New Type of Phishing Attachment Proves No Attachments are Sacred

As if there aren’t enough phishing scams to watch for, there is another one targeting customers of several well-known banks and users of money transfer services. In an email that appears to have been sent by one of the following organizations, an attachment in an email requests users to open it to “verify” accounts, otherwise they will stay frozen.

The organizations used include, Chase Bank, Capital One, and Wells Fargo for online banking and PayPal and Venmo. The email claims that user accounts are frozen because “security alerts” were triggered and the user needs to verify the account to release it. There is an attachment that brings up the phishing page where personal information is requested.

 

This type of trick has been seen numerous times before. In fact, one targeting PayPal users was going around very recently. However, in most cases the attachments in the email messages that appear are disguised as PDF, EXE, or DOC. This one, however, is an HTML file, proving that, as Jim Stickley of Stickley on Security says, “Literally no type of attachment is guaranteed safe to open these days.”

The obvious message is never click attachments in email, particularly if they are unexpected or come from unknown senders. Always make sure they are not infected with some type of malware before opening. If you cannot be 100% sure, don’t do it.

If you need to verify your account details, log into your accounts directly by going to a previously bookmarked link or by typing in the address you know is the correct and safe one. If all looks well when you do that, you know for certain the email message was trying to phish you and you can pat yourself on the back for not falling victim to it.

The cloud security company that found this scam, Cyren said that this one is particularly common right now. It increased 50% over February in only the first half of March.

© Copyright 2017 Stickley on Security

Personal Finance for Millennials

Many Millennials, who graduated during a time of job scarcity and enormous student debt, are more than a little skittish about financial matters. After all, in addition to their own challenges, many saw their parents’ generation struggle with layoffs, stock market losses, and the housing crisis. Still, there’s a lot that today’s 20-somethings can do to build a brighter financial future.

Commit to Saving
If you’re living paycheck to paycheck, saving may seem out of reach. But the first step is to make a budget, identifying where, exactly, all of your money’s going now and pinpointing the wallet sucks that are keeping you from saving. Make it a goal to save at least 10-15% of your income, and start by creating an emergency fund with 3-6 months of living expenses. If, after seriously scrutinizing your budget, you just don’t see room for saving, at least commit to saving any financial windfalls—like bonuses and tax refunds – and saving future salary increases.

Looking for Supplemental Income
For many young people who are just starting out, the best way to find money to save is to generate additional income with a side job. If your employer doesn’t prohibit it, you might take on a second job during your off-hours or earn extra cash Ubering or pet-sitting. Or, if you’re a crafty sort, you could try selling your wares on a site like Etsy.

Start Investing Early
Once you have a decent emergency fund, you should start thinking about retirement. Yes, retirement! If your employer offers a 401(k) plan, sign up as soon as you’re eligible, because even small amounts set aside while you’re young will add up to a significant nest egg decades from now. And, if your employer offers 401(k) matching funds, be sure to contribute enough of your earnings to max out the match. Otherwise, you’re leaving money on the table.

Manage Your Debt
No discussion of Millennials’ finances would be complete without a word or two about student debt. If you’re carrying a heavy burden in federal loans, you may have options for restructuring your debt to make it more manageable. If your loans are with private lenders, you’ll have less flexibility, but focus first on paying off the loans with the highest interest rates. The same goes for credit card debt. New grads are often bombarded with credit card offers, so it’s easy to get in over your head. If that’s where you are, rip up any new offers and commit to whittling down your debt by refraining from new charges and always paying more than the monthly minimum.

Shape Up Your Credit Score
Being late with payments or, worse yet, defaulting on your credit obligations has a huge and negative impact on your credit score. This may not seem like a big deal if you’re not looking to buy a house or car anytime soon, but it isn’t just lenders who make decisions about you based on your credit score. A poor credit score can cause you to pay higher rates for car insurance in some states. Most landlords and many employers also check credit scores when evaluating candidates.

 

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Mistakes on Your Tax Return Could Lead to an Audit

You’re not alone if your heart pounds when you see a letter from the Internal Revenue Service (IRS) in your mailbox. While some lucky filers get sent a letter because they’re due a larger refund, most of us fear the worst – an audit.

Those fears may be largely unfounded for the average household. Only about one percent of taxpayers get audited, and high-income taxpayers are disproportionately targeted.

If you are audited, it might not be like you imagine. An audit could focus on a particular line entry, credit or figure, and you might only need to mail or fax a copy of the relevant paperwork, such as an insurance report or receipt.

Even so, getting audited isn’t fun. In the best case, you have to take the time to dig through your records and respond. In the worst case, you have to do all that as well as pay penalties and interest.

What can you do to help reduce your risk of audit? Audits, or examinations as they’re also referred to, could be the result of a random selection, mismatched documents, deviation from the expected “norms” for similar returns or connection to someone who’s being audited. But there are a few things you can do to help minimize your chances of being audited.

Enter all your information correctly. Take an extra few minutes to double-check the information you entered when preparing your tax return. A misspelled name or wrong number could lead to an examination.

Include information from every form with your return. When an organization sends you a tax form, it also sends a copy to the IRS. The IRS has an automated system that can flag a return when you don’t include information from one of the forms you received.
Don’t treat a hobby as a business. You might enjoy your hobby and occasionally make some money from it, but that doesn’t make it a business. Business and hobby expenses are treated differently and you can’t claim a loss from your hobby. If you try, that could be a red flag.

Know the home-office rules. Many small business owners and contractors work from home, but that doesn’t automatically mean you can claim the home-office deduction. You can’t claim a guest bedroom where you occasionally work, the room (or part of a room) must be used exclusively and regularly for business.

Only claim the EIC if you have earned income. To qualify for the Earned Income Credit (EIC), you need to have earned income, such as wages or salary, for the year. Other types of income, including alimony, child support, unemployment benefits and Social Security won’t qualify you for the EIC.

Working with a professional tax preparer, such as a certified public accountant (CPA) or enrolled agent (EA) could help you avoid making errors, but it doesn’t guarantee you won’t be audited. Similar types of support are sometimes offered with online tax preparation software for a fee. In either case, if you’re required to pay more tax, the bill may get passed on to you.

Don’t let fear cost you. Some taxpayers shy away from claiming legitimate credits and deductions because they fear an audit. That could be a costly choice. There’s only a small chance you’ll get audited, and it could be quick and relatively painless — especially if you keep good records.

Fear also leads thousands of people to fall victim to tax-related scams. Thieves may impersonate an IRS agent, but the IRS will never call or email you requesting a specific type of payment. The IRS only initiates contact with taxpayers by mail, and you can choose among several methods of payment when you owe money.

Bottom line: While there’s no way to guarantee the IRS won’t ask questions about your tax return, don’t let fear of an audit keep you from using the credits or deductions you can rightfully claim. Filing a complete and accurate return could help minimize your chances of an audit, and if you do receive a notice, you may be able to quickly resolve the issue by following the instructions.

by Nathaniel Sillin

Ten Great Ways to Spend an Income Tax Refund

Expecting a substantial income tax refund this year? If so, you are in the majority; over 80 percent of Americans get money back at the end of the tax year, with the average refund being close to $3,100. Rather than having those precious dollars being absorbed into your normal spending routine, get the most out of your cash.

Pay down high interest loans and lines of credit. With average annual interest rates for credit cards and personal loans hovering around fifteen percent, paying off that credit card before making other investment decisions makes good sense.

Fund Your Retirement Account. About 32 percent of all working Americans have no money invested for their retirement. If you are one of them, seriously consider making a contribution to a retirement account right away.

Invest it. Instead of just working for money, let money work for you. If you invested one lump sum of $1,500 in the stock market, over thirty years, assuming a 12 percent return, you’d have $ 53,924! (Of course, do your research first before making any investment decisions and talk to licensed investment professionals)

Open an emergency account. Most Americans don’t have money set aside for those financial emergencies that always seem to happen when there is no cash in the coffer. A large tax refund is a great start for an emergency account. Experts recommend that it should eventually total between three to six months’ worth of essential living expenses.

Pay for repairs. Maintaining expensive possessions now will result in dollars saved tomorrow. Use the money to repair that leaky roof before it develops into a bigger problem; replace those dangerous bald tires with new, safe ones.

Start a personal endowment. Investing in your emotional, physical, intellectual, and career growth is a wise use of money. Whether it’s paying for a gym membership or a cooking class, you’ll feel effects of this type of investment fast.

Make an extra home mortgage payment (or two). Though you won’t feel the benefit immediately, doubling up on a mortgage payment now can save you months of mortgage payments later.

Donate to a charity. Giving back to the community is a wonderful way of supporting a cause that you are passionate about. Even better – in many cases at least a portion of your donation is tax-deductible too.

Open a College Savings Plan for your child. A four-year college education can cost upwards of $100,000. Save for your child’s college education with a college saving plan. For the most part, withdrawals are completely tax-free when used for higher education purposes. Talk to a licensed investment professional about your different options.

Plan a vacation. If you are in a fluid financial position, and can truly afford a bit of luxury, do something you’ve been dreaming of. Money is to be enjoyed as well as earned, saved, and invested. Go ahead. Book that cruise!

Although all the preceding ideas are excellent uses for a lump-sum amount of cash, remember that instead of planning for a refund, it could be more beneficial to come out even. A tax refund is an interest-free loan to the government, and money that is not in your pocket every month. If you have been getting a refund back each year, consider changing your withholding exemptions so less tax is withheld from each paycheck. While a tax refund may feel like a gift from Uncle Sam, it’s not—it’s money that you have overpaid on your income taxes. That said, some people use this as a form of saving.

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Revised January 2016

What Can We Learn from the Tiny House Phenomenon?

You may not have seen one in your neighborhood yet, but the tiny house phenomenon has spread across the country. For some, the move is driven by a desire to downsize and live a minimalist lifestyle. Others see it as a way to decrease their impact on the environment.

Economics are often a large part of the equation. Buying and maintaining a tiny home is relatively inexpensive, and the savings can help many people on their path towards financial freedom.

Tiny-home living (often shortened to tiny living) isn’t for everyone. However, tiny living requires ingenuity and resourcefulness and we can all learn something from those who choose tiny.

Freedom from debt is priceless. Living within one’s means is a foundational belief to many within the tiny living community. Between labor and materials, a tiny home could cost about $20,000 to $60,000 to build. By contrast, the U.S. Census Bureau found the median sale price for a new home in December 2016 was $322,500.

The relatively low price gives you a chance to own a tiny home without having a mortgage that’ll take three decades to pay off. The ongoing savings in the form of lower utility, tax and maintenance bills also make it easier to pay off non-housing debts, such as student loans, and live a debt-free life.

That being said, you can live in a larger home and still look for ways to lower your monthly expenses and fight lifestyle inflation (spending more as you make more money). A common tip is to allocate half of your next raise or bonus to your savings or use it to pay down debts. But why not challenge yourself and use your entire raise or bonus to build your net worth?

Make room for things that are important. Moving into a tiny home can require major downsizing, but some view that as a feature rather than a disadvantage. It’s not about getting rid of things that aren’t absolutely necessary, after all sometimes “unnecessary” decorations turn a house into a home. Rather, from furniture to clothing, you have to decide what’s important to you and leave the rest behind.

It’s easy to fill a large home with clutter and then attempt to clean every spring. Perhaps a better approach would be to take a tiny-home mindset to the store with you. Don’t get bogged down by asking yourself if you can live without something – you can live without many things – instead, try to only spend money on things that add meaning and joy to your life.

You have more space than meets the eye. Watch a tour of a tiny home, and you’ll see that great organization skills and original storage ideas are a must. Tables turn into benches and chairs double as shelves – everything seems to have at least two purposes.

How could a little imagination transform your home? Might a new shelving system and selling items that aren’t important to you anymore give you more room? Inventiveness and thinking outside the box are keys to making the most of what you have.

High-quality products are worth the investment. Many tiny-home owners are keenly aware of the waste they’re putting back into the world. Some even choose to live in a tiny home because it’ll reduce their ecological footprint. The savings that come from tiny living and this approach to life often lead to investments in long-lasting products rather than cheaper alternatives.

Quality over quantity is certainly a worthwhile mentality to adopt. Put it into practice by looking for companies that offer lifetime warranties on their products. You might be surprised to find that from socks to power tools there are dozens of manufacturers that uphold this promise.

How will you make use of these lessons? Simple living and conscious buying aren’t exclusive traits of tiny-home owners. Regardless of the size of your home, you may find that incorporating these principles and practices save you time and money. Two valuable resources that should never be wasted.

by Nathaniel Sillin

Wealth Watchers

Anyone who’s ever tried to lose a few pounds knows that not every diet works for every person. Similarly, it may take a few tries to find a system for managing your personal finances that you can stick to.

For many people, a simple program called “Wealth Watchers” could be the solution. As its name might imply, Wealth Watchers features the journaling technique popularized by Weight Watchers, where you track every morsel eaten – or in this case, every dollar spent – each day.

The idea is that by carefully monitoring your spending habits, you become more aware of, and more likely to change, behavioral patterns that caused you to overdo it in the first place. The program also places heavy emphasis on the importance of financial education.

Wealth Watchers was born from adversity. Its founder, Alice Wood, was a successful estate-planning attorney whose occupation made her very knowledgeable about personal finance issues. But after sustaining a brain injury during a freak airplane accident, Wood suddenly found she was becoming forgetful, unable to concentrate and prone to making poor financial decisions that later plunged her into debt.

Another byproduct of her accident was unexpected weight gain. Wood notes, “I went to Weight Watchers to help drop the extra pounds, and in one of those ‘lightbulb’ moments, I realized that the solution to both my weight and spending problems lay in the simple, daily discipline of keeping track.”

After developing and practicing the core principles that would come to define Wealth Watchers – such as “spend less than you make” – Wood began sharing her ideas with family members and friends, and eventually with larger groups. Then, in January she published a book entitled “Wealth Watchers: A Simple Program to Help You Spend Less and Save More” (Free Press, $19.95).

The book contains formulas for calculating what it costs to live each month, as well as worksheets to track your daily disposable income (DDI), which is the amount you can safely spend each day without going into debt. “The difference between your DDI goal and your actual average daily total of expenses will show you if you are staying on track,” she explains.

Another feature I like is the “Call to Action for Consumers,” a 16-step roadmap for achieving financial health. A few of those steps people sometimes overlook include:

-Make sure your partner is on board with your goals.

-Define and understand the difference between fixed, semi-fixed and discretionary expenses.

-Know your credit score: If it falls below 700, make it higher. Find tips at www.whatsmyscore.org.

-Set up and strictly follow a bill payment system to avoid late payment charges. Many people find automatic payments from credit card or checking accounts helpful.

-Know your “small leaks” – spending weaknesses that can undermine your goal (e.g., buying unnecessary gadgets).
Share your goal with others. That’s why so many folks find Weight Watchers meetings helpful.

The bottom line is: Find a system that works for you. For Wood, adapting techniques she learned from Weight Watchers to track and control expenses was the key to her financial recovery.

By Jason Alderman