Toss or Shred?

identity-theft-shreddingWith all the horror stories out there about identity theft, it can feel like the best policy is to shred any document that has any tidbit of information about you. While you certainly do that if it makes you feel more secure, you don’t necessarily have to destroy every single thing. Rather than run down everything that should be shredded, it’s helpful to think of types of information that should be shredded instead of types of documents.

The information you want to make sure gets shredded is anything relating to:

  • Applications for credit
  • Date of birth
  • Driver’s license number
  • Financial institution or credit card account numbers
  • Insurance coverage information
  • Medical information
  • Mother’s maiden name
  • Passwords
  • PINs
  • Place of birth
  • Signatures
  • Social Security number

These are the main treasures identity thieves are looking to capture, so be aware of the presence of this information and deal with it accordingly. Quality crosscut shredders—the kind that dice your documents instead of just cutting them into strips that can be taped backed together—can be found for under $30, so it’s better to make that small investment than to be out thousands of dollars because of your information falling into the wrong hands.


© 2012 BALANCE

Financial Goals: Staying Focused And Motivated

motivated-400x230Defining goals and putting a plan in place is essential to personal financial success. But that’s only part of the battle. Maintaining attitudes and behaviors to get you to those goals takes effort. But it doesn’t have to be grueling. There are techniques you can adopt to make the journey quicker and easier.

Envision Success

Visualizing yourself enjoying the achievement of your goal can help you remember why you’re doing it in the first place. For example, if your goal is to replace you current junker with a new vehicle, imagine yourself enjoying a stress-free cruise down the road with a breakdown the furthest thing from your mind.

Give Yourself Rewards Along the Way

If your goal involves saving $5,000, build into your plan little “presents” for yourself as you reach certain plateaus. Like for every $1,000 saved you get to put $20 toward a fun shopping item.

Make It a Partnership

Is a loved one also trying to reach a goal of their own? Make a pact to regularly check in with each other to monitor progress and offer encouragement. If you there isn’t someone close to you suited for this job, look for a financial support community online.  If your goal involves other family members, do your best to not only include them in tracking progress, but get them excited about the process.

Build In Reminders

Maybe it’s a Post-it note inside a cabinet you open regularly. Or perhaps it’s an electronic reminder sent via a computer scheduling application. Either way, it never hurts to get a reassuring hint that your goals are there for a reason. If you’re a highly visual person, consider putting a picture of your goal where you will see it a lot, like at your desk or in your car.

Treat Setbacks as Learning Experiences

It’s unlikely that you will ever encounter entirely smooth sailing on your way to a financial goal. Because of this, it’s important to have the right attitude about the obstacles that spring up. If you get too discouraged, the whole plan could be lost. By treating unexpected jolts as opportunities for sharpening your skills, you put yourself in a better mind frame for ultimately reaching your destination. Financial goals take work, but it doesn’t have to feel like work. By developing techniques to stay dialed in on the process of achieving your goals, you may even find the experience enjoyable!

© 2013 BALANCE

Fight Fraud with a Credit File Freeze

credit_freezeIdentity theft can catch even the most vigilant off guard. Once a thief has possession of your personal information, s/he has the ability to open accounts and borrow in your name—leaving you with the bill and credit damage. In consumers’ interest, states have enabled consumers to “freeze” their credit file. Attaching a credit file freeze, also called a security freeze, prevents the credit bureaus from releasing your credit report and score to new lenders and other businesses, which can stop a thief from getting new credit in your name. However, it does not prevent businesses that already have a relationship with you from accessing your report.

How It Works

In most cases, financial institutions will need to see your credit report or score when you apply for credit. If your credit file is frozen, they can’t access it and won’t be able to approve a new loan or credit line. Insurance companies, employers, and landlords that you don’t already have a connection with will also be prevented from checking your file. Thus, thieves will have a very hard time opening fraudulent accounts as long as the credit file freeze is in place.

When They Work

Credit file freezes are only effective against the type of fraud where a thief tries to open new accounts. If s/he has possession of your existing credit cards or account information, s/he may be able to use them. (This is why you should notify your financial institutions immediately if you believe you were the victim of identity theft.)

Additionally, while it is the norm to check your credit report, some businesses don’t check credit reports at all. These businesses may grant a loan or provide a service in your name if the thief can provide them with your identifying data.

How to Add and Remove a Freeze

To place a freeze on your report, contact each credit bureau. The cost of this service varies by state. Generally, you do not have to pay a fee if you were the victim of identity theft. As proof, you may have to provide the bureaus with a police report or another affidavit.

Once the request is received and processed, the credit bureaus will send you a private personal identification number that you can use to lift the freeze. You will need to lift it before applying for credit or if you want a potential employer, landlord, or other business to check your credit. Depending on your state, there may be a fee to lift the freeze as well as a fee to add it again.

Credit Bureau Contact Information

  • TransUnion  Attn: Fraud Department P.O. Box 6790 Fullerton, CA 92834; 1-888-909-8872;
  • Equifax  Attn: Fraud Department P.O. Box 105788 Atlanta, Georgia 30348; 1-800-685-1111;
  • Experian  Attn: Fraud DepartmentP.O. Box 9554Allen, TX 75013; 1-888-397-3742;


Copyright © 2005 Balance

Credit Cards and Teens: No Minor Issue

teen credit card 2Credit cards are not just for adults anymore—in fact, one third of all American teenagers are cardholders. However, because it is so easy to get into financial trouble with that little piece of plastic, it is very important to learn how to use it before ever uttering those first magic words: “charge it!”

What Credit Is

When you pay for something with a credit card, you are borrowing money from the issuer (bank, credit union, or other financial institution), with the promise that you will either repay it all or make the minimum payment requested when the bill comes. If you don’t pay it in full, the remaining sum will “revolve”—move onto the next month’s bill. Interest will be added to the balance, and will continue to rack up until the debt is paid.

Example: You charged $500 for school books and materials, but can only pay $25 a month. If the interest rate on your credit card is ten percent, it will take you one year and ten months to repay—plus $49 in interest. However, if the interest rate is 22 percent, it will take two years and two months to repay, plus $129 in interest.

How you use credit matters! If you want to finance a car, get a cell phone contract, rent an apartment, obtain a job, qualify for low insurance rates, and (one day) buy a home, you will need to treat credit right—not just now, but over the long term.

How to Get It

Getting started can be a challenge. After all, without a credit history to assess, how will a credit issuer be confident you will repay what you borrow? They don’t, which is why one of the best ways to begin is with a secured credit card. This type of credit card is linked to a savings account, and your credit line is equal to the amount of the deposit. Because the credit issuer may claim the funds in the account if you fail to pay, they assume little lending risk and so are more open to lend to a newcomer.

Store and gas cards can be another good option, since they often have less rigorous standards than unsecured credit cards. They may only be used at a specific store or service station though, and the interest rate is often higher than other forms of credit.

Finally, when you have proved your credit worthiness, you are ready for an unsecured credit card.

When shopping for any credit card, look for the following:

  • Low annual percentage rate (APR). The lower the APR (the interest you are charged on balances), the less you’ll pay to hold onto debt.
  • Long grace period. A grace period is the number of days (typically 15 to 30) you have to pay your bill in full before interest is added. The grace period usually applies only to new purchases, but in some cases (check the application!) is completely eliminated if you carry over a balance from a prior month.
  • Low cash advance fees. Though you may be able to take cash out from your account, it is best avoided. Average service fees are between two to three percent of the advance, and interest kicks in immediately.
  • No annual fee. If you are new to credit you may have to pay an annual fee, but after a year or so of good use, ask for it to be reduced or eliminated.
  • Low penalty fees. You will be charged hefty fees if you pay after the due date or go over your credit limit. Though you should manage your account so you do neither, look for low penalty fees anyway. Just in case.

How to Use It

Once you have a credit card, use it wisely:

  • Stay out of debt. It doesn’t take long for a few purchases to add up to hundreds, even thousands, of dollars. Never charge more than you can afford to repay by the time the bill comes in. To avoid overspending, keep a record of all credit card purchases you make during the month, with a running total of what you’ve spent. When you reach the amount you can afford to pay off, stop using the card until the next month rolls around.
  • Pay more than minimum payment due. If you absolutely can’t pay the entire balance, at least pay more than the requested minimum payment. Because the minimum due is often very low (usually between two to four percent of the balance), you’ll drag the debt out for many, many years if that’s all you pay.
  • Pay on time. Miss a payment cycle and your credit history will take a quick and hard hit. And if you fail to pay by the due date you will have to pay that late payment fee—typically $25 to $40.
  • Limit the number of cards you have. Only apply for the plastic that you absolutely need. The more open credit lines you have, the more you’ll be tempted to spend beyond your means. Also, too many applications can hurt a credit score.

Credit Reports and Credit Scores

There are three major credit-reporting bureaus in the U.S.: TransUnion, Experian, and Equifax. These companies collect credit-related data, compile it into reports, and then provide it to businesses that need to evaluate lending risk and make other business decisions. Your credit and debt information will be on these reports in detail, including when you opened the accounts, if you’ve paid on time, how much you owe, if accounts have gone into collections, your credit limits, and if you have been sued for a debt.

Think being graded ends with school? It doesn’t. The way you treat credit is graded (scored) all your life. A credit score is a mathematical risk assessment based on the information on your credit report. A common scoring model is one developed by Fair, Isaac and Company. They issue a FICO score that ranges from 300 to 850. It is based on (in order of greatest weight) payment history, amounts owed, length of credit history, pursuit of new credit, and types of credit in use. High scores translate into cheaper loans an increased edge for employment and housing opportunities.

A credit card is not just a convenient payment method, but also a way of proving stability and responsibility. Always use credit wisely—your future depends on it!

Copyright © 2005 Balance

Samsung Galaxy Owners Vulnerable to Spying

SamsungIt’s been a busy couple of months for the cybersecurity world. The U.S. government announced recently that it had been a victim of two serious data breaches on the Office of Personnel Management (OPM). In addition password management company LastPass released notifications that it also had been hacked and urged customers to change master passwords and use multi-factor authentication. Now, a security company has reported that it found a security flaw in Samsung Galaxy phones last November that still hasn’t been fixed.

The flaw has to do with the keyboard on those devices. Technology firm, SwiftKey is the maker of the keyboard, but says the flaw is within the implementation of it on the Samsung devices. The way it is installed may allow hackers to access some of the core parts of the computer system on the phone, if they catch it at the right time.

For now, it is being advised that Galaxy owners with versions S3 to S6 avoid using unsecured public WiFI or even the carrier’s network to download updates for the phones. It is because the vulnerability allows the potential for exploit when an update is being installed. It’s not necessarily easy to pull it off, but it can be done. It is safer to install updates from a secured wireless network instead.

The issue may allow users to be exposed to spying. For example, when company executives or government employees travel abroad, it may make it easier for others to eavesdrop; a practice that is well-known to occur for those traveling to China. The U.S. recently approved the Samsung Galaxy for use by government employees. This has become a topic of conversation recently after sensitive information about federal employees was breached in the OPM incidents. The fear is that the information stolen may be used against them and the U.S.

SwiftKey claims it only found out about the issue recently. Although Samsung was notified about it over six months ago, the company that reported it to them said Samsung asked for over a year to fix it before notifying the public about it. Samsung claims it didn’t know the full details and severity of it until this week. Now that the cat is out of the bag, the company has said it will have a fix ready in a few days.

However, it is up to the phone service carriers to release it to their users and that has historically been a long process. When they do, apply it right away; from a secured location.

© Copyright 2015 Stickley on Security

Money Management for the Boomerang Household

boomerang-e1398693933964Due to recent economic realities, multi-generational living has been on the rise for many families.

A 2014 Pew Research Center analysis showed that a record 57 million Americans, equal to a little over 18 percent of the U.S. population, lived in multi-generational family households in 2012—double the number in 1980. The major driver was young adults aged 25-34. According to Pew, nearly 24 percent of these older millennials lived in multi-generational households, increased from nearly 19 percent in 2007 and 11 percent in 1980.

It’s possible the “boomerang” family trend will remain in place for some time to come. For homeowner parents who may also be juggling the “sandwich” responsibilities of caring for older relatives, paying attention to the financial and behavioral details of taking in family is critical. Here are some suggestions to consider:

Your finances come first. Operating a full house means higher utility and food costs and additional wear and tear on the property. Taking in family also shouldn’t derail a parent’s career goals or retirement planning, nor should it diminish other necessary financial objectives like maximizing savings or eliminating debt. That’s why dual- or single-parent households might begin with a complete financial assessment before welcoming kids or elders back home. A discussion with qualified financial and tax advisors might be worthwhile to determine how much expense you can take on. For arrangements that go beyond free lodging to direct cash support of family members, gift tax issues should be explored.

Make a real agreement. A home is stability and therefore something of significant value. That is why it is appropriate to consider rent or request in-kind services in exchange for room and board. Young adults—particularly those who were fully under parental support in college—need to learn this important lesson even if they are moving home to save money to pay off loans, to buy a car or put a down payment on a home. Ask trusted advisors about what makes sense in your situation. If you decide to accept rent, know there are potential tax issues based on the structure, timeframe and expenses related to such an agreement. Legal paperwork may be required, but there also may be rental expenses you can deduct.

Establish timelines. In the real world, financial arrangements are rarely open-ended. Depending on the financial, tax and legal advice you receive as well as local tenant law and personal preferences, you may be signing an official lease for your family member’s stay with a specific timeline of months or years. Whatever the requirements, make sure you have an effective framework that sets specific financial and behavioral rules you want met.

Start with a family meeting. Before moving trucks arrive, family members should meet for a discussion about the impending move. Start by letting your child or family member talk through why they want to move in, whether they have financial goals tied to the living arrangement and how long they plan to stay. Share the structure you envision, including the payment details you would consider. No matter how agreement is struck, it should begin with a full discussion of needs, preferences, financial terms, and most of all, ways to make the arrangement successful and smooth. Once the move happens, regular conversations should continue about the living arrangement. After all, boomerang families have unique, ongoing financial issues that will require discussion.

Prepare to track expenses. Once agreed, retrofit your household budget to keep track of higher food, utility and related expenses for cost-sharing and potential tax purposes. Having people you love living with you will hopefully have many rewards that go beyond simple dollars, but always know what the arrangement is costing you.

Bottom line: Opening your home to returning family members is a real financial commitment. Think through money, tax and household issues before you say yes.

By Jason Alderman