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By Paul Woodruff, Prosperity Connection

Everyone in St. Louis seems to have an opinion on payday lending. Politicians decry the industry as usurious. Consumer advocates demand that ‘predatory lenders’ be shut down. Middle and higher-income people don’t understand why the loans cost so much, or why anyone would take one out. Meanwhile, the consumers who use these services just want access to a short-term loan so they can pay rent, repair their car, keep the lights on, and more. Presently, payday lenders fill that need and are accessible.

Many people are struggling to get by. According to the 2018 Prosperity Now Scorecard, despite nationwide low unemployment rates, nearly a quarter of all jobs in America are low-wage. Add to that the fact that 45.8% of white renters and 53.9% of renters of color are cost-burdened (meaning they spend more than 30% of their income on housing). For those living on a fixed income, primarily seniors and the disabled, the picture is increasingly bleak as their benefits remain flat and the underpinnings of state and federal safety nets continue to fray.

Community Development Financial Institutions (CDFIs) and nonprofit loan funds operate in our area to offer consumers small-dollar loans ($100 – $1,000) at more affordable rates and the opportunity to engage with financial experts who can provide free guidance on how to build credit, eliminate debt, and manage household finances. CDFIs like Justine PETERSEN and St. Louis Community Credit Union (SLCCU) give consumers a pathway to financial wellbeing through a host of affordable opportunities. Prosperity Connection, a nonprofit, established RedDough Money Center in 2016 to compete directly against payday lenders by offering lower cost small-dollar loans, check cashing services, and more.

A growing number of financial institutions, both banks and credit unions, offer small-dollar loans which are more affordable than traditional payday and title lenders. If you are facing a difficult financial situation and are in need of a small loan, here are some things to keep in mind:
• Ask your financial institution what small-dollar loan options they offer (if they don’t have any, they may have partners to refer you to)
• Before taking out any loan, know what you’re getting into by asking questions.
o What is the interest rate?
o How long do I have to pay the loan back and how much will it cost?
o Are there any fees for paying the loan off early?
• Consider meeting with a financial coach to establish financial goals, build a strategy to meet goals, and navigate difficult financial situations when they arise.

Payday lenders don’t have to be your only option when a financial emergency arises. Ask questions, use the resources available to you, and take control of your finances.

By Charles Hall II

The bottom line is that online fraud is an escalating issue and unfortunately, it’s here to stay. As a result of being inundated with stories of online fraud and fraud claims from customers, I realized that the training and information received by banking professionals is sorely lacking among consumers. Yes, tips to avoid fraud prevention are accessible to anyone that can access the internet, it appears the channels disseminating information on how to avoid online fraud are being obstructed from the average consumer by everything else we see and experience online.

The argument could be made that it is the financial industry’s responsibility to provide sound advice to consumers on how to avoid online fraud but ultimately YOU are responsible for the safety and security of your online behavior. In other words, you have a responsibility to your finances, your family and your future to assess and modify your online habits to reduce instances of online fraud and minimize the resulting impact in the future.

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Listed below are some of the most common methods of online fraud and identity theft:

Data Breaches

A data breach is the release of secure, private or confidential information to an untrusted environment. Data breaches occur when hackers (or even an employee) break into a corporate or government computer system to steal data. This data can include information such as credit card numbers, names, addresses, Social Security numbers, and much more.

Skimming

Skimming usually happens in close proximity to where transactions are completed; using a hand-held scanner to steal your information and in some cases store your personal information for later use.

Phishing

Phishing is an attempt to get you to share personal information or to get you to click a link that essentially exposes personal information stored in your email account or on your hard drive.  It usually comes in the form of an email asking for information from someone posing as your bank or other official entity.  Phishing can also happen in a popup on your computer screen saying you’ve won a prize or a contest.  No matter what the phishing attempts intended goal is, fraudulent persons are only able to reach that goal if you take the bait.

Unsecure Smartphones

Regardless of what your smartphone manufacturer says, for the most part smartphones are not very secure.  When you make a call, use an app, send a text, or send email, it’s possible for someone to be monitoring those activities.  With the right equipment or malicious app, it’s easy to gain access to a smartphone and steal any data on that phone or any data associated with that phone.

Unsecure Internet Connections

Using an unsecure public Wi-Fi connection can also be a problem.  Since it’s public and unsecured, others can monitor your activity and gain access to your computer.  Be very careful about what networks you use.

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Now that you have been equipped with some of the ways your information can be stolen and the correct terminology, it’s important that we adopt proven prevention techniques to move you closer to a healthier, more fruitful online life. Doing a simple online search using “tips on how to prevent online fraud” will populate countless articles and blog entries on the subject. What I realized was that the tips were largely similar and lacked the personal elements that prove to the reader how much success they can have with a particular prevention tip.

I have always been vigilant as it relates to my activity online. When I speak with friends, family and customers, I start by assessing how that individual uses the internet. From there I divert the conversation toward effective practices that will benefit their specific circumstance. With that, I preface any solutions with one statement and one directive, that if implemented will overwhelmingly reduce instances of online fraud. Are you ready?! Here they are.

To be clear, NOTHING is free! Absolutely NOTHING! For-profit companies (i.e. Apple, Amazon, Walmart, etc.) are unable to make money if they continuously provide free products to other for-profit companies to give to consumers for completing surveys or for signing up for a free now, pay later service or product. So, no matter how much you want that item or how professional the email or advertisement seems to be, it’ll cost you in the long run!

STOP! Don’t click that link (or button)! When presented with a random pop up offering a free gift or an email made to look like it was sent from your bank, simply close the pop up or for email, immediately report as spam. Keep in mind this directive goes far beyond just pop ups and emails. It also applies to the ads that appear in your social media timeline feeds shared by some obscure company along with a basic, poorly designed image. Often those are also pathways to any numbers of felonious actions toward you. Please note, if a social media timeline ad looks suspicious or you have fallen prey to one of these ads, report it to the website for review. This is the most effective way consumers can help to combat fraud.

Additional practices:

Because most online platforms you access online require you to register for their site in order to get wider access to site content I recommend you create an additional email account. This email account would be used in lieu of your primary email address when inputting your contact information into any websites outside of well known, major brands. This practice, when used consistently, will prevent unwanted or annoying emails from flooding your primary email account as well as lessen the amount of spam emails. For example, for purchases made through websites like Walmart.com and Amazon.com it is okay to use your primary email address but if you decide to make a purchase from a site like dresses.com, handbags.com or necktiesrus.com I would suggest using the alternate email address to register and make your purchase.

Utilize a trusted peer to peer payment service like Cash App that will allow you to instantly add cash from your bank debit card directly to an online account. Once money has been added, you are able to send money to other Cash app users by using what they refer to as a $Cashtag. Additionally, this app allows you to order a personalized debit card to access the funds you have available in your Cash app account. Before I make a purchase online I instantly fund the Cash app card through the app and use that card to make the purchase. After using the card, the app allows you to turn off the card until you are ready to use it again. With this prevention practice, you are isolating your online transactions to one card only active during your purchase thereby thwarting any possible chance of that card being used fraudulently.

By Charles Hall II

When we think about spring cleaning, most often we think about physically cleaning our living space, throwing away things we don’t need and organizing various areas of the home. Why not adapt that same tradition to our finances? The thought alone may be overwhelming for many but like any other task we take on, setting goals is always a good place to start. Don’t try to accomplish a financial overhaul all at once. Choose a manageable task and stick to that one job. You can always return to do more next week, next month or even next year. Below are a few of the many manageable financial spring cleaning tasks to get you started:

1. Scan, upload and backup – Pull out those boxes of important papers and first decide what goes and what stays. Before tossing documents, check with banks and financial services companies, including your 401(k) provider, to learn how long they retain electronic copies of your records. After scanning your documents, upload them to a separate hard drive and/or a reliable cloud storage service. If you want to avoid this becoming a yearly task, simply GO PAPERLESS and download your various statements on a monthly basis.

2. Assess your bank accounts – It’s important that your banking relationships are beneficial to you. If you have too many accounts, close the ones that you have not used within the past year and if needed, switch to an account that adds a little interest or offers some sort of cash back. Banking options continue to evolve with accounts now being offered online only (a great option for a savings account that isn’t easily accessible to you), bank debit cards that can be put “on hold” from the user’s mobile banking app to prevent fraudulent activity and even accounts designed to help repair your credit. While maintaining a healthy banking relationship is important, don’t be afraid to see what other banks are offering. This is also a great time to either update or add beneficiary designations to your accounts as well.

3. Negotiate with your service providers – Nothing excites me more than a deal and service providers are great at offering initial deals to get you on board but fail at offering deals on an ongoing basis. However, the last thing they want to do is lose a customer so why not ask how you can save money or if they can match the price of a competitor. The savings won’t always be substantial but every little bit of savings helps. When it comes to cable, an alternative option is to use free or less expensive services such as Hulu and Netflix.

Implementing financial spring cleaning tasks like these can help take the stress out of managing your finances and in some cases save you money or even make money for you. No matter what your current financial state is, consistent financial wellness is an attainable goal.

 

By Sierra Dean, Justine PETERSEN Community Investment and Outreach VISTA

You’ve still got time before taxes are due on April 17, 2018, but why not complete your taxes early? If you’re surprised by a tax bill, don’t fret; set up payment options that suit your needs. If you’re getting a refund, completing your taxes early will ensure you receive your refund much sooner.

If you are receiving a refund it’s important that you manage the funds appropriately. What better way than to get things organized early? Here are a few options to get you started:

  • Save for an emergency – The unexpected could happen to any of us and we need to be prepared for it. This could include a job loss, vehicle repair, or an illness. Without an emergency fund, you could end borrowing money from friends, family or even taking out a personal loan. Before you receive your refund, it’s a good idea to shop around for a high interest savings account or CD’s with minimal or no fees. Reputable online banks offer savings account that are not linked with your everyday checking account and not as easily accessible as brick and mortar banks. It’s recommended by financial experts to save for at least 3-6 months of living expenses. To avoid being intimidated by the recommended time frame, start by saving for 30 days of living expenses then 60, then 90 and so on.
  • Figure out why you’re saving, so that you know you’re working towards a goal. Your goal can be either short or long term. Short term goals could include emergency fund, vacation, or down payments for a car or home. Long term goals could include retirement, child’s education, or a remodeling project. Picking the appropriate tools for your goals is essential because they’re so many products out there in the market today. If you know that your savings consist of short term goals then you may need to consider obtaining a Savings or Money Market account. For long term goals you may want to look into an IRA, Investment Products, Stocks, Mutual Funds, or 529 Plan.

 

  • Paying off debt could be another option for you. Paying off those credit cards with the high interest rates could save you a ton of money. On average Americans created $1,000 more debt due to holiday spending, so pay it off as soon as you’re able to. Also, if you’ve shopped online lately, certain online retailers will automatically save your credit card information. Clear the cookies from your computer to remove your information from those sites. This could help you cut down on buying items that you don’t need because now you need to go searching for your credit card to make the purchase. Instead of paying off your car at one time, deposit the funds into an account and setup auto payments to pay the remaining car payments. This way you will continue to maintain or build good credit along the way.

 

Once you file your taxes and you notice that you owe, pay whatever you can on the bill. The convenient and easiest way to pay your tax bill is to setup an Installment Agreement. Also, talk to a Tax Accountant for more information.

 

By Sierra Dean, Justine PETERSEN Community Investment and Outreach VISTA

Did you make a New Year’s resolution to be financially fit? Getting it done and staying on task could be a challenge. We all tend to become easily sidetracked, find ways to make excuses, or just procrastinate.

At the University of Scranton research suggests that just 8% of people achieve their New Year goals. Considering that 45% of Americans make a New Year’s resolution and of those 25% of resolutions fail within the first week. It would be great if we could get that achieving number higher.

New Year, new beginnings, and new life, as some would say. Let’s grasp on how to keep our promises to ourselves when we make resolutions. Here’s some a few ways:

  • Be specific about what your goals are. Don’t just say that you need to save money or that you need to lose weight. Write down exactly how much money you want to save and how much you would need to save monthly. So, if you want to have $2,000 in your savings account after 12 months, then you need to automatically deposit $167 into your savings account monthly.
  • Make a list of things that you will accomplish each day to get you towards your goals. Start off small, don’t overwhelm yourself with too much on your to do list. If you’re working towards saving, then your list may consist of different banks or credit unions to reach out to in order to find the best interest rate.
  • You could possibly write down different ways to make more money by doing the things love like, writing, drawing, sewing, knitting, etc. Turn your interests into cash flow and deposit the extra money into your savings account.
  • Surround yourself with wealth minded individuals and start to attend reputable seminars or workshops that pertain to the process of wealth building. Remember, building wealth does not happen overnight, consistent savings is the foundation that wealth and prosperity are built on.
  • Write down your goals, then hang it on your wall, post it on your desktop, or even save it as your screensaver on your phone. Have fun with it!

Keep going after the prize and you will get there eventually. Make sure you celebrate every small win!

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