses your Social Security number to get a tax refund?
Categories: Chapter 4, Chapter 5, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Warning Signs of Identity Theft

What Do Thieves Do With Your Information?

 Once identity thieves have your personal information, they can drain your bank account, run up charges on your credit cards, open new utility accounts, or get medical treatment on your health insurance. An identity thief can file a tax refund in your name and get your refund. In some extreme cases, a thief might even give your name to the police during an arrest.

Here are clues that someone has stolen your information:

  • You see withdrawals from your bank account that you can’t explain.
  • You don’t get your bills or other mail.
  • Merchants refuse your checks.
  • Debt collectors call you about debts that aren’t yours.
  • You find unfamiliar accounts or charges on your credit report.
  • Medical providers bill you for services you didn’t use.
  • Your health plan rejects your legitimate medical claim because the records show you’ve reached your benefits limit.
  • A health plan won’t cover you because your medical records show a condition you don’t have.
  • The IRS notifies you that more than one tax return was filed in your name, or that you have income from an employer you don’t work for.
  • You get notice that your information was compromised by a data breach at a company where you do business or have an account.

For more information, click here.

Teaching Suggestions

  • Ask students if they, their family members or friends have been victims of an identity theft. What was their experience and how did they resolve the problem?
  • Ask students if they mail bills from their home mail box, especially if it is out by the street. What might be some dangers of this method of mailing bills?

Discussion Questions

  1. Should you put your Social Security and driver’s license numbers on your checks?   Why or why not?
  2. Why is it important to check your credit report each year? Should you consider credit monitoring, identity monitoring service, or identity theft insurance?  Why or why not?
Categories: Chapter 4, Chapter 5, Chapter 8, Credit Scores, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

Beware of scams related to the coronavirus

Scammers are taking advantage of the corona virus (COVID-19) pandemic to con people into giving up their money. Though the reason behind their fraud is new, their tactics are familiar. It can be even harder to prevent scams right now because people aren’t interacting with as many friends, neighbors, and senior service providers due to efforts to slow the spread of disease.

Those who are ill or don’t feel comfortable potentially exposing themselves may need someone to help with errands. Be cautious when accepting offers of help and use trusted delivery services for supplies and food. During this time of uncertainty, knowing about possible scams is a good first step toward preventing them.

  1. Scams offering COVID-19 vaccine, cure, air filters, testing

There is an increasing number of scams related to vaccines, test kits, cures or treatments, and air filter systems designed to remove COVID-19 from the air in your home. At the time of this writing, there is neither a vaccine nor a cure for this virus. If you receive a phone call, email, text message, or letter with claims to sell you any of these items–it’s a scam.

  1. Fake corona virus-related charity scams

A thief poses as a real charity or makes up the name of a charity that sounds real to get money from you. Be careful about any charity calling you asking for donations. If you are able to help financially, visit the website of the organization of your choice to make sure your money is going to the right place. And be wary if you get a call following up on a donation pledge that you don’t remember making–it could be a scam.

  1. “Person in need” scams

Scammers use the circumstances of the corona virus to pose as a grandchild, relative or friend who claims to be ill, stranded in another state or foreign country, or otherwise in trouble, and asks you to send money. The scammer may ask you to send cash by mail or buy gift cards. These scammers often beg you to keep it a secret and act fast before you ask questions. Don’t panic!  Don’t send money unless you’re sure it’s the real person who contacted you. Hang up and call your grandchild or friend’s phone number to see if the story checks out. You could also call a different friend or relative to check the caller’s story.

  1. Scams targeting your Social Security benefits

Local Social Security Administration (SSA) offices are closed to the public due to COVID-19 concerns, SSA will not suspend or decrease  Social Security benefit payments or Supplemental Security Income payments due to the current COVID-19 pandemic. Scammers may mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments during this period. Any communication that says SSA will suspend or decrease your benefits due to COVID-19 is a scam, whether you receive it by letter, text, email, or phone call. Report Social Security scams to the SSA Inspector General online at oig.ssa.gov .

For more information, click here.

Teaching Suggestions

  • Ask students if they, their friends, or relatives have been victims of coronavirus- related scams? If so, what was their experience?
  • Someone you don’t know contacts you asking for any personally identifiable information by phone, in person, by text message, or email. What will be your response?

Discussion Questions

  1. Someone you don’t know sends you a check, maybe prize-winnings or the sale of goods and asks you to send a portion of the money back. What will you do and why?
  2. Discuss the statement: “The federal. State, and local consumer protection agencies are doing everything possible to protect consumers from fraudsters”.
Categories: Chapter 4, Chapter 5, Chapter 8, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

Coping With the Corona Virus-Related Financial Stressors

KEY POINTS

  • Nearly half of U.S. adults have reported that their mental health has been negatively impacted due to worry and stress over the virus, according to a Kaiser Family Foundation poll.
  • A new NFCC survey finds situations that immensely exacerbate financial worries include not having enough savings, losing a job and the inability to pay debts.
  • Many large health insurance companies as well as Medicare have increased their capacity and coverage for telehealth visits with mental health providers.

Here are some tips from the mental health and financial experts on how best to cope with these common money stressors.

1. Not enough savings

If you find yourself struggling financially and have a limited emergency fund — or none at all — focus instead on what you can control. “First, carefully examine your expenses and reprioritize your spending. Cut out everything but the essentials , such as,  mortgage or rent, food, utilities and insurance,” said author and certified financial planner Carrie Schwab-Pomerantz, who is also president of the Charles Schwab Foundation. “If you’re unable to pay a bill, contact your creditors right away. They may be willing to negotiate a payment schedule or waive late fees.

2. Job loss

If you haven’t already, file for unemployment benefits immediately through your state’s programThere will likely be a lag time until you receive your first check.

  • Make sure you still have health insurance. You could switch to COBRA to receive the same coverage you had under your employer for the next 18 months, but you have to pay for it yourself at a considerably higher cost than you were paying as an employee. “Do some comparison-shopping.”
  • Consider other jobs that you may be able to pursue. Use your down time to learn a new skill or start that side-hustle. Education, health care, and technology companies are among some of the industries hiring remote workers right now.

3. Inability to pay your debts

Nearly half of U.S. adults currently have credit card debt and 13% of them are not paying anything at all or don’t have a plan on how to pay, according to a report by CreditCards.com. 

Consider temporarily paying only the minimum on mortgage/rent, car loans and student loans as well, said Schwab-Pomerantz, whose Schwab MoneyWise website has a list of resources to help during the Covid-19 crisis. More help could be available. You may be able to lower or suspend your mortgage payments for up to one year in some cases. Contact your lender.  If you’re having trouble paying your rent, talk to your landlord about your situation and your options. Some states and municipalities are providing eviction restrictions for impacted individuals. Many utilities and phone companies have stopped cutting off services for nonpayment. Call them.

For more information, click here.

Teaching Suggestions

  • Ask students how the corona virus has affected them, their relatives, or friends. What steps have they taken to minimize the effects of the corona virus?
  • List the steps to take if you don’t have enough emergency funds to get through this financial difficult period.

Discussion Questions

  1. How are millions of Americans coping with stress and anxiety as they deal with the fear and reality of death and disease due to the corona virus pandemic?
  2. Discuss the economic and emotional worries that are keeping American awake at night.
Categories: Budget, Chapter 2, Chapter 5, Debt | Tags: , , | Leave a comment

Managing your bills during COVID-19

COVID-19 has thrown the economy into a tailspin. Many people have been laid off, furloughed, or are working fewer hours. And as wages dry up, bills can pile up.

Debt can be tricky. Here are some ideas about how you can manage your debts and start regaining your financial well being.

  • Gather your bills: Make a list of your monthly bills: rent/mortgage, car payment, utilities, student loans, medical bills, and anything else. Consider how much you need for food, medicine, and other necessities.
  • Ask for help: Many companies have special programs to help people right now. Contact the companies you owe money to and try to work out a new payment plan with lower payments or delayed due dates. Make sure to get any changes in writing.
    • Find out if your state or local government offers programs that will allow you to hold off on paying some bills right now.
    • Trouble paying your mortgage? Here’s some advice on how to manage that problem. If you have a government-backed mortgage, you may be able to delay payment by contacting your servicer.
    • Need additional help? Check out ftc.gov/creditcounselor for tips on how to choose a counselor who really helps you out.
  • Prioritize if you need to: If you still can’t pay everything on time, look at what would happen if you couldn’t pay each bill and decide which bills to pay first. Would you lose your home? Would your car be repossessed? Would your debt go into collection and affect your credit report?
  • Study up: Check out the FTC’s advice on how to cope with debt in the short term, and how to get out of debt when you are able.
  • Watch out for scams: In stressful times, scammers are everywhere. Beware of any company that guarantees that creditors will forgive your debts, or makes you pay up front for help. If you are looking for debt relief, make sure to find help you can trust.

For more information, go to: click here.

Teaching Suggestions

  • Ask students to develop a plan to manage their debts, especially during the coronavirus pandemic.
  • Ask students if they should turn to a company that claims to offer assistance in solving debt problems? Why or why not?

Discussion Questions

  1. Why should you avoid waiting until your account is turned over to a debt collector?
  2. What is a constant worry for a debtor who is behind in payments of bills?
Categories: Chapter 5, Debt | Tags: | Leave a comment

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