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Your Guide to Secure Mobile Banking

mobile banking

In response to the rise of mobile banking scams, the Consumer Financial Protection Bureau (CFPB) recently published new guidance on unauthorized electronic funds transfers, or EFTs. With more people using electronic banking as a holdover from pandemic times, it’s important for consumers to be aware of its vulnerabilities and how to protect themselves from scams. Here’s what you need to know about the risks of mobile banking and how to stay safe.

What are the risks of mobile banking? 

Banking through your mobile device is quick, convenient and efficient. There’s no longer a need to stop by the credit union on your way home from work to deposit checks, make a transfer or review your recent account history. Most banks and credit unions now allow you to do all that and more at any time, and from anywhere, using your phone and a mobile banking app.

Unfortunately, though, like all transactions that take place over the internet, mobile banking has some inherent risks. First, hackers can break into a phone and an account to steal money and information. Also, phishing scams that target people over the phone can trick them into sharing login information with scammers who may then hack into the account. Finally, bogus emails and messages appearing to be from your credit union can lead you to unknowingly install malware on your device.

Mobile banking scams can be difficult to spot and are frighteningly prevalent. In fact, according to a report by data science company Feedzai, the first quarter of 2021 saw a 159% increase in banking scams over the last quarter of 2020. This is likely due to the fact that the volume of banking transactions are returning to their pre-pandemic norm and many of them are happening online.

How to bank safely online

Instances of online fraud may be mounting, but that doesn’t mean you need to give up the convenience of mobile banking. Follow these protocols for online safety and bank with high confidence:

  • Use a VPN to hide your IP address. A VPN (virtual private network) will give you a private network, even when you’re using public Wi-Fi, thus preventing scammers from tracking and hacking your mobile device. It’s important to note that some VPNs can work so well that your own credit union won’t recognize you, so be sure to choose one that provides each user with a designated proxy IP. This enables select accounts to recognize the user while providing protection from hackers. 
  • Always choose multi-factor authentication. Most money apps will require this, but if your chosen app allows you to make this choice, be sure to say yes to multi-factor authentication. 
  • Never share your password or save it to your device. All of your passwords should be confidential, but the password you choose for an online banking app must be top secret. Don’t share your password with anyone. Follow suggested guidelines for choosing a strong password, including alternating between uppercase letters, lowercase letters, numbers and symbols; and choosing a unique password you don’t use elsewhere. Also, choose a security question that cannot be answered by searching through the personal information you post on your social media platforms. 
  • Brush up on your knowledge of scams. It’s important to keep yourself updated on the latest banking scams and to know how to recognize a scam if you’re targeted. Never answer a text or email that asks for your account details, even if it appears to be from your credit union.
  • Protect your phone. With the wealth of sensitive information it holds, a smartphone should be protected just like a desktop and laptop computer. Consider installing an antivirus app on your phone as well as a location-tracking app so you can find your phone if it gets lost. Be sure to lock your phone after using it, log out of the mobile banking app when you are done and always keep your phone in a safe place.

Mobile banking scams are on the rise, but by simply following the tips shared above, you can use your phone to bank with confidence, knowing your money and your information are safe.

What to Buy and What to Skip in August

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Q: I’d love to pick up some great bargains as the summer winds down, but I’m not sure what I should be buying this season. Which products typically go on sale in August and which should be pushed off for another time?

A: As host to the second-biggest shopping season of the year, the tail end of summer brings some fantastic finds, but some overpriced products as well. Here’s what to buy and what to skip in August.

Buy: Outdoor toys 

Outdoor toys, like sandboxes, bikes, inflatable pools and more, typically get big discounts in August. Check out sites like Overstock, Wayfair and look for markdowns on playground sets at retailers like Lowe’s and Home Depot.

Skip: Major household appliances and mattresses

If you’re in the market for a new oven, mattress or another major household purchase, you’re best off waiting until September. Retailers tend to slash the prices on these items by 30% or more during Labor Day weekend sale events. Plan ahead by checking out upcoming sales in the weeks leading up to Labor Day. Doing so will help you land the best prices on your purchases.

Buy: Swimwear

Stores and online retailers need to clear out their summer stock to make room for the autumn and winter line, which gives you the perfect opportunity to snag a super swimsuit deal! You can walk away with great finds at ridiculously low prices you won’t find next spring. Stash your treasures for next year’s beach season, or keep them for a winter getaway to warmer climates with sunny shorelines.

Skip: iPhones

If you’re looking to update your iPhone, you’re best off waiting it out a month or two. The new iPhone 13 is expected to be released in mid-September. Older models typically see a price cut when new models hit the market. So, whether you want to score the best price on an older phone or you’re willing to pay anything for the latest and greatest in iPhones, put the brakes on that purchase until September.

Buy: School supplies and kids’ clothing

With back-to-school shopping seemingly starting almost as soon as school is out for the summer, August is already late in the season. It’s also when school supplies and kids’ clothing tend to see generous markdowns. Stock up on supplies to last all year long and get your kids outfitted for the coming season at rock-bottom prices in August.

Skip: TVs

Don’t run out and buy a new TV just yet. If you need a new flat screen, you’re best off waiting for Black Friday to get the best deal.

Buy: Office supplies and furniture

Back-to-school sales means you can also cash in on office supplies and furniture. If you’re one of the many Americans working from home, you may need to restock your home office with basic supplies or to upgrade your office chair or desk. Why not save on these purchases by paying for them in August?

Skip: Fall clothing

Fall apparel will just be hitting the stores in August, so you likely won’t be seeing any steep discounts on fall wear until October at the earliest. It’s best to buy just a few autumn basics during the Labor Day sales and fill out the rest of your wardrobe later on in the season.

Buy: Patio furniture 

Those wicker table-and-umbrella sets can get pricey! Pick up a sweet deal on patio furniture by buying your sets and single pieces at the end of the season. While you’re giving your patio a facelift, you’ll also find grills, outdoor décor and more on sale in August.

The final dog days of summer bring a flurry of marked-down products and end-of-season sales, but there are some items that are best purchased during another time of year. Stay ahead of the retail game by using this guide to learn what to buy and what to skip in August.

Scam Alert: Beware Child Tax Credit Scams

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The Child Tax Credit, a part of the American Rescue Plan Act of 2021 that takes effect in July, is already drawing the attention of scammers. The newly expanded Child Tax Credit (CTC) will provide monthly payments of up to $300 per child for approximately 40 million households across the country. Payments will be issued via direct deposit, paper check, or debit cards, providing a plethora of opportunities for scammers to get in on the action.

Here’s what you need to know about Child Tax Credit scams and how to avoid them.

How the scams play out

There are several variations of the Child Tax Credit scam, each ultimately designed to trick parents and guardians out of their rightful CTC funds.

In one variation of the scam, victims receive phone calls, emails or social media messages appearing to be from the IRS and asking them to authenticate their personal details or share sensitive information in order to receive their CTC funds. In lieu of pretending to represent the IRS, the scammer may also claim to be in the position of “helping” the victim receive their funds. Unfortunately, in either scenario, if the victim follows the instructions of the contact, they will be playing right into the hands of a scammer.

In another variation of the scam, victims land on a spoofed government website where they are prompted to input their personal information. This scam is especially common, as the IRS has announced that it will be launching two web-based portals for families who’d like to update their information for the CTC: one for taxpayers who file annual returns and would like to share their banking details or a change in the number of dependents they have in their household, and one for taxpayers whose income level falls below the threshold for filing returns. While the two separate sites will make the application process smoother for the IRS, they also open the door for more bogus sites to spring up and snag unsuspecting victims in their trap.

What you need to know about the Child Tax Credit

As always, knowledge is your best protection against potential scams. Here’s what you need to know about the CTC and the way the IRS operates:

  • The IRS does not make unsolicited calls or emails. All official communications from the IRS are sent via standard USPS mail. The IRS will never call, email, text, or DM you asking you to share sensitive information.
  • You do not need to take any action or share personal information to receive the Child Tax Credit. If you’ve filed taxes in 2020, or even in 2019, and you’re eligible to receive the CTC funds, they will arrive via paper check, debit card or direct deposit without any action on your part. You only need to update information on one of the upcoming IRS portals if you’ve had a change in income, the number of dependents in your household or you’d like to share your banking information with the IRS.
  • Only the IRS will be issuing the Child Tax Credits. Anyone else claiming to “help” you receive the payments is a scammer.

If you’ve been targeted

As the date of the first advanced CTC approaches, scams are exploding everywhere. If you believe you’ve been targeted by a CTC scam, follow the cardinal rule of personal safety by never sharing sensitive data with an unverified source. Triple-check the URL on any IRS webpage you visit, as these are easily spoofed. Note that all authentic government sites will end in .gov. Finally, report all suspicious activity to the IRS and the FTC immediately.

For additional information on the upcoming Child Tax Credits, to check if you qualify or to update your dependent or banking information, visit the IRS’s CTC webpage directly at IRS.gov.

The advanced Child Tax Credits will help millions of families struggling with the economic fallout of the pandemic, but scammers can ruin it all. Follow the tips outlined above and stay safe!

Six Reasons to Switch to eStatements

Woman on computer

Are you constantly dealing with a barrage of junk mail that clogs up your mailbox? Drowning in papers needing sifted through? Are you always afraid to throw out any paper from your financial institution, fearful that you’ll be throwing sensitive material into the trash and making it an easy steal for would-be scammers?

If this sounds familiar, you may benefit from switching to electronic account statements.

Electronic statements (eStatements) are similar to paper statements, except for the fact that they’re delivered electronically. At the end of each statement period, which is generally monthly for checking accounts and quarterly for basic savings accounts, you’ll receive a notification from the credit union informing you that your statement is ready to view through the online banking portal, app, or by downloading from a secure site. Once you access the eStatement, you’ll find it has all the information you’re used to receiving in your paper statements. You can also access your eStatement by logging into your online banking site or app at any time throughout the month.

Quick, convenient and clutter-free, eStatements are the way of the future. Here are six reasons to consider switching to eStatements.

 1. Check your accounts at a glance

With eStatements, there’s no need to wait for your monthly statement to arrive in the mail. Just a few clicks and you get your account statement at any time, from anywhere, using the mobile device of your choice. Some financial institutions also offer members the option of signing up for financial alerts, such as a warning when your account is running low and in danger of being overdrawn. With eStatements, managing your accounts is easy.

2. Clear out the clutter

Why bother with piles of paperwork when you can access your accounts online? It’s neater, cleaner, and helps cut down on the correspondence you have flooding your mailbox. You’ll also save time sorting through papers when you can find your last account cycle balance with just a few quick swipes.

3. Keep your information safer

No matter how careful you are with papers containing sensitive data, there’s always a chance you can miss something and it’ll end up in the wrong hands. It can also be a pain to keep track of every incoming piece of snail mail and to dispose of it properly. With eStatements, you’ll never have to worry about losing a paper that contains confidential banking information, or mistakenly tossing it into the trash where it can be easily accessed by identity thieves.

Some people are wary about sending sensitive information online and are fearful that an eStatement can easily be hacked. However, you can access your account balance online with confidence, knowing that uses several layers of protection to keep your information absolutely safe.

4. Monitor your accounts frequently for fraud

When you have instant access to your accounts throughout the month, it’s a lot easier to check for signs of fraud. Plus, when you spot the fraud sooner, you can take steps to mitigate the damage earlier and have a better chance of a full recovery.

5. Eco-friendly

When you choose to receive your monthly account statements electronically, you’ll be doing the environment a favor. Less paper statements means less paper waste and fewer trees getting felled for something that will ultimately be tossed. Go green for the environment with eStatements!

6. Safe and secure storage

Filing cabinets are so last century. With eStatements, you’ll never stress about misplacing your account statements again. Your online banking portal or app acts as a convenient and secure filing cabinet, storing your account statements for you to access as needed.

Ready to make the switch to eStatements? Signing up is easy! Just register here to get started. Hello, convenience!

The Promises and the Perils of Buy Now Pay Later

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Buy now, pay later (BNPL) programs almost seem too good to be true. You can actually walk away with that overpriced exercise bike, entertainment system, sectional sofa or anything else that caught your eye without having the money to pay for it now. And there are almost no eligibility requirements to qualify.

However, upon closer inspection, BNPL isn’t really as great as it may appear. Let’s take a look at these programs, how they work and what to be aware of before you sign up.

How BNPL works

Gotta have it but don’t have the cash right now? You’re not alone. It’s the reason you’ll find a buy now, pay later button when checking out at most online retailers. Usually, the option will link you to a BNPL app, such as AfterpayAffirm or Quadpay. Similarly, a brick-and-mortar store may offer you this option at checkout as well. Here, too, you’ll pay up through an affiliated app.

If you choose to go with a BNPL option, you’ll first need to get approved. Eligibility is easy; apps will usually run just a soft credit check to confirm your information. Once approved, you can choose to link your debit card, checking account or credit card so the app can collect the payments when they’re due. Next, you’ll generally make a 25% deposit on the purchase, and the item is yours! Most BNPL plans require you to pay off the rest in three fixed installments, but payment schedules can vary.

On the surface, BNPL is a win-win: By spreading out the cost of an expensive item, the consumer can purchase what they can’t afford at the moment, while retailers can make more sales by getting these expensive items into the hands of more consumers, often regardless of income levels.

It’s important to note, though, that BNPL programs don’t work like credit cards. There are no interest charges for paying via BNPL, no fees for using the service and no credit checks to qualify.

When to choose BNPL

The primary advantage of paying for a purchase through a BNPL service is also its most obvious: You can purchase an expensive item even if you don’t have the cash on-hand at the time. This can be convenient when the item is on sale now, but will be full-priced by the time you’ve saved up for the purchase.

BNPL programs can also be a good choice to use for items you urgently need, but can’t afford right now. For example, you may be in need of medical equipment that is not covered by your insurance.

Finally, spreading out the cost of a purchase can be ideal for workers with an uneven income flow, such as independent contractors and freelancers, who may have lean times of year, but know that better times are coming.

Why BNPL can be a bad idea 

Before you click on the BNPL option when making your next purchase, it’s important to be aware of the many pitfalls:

  • It encourages overspending. Perhaps the biggest danger of embracing the BNPL life is that it makes it too easy to overspend. After all, if you’ll only be paying a small part of the purchase price today, why not buy it now?
  • Missed payments are penalized. If you miss a BNPL payment, the honeymoon is over. Some services will slap an interest charge on your outstanding balance, with rates as high as 40%. Other programs will charge a one-time late fee, which can be as high as $39. Still, others will tack on an extra fixed fee to all subsequent payments.
  • It can kill responsible financial habits. For many people, falling into the trap of BNPL, can mean the beginning of the end of their financial responsibility. For one, if a consumer has purchased multiple items through BNPL programs, the monthly payments will not be so minimal. The payments will need to be factored into a budget and can eat into other categories, like savings. In contrast, when a consumer saves up for a purchase, the money generally comes out of their monthly budget for short-term savings and does not affect other categories.

Buy now, pay later programs can be super-convenient, but they also present risks for the uninformed or distracted buyer. Use with caution!

 

Beware the USPS Smishing Text Scam

man checking text message

Your phone pings with an incoming text. You swipe it open to find a message from the USPS. They’re texting to let you know that the scheduled delivery time for your package has been changed. Unfortunately, though, the message is not from the USPS and you’ve just been targeted by a scam.

Here’s what you need to know about the USPS smishing text scam.

How the scam plays out

In the USPS smishing text ruse, a target will receive a text like the one described above. The message prompts the victim to click on a link to reschedule the delivery. However, if the victim follows the instructions, they’ll be falling victim to a smishing text scam.

The United States Postal Inspection Service (USPIS) is warning of an uptick in smishing scams that use the USPS as a cover, conning unsuspecting victims into downloading malware onto their phones or sharing personal information with scammers they assume is the USPS. The scammer will then go on to empty the victim’s accounts or steal their identity.

Individuals who’ve recently made online purchases and are expecting a package delivery within the next few days are especially vulnerable to this scam. To the uninformed, the text looks legitimate, and with just one careless click, the scammer has access to the victim’s device and personal information.

However, with one crucial bit of information, you can protect yourself from falling victim to the USPS smishing scam: The USPS never sends out unsolicited text messages about a package. The company will only send a message when a consumer has signed up for alerts about a package’s delivery. If you have not signed up for messages from the USPS, and you receive a text like the one described above, you know you’re being targeted by a scam.

What to do if you’re targeted

If you’re targeted by a smishing text scam, the USPIS recommends taking the following steps:

  • Verify the sender. Confirm the identity of the message sender by checking with the USPS if you actually have a delivery schedule change. Don’t call the number on the text. Instead, reach out to your local USPS office directly.
  • Don’t reply or click on links. Replying to the message or downloading an embedded link can install malware onto your phone.
  • Delete. Save a screenshot of the text to share with law enforcement agencies and then delete the message.
    Block the number and update the security on your device. Prevent a recurrence of the scam by putting the number on your “Do Not Call” list and beefing up the security settings on your phone.
  • Keep personal information personal. Never share sensitive information, like your Social Security number or financial account details, with an unverified contact.

Report the scam

Do your part to stop the scammers by reporting it to the proper authorities.

First, you can report smishing scams that impersonate the USPS to the Inspection Service Cybercrime Team at the USPIS by email. Take a screenshot of the text and send it to spam@uspis.gov. Make sure your screenshot shows the number of the sender as well as the date it was sent. You’ll also need to include your name in the email so the team can reach you, along with any other relevant details about the scam, such as money you may have lost, links you may have downloaded, and personal information you may have shared. The USPIS will contact you if it needs any additional information to help nab the scammers.

You can also report the scam to the Federal Trade Commission at FTC.gov and let your friends and family know about the circulating scam.

Stay alert and stay safe!

How Do I Read the Fine Print on My Credit Card Paperwork?

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Q: Paperwork from credit card companies always seems to be filled with tiny print that’s hard to read and even harder to understand. How do I read the fine print from my credit card issuer?

Here’s what you need to know about reading and understanding the fine print on credit card applications and billing statements.

What do all those terms mean, anyway?

First, let’s take a look at 12 basic credit card terms that are important to know but are often misunderstood:

  • Accrued interest – The amount of interest incurred on a credit card balance as of a specific date.
  • Annual Percentage Rate (APR) – The rate of interest that is paid on a carried credit card balance each year. The amount of interest charged each month will vary according to the current balance. This number can be determined by dividing the current APR by 12 to get the monthly APR rate, and then multiplying that number by the current balance.
  • Annual fee – The yearly fee a financial institution or credit card company charges the consumer for having the card.
  • Balance – The amount of money owed on the credit card bill.
  • Billing cycle – The amount of time between the last statement closing date and the next.
  • Calculation method – The formula used to calculate the balance. The most common is the daily balance method, where charges are calculated by multiplying the day’s balance by the daily rate, or by 1/365th of the APR.
  • Cash advance – Money withdrawn from a credit card account. Cash advances usually have strict limits, higher interest rates and fees.
  • Credit limit – Also known as a line of credit, this refers to the maximum amount of money that can be charged to your credit card.
  • Default rate – Also called the penalty rate, this refers to an especially high rate of interest that kicks in if the consumer is late in making monthly payments and/or has violated the terms and conditions of the card.
  • Grace period – The time between making a purchase and being charged interest on that purchase.
  • Late payment notice and fee – These will alert the consumer to a missed payment and its associated fee.
  • Minimum payment – The smallest amount of money the consumer can pay each month to keep the account current.

What’s the big deal about all the small print on my credit card application?

Don’t sign on the dotted line (or digital signature pad) just yet! Those microscopic letters on your credit card application actually contain important information. Here are some common claims you might find on an application and what the small print below these claims actually says:

Claim: Sign-up bonus: $950!

Fine print: Must spend $3,000 on the card within the first three months of ownership. Redeemable only at participating airlines.

Claim: Interest-free offer!

Fine print: Expires after 18 months, the same time a 22.5% interest rate kicks in.

Claim: 0% balance transfer!

Fine print: With a $300 balance transfer fee.

Claim: 5% cash back on grocery spending!

Fine print: Capped at $1,000 per quarter and only at participating grocery stores.

Claim: Cash advance of up to $1,500!

Fine print: With 20% interest and a $200 cash-advance fee.

Claim: Generous 25-day grace period!

Fine print: We reserve the right to shorten the grace period at any time.

How do I find the fine print on my credit card application or statement? 

Read the fine print before you sign up for a credit card offer. You can find this information on the credit card’s paper or digital application under a label marked “Pricing and Terms” or “Terms and Conditions.” You can also find this information when researching credit cards online; look for it under the “Apply Now” button where it may be labeled as described above, or as “Interest Rates and Fees” or “Offer Details.”

If you’ve already signed up for the card, you’ll find these conditions on the “Cardmember Agreement” that generally accompanies a new credit card. The text will be lengthy, but will likely be divided into sections, including a pricing schedule, relevant fees and payment details.

Your credit card statements will also have lots of fine print, though most of it will be on the back of the bill. This information will include all the information from your application, as well as some additional information, including reports to credit bureaus, how your interest rate on the balance is calculated, how you can avoid paying interest on your purchases and how to dispute fraudulent charges on your bill.

You can find the small print on your credit card applications and statements by looking for an asterisk (*) or dagger (†), which indicates small-type footnotes at the end of the page or document.

Do I need to read all the fine print? 

Fine print will appear all over your credit card paperwork, but it’s best to pay attention to the tiny letters near the points you most care about. For example, be sure to read up on the information given on all special promotions, introductory offers, bonuses, rewards and more.

5 Reasons We Overspend (and How to Overcome Them)

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We’ve all been there. Maybe it’s that I-gotta-have-it urge that overtakes us when we see a pair of designer jeans. Maybe it’s that shrug as we reach for the $6 cup of overrated coffee that says “I deserve this.” Or maybe it’s that helpless feeling as the end of the month draws near and we realize we’ve outspent our budget — again.

What makes us overspend? Let’s take a look at five common reasons and how we can overcome them.

1. To keep up with the Joneses

Humans are naturally social creatures who want to blend in with their surroundings. When people who seem to be in the same financial bracket as we are can seemingly afford another pair of designer shoes for each outfit, we should be able to afford them, too, right?

The obvious flaw in this line of thinking is that nobody knows what’s really going on at the Joneses’ house. Maybe Mrs. Jones’ expensive taste in shoes has landed the family deeply in debt and they are in danger of losing their home. Maybe her Great Aunt Bertha passed and left her a six-digit inheritance. Maybe all of her Louboutins are cheap knockoffs she bought online for $23 each.

Break the cycle: Learn to keep your eyes on your own wallet and to ignore how your friends or peers choose to spend their money. Develop a self-image that is independent of material possessions. Adapt this meme as your tagline when you feel that urge to overspend as a means to fit in: Let the Joneses keep up with me!

2. We don’t have a budget

recent survey shows that 65% of Americans don’t know how they spent their money last month.

When all of our spending is just a guessing game, it can be challenging not to overspend. We can easily assure ourselves that we can afford another dinner out, a new top and a new pair of boots — until the truth hits and we realize we’ve overspent again.

Break the cycle: Create a monthly budget covering all your needs and some of your wants. If you’d rather not track every dollar, you can give yourself a general budget for all non-fixed expenses and then spend it as you please.

3. To get a high

Retail therapy is a real thing. Research shows that shopping and spending money releases feel-good dopamine in the brain, just like recreational drugs. David Sulzer, professor of neurobiology at Columbia, explains that the neurotransmitter surges when people anticipate a reward — like a shopper anticipating a new purchase. And when we encounter an unforeseen benefit, like a discount, the dopamine really spikes!

“This chemical response is commonly called ‘shopper’s high,’” Sulzer says.

This explains the addictive quality of shopping that can be hard to fight. When life gets stressful, or we just want to feel good, we hit the shops or start adding items to our virtual carts.

Break the cycle: There’s nothing wrong with spending money to feel good, so long as you don’t go overboard. It’s best to put some “just for fun” money into your budget so you can make that feel-good purchase when you need to without letting it put you into debt.

4. Misuse of credit

Credit cards offer incredible convenience and an easy way to track spending. But they also offer a gateway into deep debt. Research shows that consumers spend up to 18% more when they pay with plastic over cash.

Break the cycle: When shopping in places where you tend to overspend, use cash and you’ll be forced to stick to your budget. You can also use a debit card with a careful budget so you know how much you want to spend.

5. Lack of self-discipline

Sometimes, there’s no deep reason or poor money management behind our spending. Sometimes, we just can’t tell ourselves — or our children — “no.”

Scott Butler, a retirement income planner at the wealth management firm Klauenberg Retirement Solutions in Laurel, MD, explains that it takes tremendous willpower to say no to something we want now.

“One of the big reasons people overspend is that they don’t think ahead,” Butler says.

Too often, we allow our immediate needs to take precedence over more important needs that won’t be relevant for years — such as a retirement fund or our children’s college education. We simply lack the discipline to not exchange immediate gratification for long-term benefit.

Break the cycle: Define your long-term financial goals. Create a plan for reaching these goals with small and measurable steps. While working through your plan, assign an amount to save each month. Before giving in to an impulse purchase or an indulgence you can’t really afford, remind yourself of your long-term goals and how much longer your timeframe will need to be if you spend this money now.

Beware Stimulus and Tax Scams

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It’s stimulus season and tax season at once, and scammers couldn’t be happier. They know that taxpayers are eager to get their hands on their stimulus payments and tax refunds. As consumers are working to file their taxes before the May 17 deadline, all that paperwork and payments mean people may be letting their guard down. For a scammer, nothing could be better!

The IRS is warning of a surge in scams as the tax agency continues processing tax returns and distributing stimulus payments to eligible adults who have not yet received them. Here’s all you need to know about the latest round of stimulus and tax scams:

How the scams play out

In the most recent IRS-related scams, scammers will con victims into filing phony tax returns, steal tax refunds or stimulus payments or impersonate the IRS to get victims to sign documents or share personal information, such as Social Security numbers or checking account numbers. The scams are pulled off via email, text message or phone. Sometimes, victims will be directed to another (bogus) website where their device will be infected with malware. Other times, the victim receives a 1099-G tax form for unemployment benefits they never claimed or received, because someone has filed for unemployment under their name. Unfortunately, the losses incurred through most of these scams can be difficult or impossible to recover.

What you need to know

As always, information is your best protection against these scams. Here’s what you need to know about the IRS, the stimulus payments and tax returns:

The IRS will never initiate contact by phone or email. If there is an issue with your taxes or stimulus payment, the agency will first communicate via mail.
There is no “processing fee” you need to pay before you can receive your stimulus payment or tax refund.
The IRS is not sending out text messages about the stimulus payments. If you receive a text message claiming you have a pending stimulus payment, it’s from a scammer.

There is no need to take any action to receive your stimulus payment. Likewise, aside from filing your tax return, there is nothing additional you need to do to receive your tax refund.

If you’ve been targeted

If you receive a suspicious phone call, text message or email that has allegedly been sent by the IRS, do not engage with the scammer. Block the number on your phone and mark the email as spam.

If you are a victim

If you are the victim of identity theft related to taxes or stimulus payments, there are steps you can take to mitigate the loss.

If you received a 1099-G for unemployment benefits you’ve never filed for or received, it’s best not to ignore it. Contact your state’s unemployment office to report the fraud. It should be able to send you a corrected 1099-G showing you did not get any benefits.

First, report the scam to the correct authorities. If a fraudulent tax return was filed in your name, the IRS will mail you a Letter 4883C or 6330C to verify your identity. You may also need to call the toll-free number provided on the letter and visit an IRS Taxpayer Assistance Center . After reporting the fraud, you’ll likely need to file a paper tax return. Complete an Identity Theft Affidavit (Form 14039) and attach it to the back of your paper return.

If you’ve mistakenly shared your information with a scammer and they’ve stolen your stimulus check, you will likewise need to let the IRS know. Visit Identitytheft.gov where you will receive a personal recovery plan that will hopefully minimize the damage done by the scammer and help you reclaim your lost funds.

It’s tax season and stimulus season, so it’s also scam season! Keep your guard up and follow the tips outlined here to prevent yourself from falling victim to one of the many circulating scams. Stay safe!

Spring Clean Your Finances

woman cleaning

Spring is a great time of year to clear your house of accumulated junk and make it sparkle. Why not do the same for your finances? Junk can accumulate there, too. In fact, some of your money matters may need a good wipe down this season. It is especially true this year, when many Americans are still recovering from the financial fallout of COVID-19, or maybe wondering how to use the latest round of stimulus checks. Whatever your current situation, a thorough spring-cleaning for your finances is a responsible move this time of year.

Here are some ways to spring clean your finances:

Sweep out your budget

It’s time to shake out the dust in your budget! Review your monthly spending and find ways to cut back. Have you been overdoing the takeout food this year? Buying up more shoes than you can possibly wear? Pare down your budget until it’s looking neat and trim.

Freshen up your W-4

Tax season is prime time for revisiting the withholdings on your W-4. If you received an especially large refund this year, you may want to adjust the amount you withhold. The IRS’s tax withholding estimator  can be a useful tool to help you determine the perfect number.

Deep clean your accounts 

If you’ve switched from one bank or credit union to another, you may have dormant accounts that are still open and may be charging you fees. Or, perhaps they’re holding onto money you’ve forgotten you have! And don’t forget about the 401(k) you may have from an old job. Now may be the time to transfer those funds to your current 401(k).

This spring, do a Marie Kondo on your finances and get rid of any accounts you don’t need any longer. A minimalist approach to your finances will make it easier to manage your accounts. It will also give your savings a greater chance at growth, and help you avoid fees for unused accounts.

Toss out your debt

Get ready to kick that debt for good!

If you’ve been stuck on the debt cycle for too long, make this spring the season you create a plan to break free.

First, trim your budget or consider a side hustle for earning some pocket money, designating these extra funds for your debts. Next, choose a popular debt-busting approach, such as the avalanche method, in which you pay off debts in order from highest interest rate to lowest, or the snowball method, where you start with the smallest debt and then move up your list as each is paid off. Once you’ve chosen your approach, maximize payments to the first debt on your list, making sure not to neglect the minimum monthly payments on your other debts. Before you know it, that debt will be gone!

Dust off your saving habits

Have you been remembering to pay yourself first? Get into the habit of maximizing your savings this spring with a tangible financial goal. You can also make savings an itemized line in your budget. This way, you’ll have funds set aside for this purpose, instead of savings only happening if there’s money left over at the end of the month. Finally, automate your savings by setting up a monthly transfer from your checking account to your savings account. Never forget to pay yourself first again!

Make your investments sparkle

Whether you’re an experienced investor or you’re just getting your feet wet, it’s time for a spring cleaning of your investments! Check if your allocation strategy is still serving you well, whether you need to adjust your diversification and if your retirement accounts are on track for your estimated retirement timeline.

Make your stimulus count

Don’t let your stimulus payment and tax refund blow through your checking account. Instead create a spending plan for the funds that includes paying down debt, allocating some of the money for long-term and short-term savings and possibly investing another portion of the payment. Don’t feel guilty about using the rest of your stimulus check to splurge on a purchase or experience you’ve been wanting for a while now. The money is being distributed with the hopes that it will help stimulate the economy, and the best way to do that is to spend — just don’t go overboard.

Spring is the perfect time to give your finances a thorough cleaning. Follow our tips to make your money matters shine!