Teach Kids Money Management with a Debit Card
Like many parents, you may have opened a savings account for your child when he or she was a baby. If you've been teaching them money management skills and they have shown financial responsibility, then, when they become teenagers, a debit card/checking account from SRP can be a great next step.
As kids hit middle-school age, they start spending more time with friends. That means you're not always around when they buy treats or movie tickets. Those early-teen years can be good opportunities for them to use a debit card and practice financial responsibility.
Though most teens, like most people, no longer write many checks, when the opportunity arises for your teen to write one, jump on it. For example, perhaps your teen pays part of the cell phone bill each month. Have your teen write a check to you for his or her part of the payment. It would be easier just to transfer money from your teen's account to yours but getting practice writing a check once in a while can be beneficial for them.
Explain to your teen the importance of keeping track of the balance in their account either by writing each transaction in a check register or by frequently checking their account online. Also remind your kid that online balances might not show the actual balance in the account if transactions haven't posted or if checks haven't been cashed.
The professionals at SRP are eager to help your teen take this next step financially. Stop by with your teen and we'll show them how to open an account of their own, as well as explain how to use a debit card and our online banking service.
Secure Your Mobile Wallet
There are many mobile applications that allow you to carry out most of your personal finance transactions online and on the go.
To keep your financial data safe, keep these security tips in mind:
-Enable a passcode/password on your phone. This will ensure that no one else can simply pick up your phone and access your personal information.
-Enable the auto-lock feature on your phone. This will lock your phone after a certain period of inactivity. Use auto-lock with a password to make sure no one else can access your phone.
-Make sure your security software is up-to-date. When your network carrier sends you alerts that a security or operating system update is available, download it as soon as possible.
-Watch for fake texts or other messages telling you to go to a site or call in. Spam messages can open the door to malware, which software hackers use to disrupt computer operation, gather sensitive information, or gain access to private computer systems.
-Only install applications from trusted sources. Use Google Play Store or Apple App Store and avoid installing apps from unknown sources.
-Avoid public Wi-Fi. The information you send over public Wi-Fi can potentially be seen by others using the network, including hackers. Instead, use your mobile carrier's network when accessing confidential information.
-Turn off Bluetooth and Wi-fi when not in use. Leaving them on when you are out in public leaves your phone vulnerable to hackers. Only connect to trusted networks.
Credit Card Do's and Don'ts for Seniors
What are your retirement dreams? If you?re approaching retirement, it would be wise to clear up any credit card debt now to ensure your retirement is as worry-free as possible.
To help stay clear of credit card debt:
-DO pay off your credit card debt before you retire and no longer earn a salary or wages.
-DO pay for rent or mortgage, food, utilities, transportation, and prescriptions first before paying credit card companies.
-DO understand your rights under the Fair Debt Collection Practices Act.
-DON'T take money out of a tax-deferred retirement account to pay off a big credit card bill. You may have to pay taxes on the withdrawal, which could turn a $15,000 debt into a $20,000 expense.
-DON'T buy big-ticket gifts for the kids and grandkids until you are debt-free.
-DON'T wait until your finances are out of control before you seek help. Desperation makes you vulnerable to predatory lending practices.
And, as always, talk to us at SRP Federal Credit Union for ideas about ways to make the most of your financial resources.
Identity Theft Victim Checklist
Identity theft is one of the top three consumer complaints to the Federal Trade Commission.
The FTC's annual look at its Consumer Sentinel Network database of complaints found that the agency received more than 3 million complaints overall in calendar year 2018, with 15% related to identity theft.
If you are a victim, take these steps immediately:
-Place a fraud alert on your credit reports, ask for a free copy of your credit report, and review those reports for evidence of accounts you didn't open. The three credit bureaus are Equifax, Experian, and TransUnion.
-Close accounts - including share drafts/checks or ATM cards - that have been tampered with or used fraudulently. Contact all financial institutions and lenders, credit card issuers, utility companies, and the Social Security Administration to notify them of the fraud. Follow up each conversation with a letter.
-File a report with law enforcement and insist on getting a copy of the report or the report number.
-File a complaint with the Federal Trade Commission.
-If you are a SRP member and have fallen victim to identity theft you can contact our Financial Crimes Department at (803) 278-4851.
Store Cards: Seldom the Better Deal
With offers of an additional 15% off your purchase or free merchandise, it's tempting to apply for credit cards from your favorite retail stores. Think twice, however, before signing up. If you don't pay the bill in full at the end of each month, you could end up paying much more than you originally would have saved.
That's because interest rates on retail cards average about ten percentage points higher than credit union credit cards. Store cards usually offer special incentives for cardholders to increase loyalty and encourage them to spend more. The average household has about 2.5 store-issued credit cards. If you plan to buy a car or house in the near future, it can hurt your chances to get a loan at a favorable rate if you have many recently opened lines of credit. It's usually better to have one major credit card that you can use for all items you wish to charge.
SRP FCU offers credit cards at great rates! Visit our website at www.srpfcu.org/creditcards to learn more about all the credit cards we offer or stop by one of our branches and speak to one of our service representatives today.
COVID Costs You Can Deduct from 2021 Taxes
In 2021, the IRS announced that taxpayers who itemize could deduct certain unreimbursed COVID-19 medical expenses from their taxes. Among those expenses, you can include at-home COVID-19 tests, as well as the cost of personal protective equipment (PPE), like masks, hand sanitizer, and sanitizing wipes.
Taxpayers can only claim this deduction if their total medical and dental expenses exceed 7.5% of their 2021 adjusted gross income. For example, if your household had an adjusted gross income of $70,000 last year, you had to have spent more than $5,250 on these expenses before you can claim this deduction. Also, if your insurance reimbursed you for any COVID-19 expenses, you cannot claim them.
If you are a teacher, you can claim up to $250 in eligible educator expenses. For your 2021 tax return, you can also claim the unreimbursed COVID-19 protective items you purchased for your classes. These expenses include:
-disinfectant for use against COVID-19
-tape, paint or chalk to guide social distancing
-physical barriers (for example, clear plexiglass)
The deadline for filing taxes was moved to Monday, April 18, 2022. The IRS says that due to a backlog of returns they have already received, if you submit your return on paper forms, it may take a while to get your refund. They suggest filing electronically to get your refund processed more quickly. You can also instruct them to send your payment via direct deposit. This will get the refund into your credit union account faster than waiting for a paper check to arrive in the mail. If you log into the IRS website, you can get updates on your refund's status by clicking on their "Where's My Refund?" page.
Once you receive your refund, be sure to save at least a portion of it in a savings account. As these last two plus years have shown us, having an emergency fund can truly save you in the event of a job loss or extensive medical expenses. If you don't have an emergency savings account yet and need some help getting it set up, just contact us at (803) 278-4851 and one of our member service representatives will be happy to help you.
When It Comes to Car Loans, Shorter is Often Better
When It Comes to Car Loans, Shorter Is Often Better
A longer-term loan can make even the most expensive car look affordable.
By stretching out the loan over many years, your monthly payment is likely lower, but you could end up paying a lot more in interest. Still, many people find such loans attractive.
The average new car loan was over 71 months at the end of 2020, according to Edmunds.com. Almost 32% of vehicle loans made in the first quarter of 2021 were for 73 to 84 months (6 to 7 years), according to Experian.
That's well above the standard three- to four-year loan that used to be typical for new car purchases. Here are some of the problems with taking out a longer car loan:
- The longer the term of the loan, the worse your interest is likely to be. Shorter-term loans generally qualify shoppers for a better interest rate.
For example, say you want to finance a $28,000 car at 8% sales tax, with a loan rate of 3.5% for 60 months, and a trade-in worth $5,000. You will end up paying $2,310 in interest over the life of the loan. Compare that with a 72-month loan. Your interest rate will jump, likely to about 6%, and you'll end up paying $4,878 in interest.
- There's a greater chance you'll end up underwater, meaning you will owe more to the lender than the car is worth. Cars depreciate as soon as they leave the lot, and for the first three years, most cars are worth less than what is owed on the loan. Without a substantial down payment, if you total the car or need to sell it within the first three years, you could end up receiving less than you owe on the loan.
- You're stuck with the car when it begins needing expensive maintenance. If you want to buy a newer vehicle, you likely won't be able to trade in your old car because the remaining balance on what you owe on the car is higher than what the dealer is willing to pay for it.
If you need a longer car loan just so you can buy the car, you probably can't afford the car in the first place. Try to keep the length of your car loan shorter to save money.
Before you go shopping for a vehicle, visit SRP Federal Credit Union to get preapproval on a loan. The loan officer will figure out exactly how much you can comfortably afford, at the best rate.
SRP Federal Credit Union can also help you If you already have an auto loan from another lender. We can help you refinance to a shorter term and more affordable payment.
Women Drive Household Finances
The purchasing power of women has been rising for decades and all signs say it will continue. The amount of assets controlled by women in the U.S. is expected to climb from $10 trillion (about 33%) to $30 trillion by 2029. According to Morgan Stanley, women control 83%% of all consumer purchases in the U.S., ranging from cars to health care to electronics. In 2020, women were the primary income earner in 41.2% of households with children. And because women are statistically more likely to outlive their male spouses, the money they earn will have to last them longer.
With that in mind, many financial experts are recommending to women that as their economic power grows, they take a lead role in managing their family's finances.
At SRP we offer the tools and resources to help you do that. With retirement planning, debt consolidation tools, and more. SRP can help you take ownership of your family's financial future. And, because we're a not-for-profit financial institution, we return our earnings to you in the form of better rates and fewer fees - making us just one of the many smart choices you've made for your family.
The Financial Facts of Life
The Financial Facts of Life
It's a buzz word you shouldn't ignore: financial literacy. Why? Because it's essential for financial survival in today's world.
It's never too late to begin learning the financial facts of life. If you're unsure how financially literate you are, ask yourself three questions:
1. Do I have a good handle on the financial facts of life? People with a good understanding not only shop wisely for everyday purchases, but they also make smarts decisions when shopping for a mortgage or other loan, they reconcile their accounts, regularly contribute to their retirement plan, and compare insurance policies to determine which fits their needs best. If you don't practice these good financial habits, you may be wasting money on expensive alternatives, paying for services you don't need or want, or making yourself vulnerable to identity theft or other forms of fraud.
2. How can I boost my financial IQ? The Federal Trade Commission has a consumer information website where you'll find an array of resources that answer questions about many common topics. It addresses topics like money and credit, mortgages, and online security. Your credit union is another solid resource for personal finance education.
3. What's my best line of defense? Educate yourself. Learn how to create a spending plan, use credit cards wisely, compare prices for everything you buy, and learn how to spot a good deal from a bad one.
Make smart decisions now and you'll have a solid financial foundation in the months and years ahead!
IRS Imposters Among the "Dirty Dozen" Tax Scams
Here's the bad news about any unexpected good news you receive in an e-mail from the Internal Revenue Service: It's probably bogus. For example, the IRS will not contact you via e-mail, out of the blue, about a refund you didn't know you had coming. But, yet, people fall for this scam again and again. Some have received e-mails--with convincing IRS logos--that display a refund amount and a link you must click on to get the refund.
The link leads to a mock-IRS Web page form that requires financial information, such as a Social Security and bank account number, user ID, password, mother's maiden name, and the like. Victims enter this information, press "submit," and Presto! Another identity thief now has the means to make a bank balance disappear.
The bogus IRS e-mail is an example of "phishing," which can lead to identity theft. It occurs when scammers use an authentic-looking e-mail to trick recipients into supplying personal financial data.
Don't take the bait - it's expensive
Although phishing accounts for only a fraction of the Internet fraud committed each year, its sting goes deep. We offer a few clues that an e-mail may be from an IRS imposter:
* Tortured English: Most phishing e-mails traced by the IRS originate outside the United States. Look for grammar and spelling mistakes or unusual words and sentence structures.
* No forewarning: The IRS does not make initial contact with taxpayers via e-mail.
Agents do correspond via e-mail, such as during some audit situations, but that doesn't happen unless you give provide them with your e-mail address first.
* Your gut reaction: If it sounds too good to be true - it probably is.
Phishers exploit charity donors
Phishers also may pose as charitable organizations. Finding a list of a charity's donors isn't difficult, and criminals use the organization's identity to go phishing.
For example, they send e-mails telling donors that the charity has calculated the tax-deductible amount of their donations. Donors are asked to supply Social Security numbers or other personal data to retrieve the documentation they'll need to claim the tax deductions.
Don't guess - ask the experts
The best thing to do if you're unsure whether an e-mail regarding taxes is legitimate is to check at irs.gov, call your local IRS office, or forward the email to email@example.com. Not only can you find the truth there - you may alert the IRS to a criminal who can be shut down before scamming another victim.