A single overdraft fee, which hovers around $35, could be collected multiple times in a single day if automatic payments for different bills, for example, are scheduled on the same day funds in your account happen to be all used up.

Over time, these fees end up being “abusive” and “burdensome,” the Center for Responsible Lending says, hitting vulnerable households the hardest. Just 9% of account holders pay 84% of all overdraft fees each year. Those consumers usually carry balances of less than $350 as they face “relentless overdraft fees” that often prompt banks to shut down their accounts entirely.

At CESI, we’ve seen it happen repeatedly as we work with customers to shore up their financial health. And that’s why we’re excited to announce our new partnership with Waiver, a free app that will instantly stop banks from charging you an overdraft fee.

Here’s how Waiver works:

1. Once you’re signed up for the app, Waiver monitors your bank account.
2. When you don’t have enough money in your bank account to cover a payment, the app alerts you to the issue and then initiates an instant transfer to your account and blocks any overdraft fee.
3. Waiver covers the overdraft with its own money until you deposit more funds into the account. That’s when Waiver is repaid.

For CESI customers, this service is entirely free for the first four months. After that, the app only charges $5 when an overdraft fee is blocked, no monthly fees or optional tips — a substantial savings when compared to the typical fee of $35.

There’s a bit of fine print. For now, the program only is available to CESI customers with a Chase bank account and an iPhone. In the beginning, Waiver will provide protection for up to $100 once you sign up. That limit, however, goes up as you build a positive payment history.

The best way to avoid overdraft fees, of course, is to take control of your finances. The Federal Deposit Insurance Corporation offers these tips:

Know your balance

Whether it’s through the paper register that came with your checkbook or by checking your bank account electronically, always know how much money is in your account, the agency recommends. And don’t forget to note random ATM withdrawals; items you purchased with your debit card, which pulls funds directly from your bank account; and the timing of automated payments for bills. These items can add up quickly if you’re not paying attention.

Linking checking to savings

If you have a savings account, connect it to your checking account. That will allow the bank to move money from your savings account to your checking account when you don’t have enough money to cover payments. Banks typically charge only a small fee or no fee for these transfers, the agency says. Of course, you’ll need to keep track of the balance in your savings account, so you don’t siphon too much money away from that account too.

But, while there are steps to protect you from overdraft fees, at CESI, we know consumers sometimes need a helping hand when it comes to managing their finances. And that’s exactly what Waiver is. To learn more and sign up, head over to Waiver’s website.

Studies show again and again that stepping away from work can translate into all kinds of benefits. They include less stress, overall satisfaction with life, improved mood, increased productivity, and even a reduced risk for heart disease, according to the American Psychological Association.

And while it’s nice to sink your feet into a sandy beach or explore a new city, getting away doesn’t have to involve plane tickets or a high-priced resort. Relaxation and fun are as close as the couch in your living room or the park 20 miles away.

But first, set some ground rules. Turn off notifications and access your work email on your phone. If you plan on eating out or visiting local destinations, set a budget. And, as you make memories, be sure to take a few pictures too — just like you would if you’d traveled to some far-flung destination.

Here are 12 out-of-the-box ways to have a fun and affordable staycation.

Look at the stars

In our busy day-to-day lives, it can be almost impossible to take a deep breath and just sit and look at the stars. A staycation provides the perfect opportunity. And to set you on the right course on your stargazing journey, apps can help. Good Housekeeping lists 15 great stargazing apps, and many of them are free. Just install and start looking for Orion.

Visit the next town over

If you haven’t left the borders of your own town or county in recent months, take a day and explore what the next town over has to offer. Play at its parks, pick up food at a new-to-you restaurant and find some new local shops to check out.

Make it a festival weekend

Turn your home into a multi-day board game convention or movie festival. Pick out games or movies that appeal to everybody in the house, set out the snacks, and start relaxing.

Plan a theme night

Wish you could be traveling somewhere in Europe right now? Or Asia? Bring other cultures to your home by planning theme nights. Research different countries. Explore the food. Watch a movie or TV show based in the country you’d rather be visiting. So plan an elaborate English tea and binge-watch “The Crown.” Try your hand at making crepes and check out one of these movies. Or make one of these easy Japanese recipes and watch the popular manga series, “Naruto.”

Go on a food tour

Are there restaurants in your own community that you’ve always wanted to check out but never had the time to? Now you do. Plan for a day of eating every meal out.

Volunteer

Just like taking time off, volunteering also can boost your mental and physical health. It may even help you live longer, according to the Mayo Clinic Health System. And there are a lot of great ways to give back — from making a week-long commitment to simply spending part of a day gathering, for example, toiletries to donate to a homeless shelter. The United Way can connect you with local volunteer opportunities.

Check off a house project 

Whether it’s painting the living room or adding that bookshelf to your bedroom, find a few house projects that you can start and finish during your staycation.

Watch the sunrise and sunset

Search out the perfect spot to take in the sunrise and sunset near you and make plans to be there for both. While you’re at it, set out early morning or late evening picnic to make it festive.

Be a tourist

Are there parks, museums, or other destinations in your hometown that you’ve never visited? Or has it been some time since you’ve visited the local zoo? Be a tourist in your own town and visit.

Just read

It’s easy to “travel” with a good book as the stories and settings transport you to another time and place. So go on multiple “trips” by reading multiple books. Head to the library or finally get to that stack on your nightstand.

Make your own spa day

Turn your house into a spa by indulging in some beautiful flowers, turning on the spa music, and trying some budget-friendly spa treatments.

Go camping

Head to a local campground or just pitch your tent in your own backyard. Roast hot dogs, make s’mores, play some card games, tell ghost stories and create some fun memories together with the ones you love.

Whatever you do during your staycation, treat it as an actual vacation. Don’t cook up a storm — unless you want to. And don’t try to finish every house project — unless you truly enjoy it. Be sure to set aside time for you, so your own tank is full when it’s time to get back to working life.

If you are experiencing financial difficulty and are looking for a solution, non-profit credit counseling can help you make sense of all your options. ​Contact us today for a free financial assessment with one of our certified credit counselors.

The term unbanked is described informally by the FDIC (Federal Deposit Insurance Corporation) as individuals who do not use banks or banking institutions in any capacity. They generally pay for things in cash, by money orders, or prepaid debit cards.

Being underbanked means an individual may have a bank account but still relies on other financial services. These services are money orders, check cashing services, and payday loans to manage their finances and purchases.

I was born and raised in Philadelphia, PA. I still keep up with the news even though I live in North Carolina. The Center City section of Philly is vibrant and still has the majority of independent businesses. For almost two centuries, the city council has strictly limited chains and franchises that could hurt the mom and pop stores. The vast array of these independent businesses and the expression of beauty and culture are the backdrop of the life of every Philadelphian. The kosher delis, Italian bakeries, Soul food, and Chinese takeout. The Greek buffets, bagel noshes, and hundreds of cheesesteak shops. They all boast about being the best in the city.  It’s safe to say that most of the transactions at these businesses are in cash.

A few years ago, there was a lot of backdoor lobbying by online giants. They wanted a slice of the city’s retail pie. They also wanted to be completely cashless, and that was the rub. The pushback was that it would hurt those who are unbanked or underbanked. It would ultimately hurt independent businesses that transact mainly in cash. I know this might seem like a history lesson, but stay with me because it’s a case study of where retail is going, or actually has already arrived and how it will affect those without bank accounts.

Payday Marathon

Let me run through what a typical payday might look like for an unbanked person who makes $500/week.

• An issuing bank of the paycheck will charge $8-$10 to cash it. Some big-box retailers will charge less than $5.00. Smaller neighborhood check cashing stores (and pawn shops) are largely unregulated in most states and can charge whatever they please. That can range from 2%-12% of the amount of the paycheck.
• Paying utilities generally involves buying a money order ($1-$2 each) and mailing it or getting transportation to a place that accepts utility payments.
• To make online purchases, an unbanked person would have to buy a preloaded debit card or a gift card. On top of the amount loaded onto the card, there is usually an activation fee (averaging $5.00), a monthly fee (averaging $9.00), and a re-loading fee ($3.95-$4.95) for each re-loading transaction.
• Money wire transfer fees vary depending on destination, method of payment, and how/where the money is being received. If the money is going into a bank account, one would have to pay for the transfer as well as whatever fees the bank charges to accept the transfer. That usually ranges from $25.00 to $99.00.
• At the start of the lockdown, some stores ran out of coins. Those who paid by cash found themselves being shorted (often just by less than a dollar) unless they had exact change. (I take umbrage at not getting my change back. It’s not how much it is, but whose it is. Even if it’s only fifty cents, I want my money. Rant over.)

Where Are The Unbanked Going?

The previous bullet points are not a comprehensive list,  but they do give some insight into the costs associated with being unbanked. What does the future hold regarding spending, shopping, and cash payments? Will it be possible to remain unbanked?

In my next two blogs, I’ll tell more about how the city of Philadelphia addressed the issue of businesses going cashless, possible reasons for people being unbanked, and solutions to becoming re-banked. At CESI, we offer varied kinds of help and support to empower you and strengthen your financial future. Whatever you’re going through, you don’t have to go through it alone. Please reach out, we’re here.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt-free. Speak with a certified counselor for a free debt analysis today.

The use of peer-to-peer apps like Venmo, Zelle, and PayPal is booming. One forecast predicts that we’ll spend more than $1 trillion with them in 2023. But wherever there is money, fraud follows. And, according to the Federal Communications Commission, con artists are quickly adapting to our new spending habits.

The scenarios are many. Individuals are posing as businesses and disappear after a customer sends them some cash via an app. Consumer Reports shared the story of one woman who sent $850 via Zelle after seeing an Instagram post about a Goldendoodle who was available for adoption. Once she sent the money, she never heard from the owner again.

Con artists are using a stolen credit card to pay via an app for a computer, car, or other expensive items that are for sale online, the Better Business Bureau reports. They get the item, and the seller soon realizes that the payment didn’t go through. Now the seller is out both the money they would have earned and the item for sale.

In other cases, using spoof emails that look official, fraudsters convince the seller of an online item that they’ve accidentally overpaid for it, perhaps sending $3,000 for a $300 camera, the bureau reports. So, the seller returns the “overpayment,” and the buyer goes silent. Now they’ve lost the cash and the item they sold.

The potential for scams doesn’t mean you shouldn’t use these peer-to-peer apps. In our increasingly cashless society, they provide an easy way to send money back and forth. But it is important you take steps to protect yourself. Here’s how.

Always check on transfers

If you’re selling an item to somebody you don’t know, always make sure the transaction goes through and you’ve moved that money into your own bank account before you send anything to the buyer, the Federal Trade Commission recommends. Better yet, just use the peer-to-peer apps with friends, the Better Business Bureau says.

Think security

Because these apps have access to your sensitive financial information, always turn on the security measures to protect your account. That includes multi-factor authentication, requiring a PIN or using fingerprint recognition, according to the trade commission. Be sure to use strong passwords, the Federal Communications Commission says.

Be aware of social settings

Some apps share details about your transactions. Read the fine print to understand what information will be shared and make changes to the app’s settings if you want to keep things private, the trade commission recommends.

Use your credit card

When spending money, link the app to a credit card, not a debit card or bank account, the Better Business Bureau recommends. Unlike debit cards, credit cards typically come with purchase protection. So, if you fall victim to a fraudster, there’s a better chance that you’ll get your money back if you used a credit card.

Be wary

If a business says they only take payments via peer-to-peer apps, be cautious. That’s a red flag, the communications commission says. If a business owner is asking for payment via an app, Consumer Reports says they should be using apps designed for business owners such as Square Cash for Business or PayPal.

Again, these apps were designed to make it easier to send and receive money between peers like friends and family members with who you already have connections. So, the best policy to avoid a peer-to-peer payment scam may simply be using it only with people you know in real life.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt free. Speak with a certified counselor for a free debt analysis today.

I appreciate people discovering the amazing benefits of owning a pet but I also realize that many decisions to adopt were probably emotional. That’s not to say that emotions are bad when making a decision, but acting first and thinking later could end up with an innocent animal paying the price.  I really want pet ownership to be lovely, but accompanying money issues can dampen the experience.  We hope to provide some hints to help you and your fur babies (or lizards, fish, birds, snakes, or arachnids).

All Creatures Great and Small

If you’ve read our blog before you know that one of the basics of financial health is having a budget and your pets should be factored into your household expenses. It’s really helpful to have pet care needs to be broken down into categories:

• Food, snacks, supplements, vitamins
• Accessories, flea/tick collars, puppy pads, soap/shampoo (anything that you buy regularly for human members of your house, like diapers, etc.)
• 20-30 gallon tank for tarantulas (plus crickets, mealworms, grasshoppers, and roaches to feed them), ceramic heater (they like it warm)
• Dog pen, doggie bed, cat tree, collar/harness, leash, and any one-time purchase (maybe even a cute sweater)
• Veterinarian visits, medication, emergency clinic visits, training sessions, grooming visits
• Medical insurance, pet burial/cremation insurance

Also, another reality is that animals are social. If your pet is languishing from loneliness, will you have to adopt a pet for your pet? More animals=more cost.  It may seem like a lot to think about but every aspect should be considered so that you can give your pet a healthy and happy life.

Ways to save for Spot, Lulu, Pickles and Aragog

• When shopping for your biped family members at membership warehouses, don’t forget the four-footed (or eight-legged) ones. There are usually great selections of food, beds, and accessories at great savings, and often much less than at specialty pet stores.
• You can actually learn almost anything on YouTube, including how to train your pet. The savings can be substantial, as individual classes can range from $50-$70 and obedience courses from $200-$600.
• Take time to comparison shop for pet insurance and pet medications. If you join social media or neighborhood groups, they can be a great resource for cost-saving ideas for vets and reward loyalty clubs. You may also save even more money by sharing the cost of bulk items with other pet parents.
• Pet insurance is really important if your fur or feather baby has an accident, ingests something hazardous, or gets sick. Emergency visits are a hit to the wallet, particularly if made during off-hours. Even if little Tabitha is a healthy kitten, still consider getting insurance. Animals can develop chronic health issues and it’s best to be covered.

Keep the pet shelters empty…please adopt!

This blog is certainly not meant to discourage anyone from adopting a pet, but rather, it’s to make sure you’re ready and have thought through every aspect of their care. The return on investment with a pet is love, and the joy they give is priceless.

The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out and stay out of debt.  For a free debt analysis, contact us and find out how we can help.

According to the Federal Deposit Insurance Corporation report, or FDIC, about 7.1 million U.S. households are unbanked. These are individuals with no access to a checking or savings account at a bank or credit union.

In some cases, consumers simply don’t have the funds to set up a bank account. In other cases, the distrust of banks, concerns about bank fees, problems with previous bank accounts, or the inability to provide the right identification to open an account are holding them back, according to the report.

But without an official account, consumers are missing out on so much. They can have trouble getting loans because some lenders or creditors require a bank account as part of the application. To cash a check, the unbanked may be forced to go to a check-cashing service, which usually charges a fee.

Paying bills is more difficult, requiring people to pay in person with cash. Others use a money order to make sure the lights stay on or the rent gets paid. And their money isn’t protected. When cash is tucked away at home, it could be misplaced or stolen.

For the unbanked, without the benefit of a steady income or the means to travel to a bank, it can feel like there are few options. But there are. Here’s what the unbanked can do to shore up their money management.

Get a Bank On-certified account

Cities for Financial Empowerment Fund, a national nonprofit, created Back On accounts in partnership with more than 40 financial institutions across the country. They feature low costs, no overdraft fees, debit, prepaid cards, and online bill pay. The goal is to provide an easy and affordable way for the unbanked to be part of the mainstream banking system. The Bank On website offers a state-by-state list of banks where the accounts are available.

Find a second chance checking account

If you have a history of bounced checks or fees that went unpaid, it can be difficult to open a new account. Forbes article reports, when your account is shut down because of a bad track record, ChexSystems can put you on a list of high-risk bank customers. You can be on this list for up to five years, but you’re not out of luck. Second chance checking accounts provide an alternative. They are similar to a typical account but come with some extra restrictions. Forbes describes them as probationary accounts. These accounts provide an opportunity for people to restore their banking history. Wells Fargo, Radius Bank, and Chime are among the financial institutions that offer second chance accounts.

Consider a secured credit card

To open a secured credit card, you’ll need to put down a deposit, usually starting at around $200. That deposit will serve as collateral if you end up missing payments. If you close the card and pay off the balance the money is returned to you. According to Investopedia, it’s important to be cautious with these cards. The annual percentage rate can be high, hovering around 20%. However, they can provide an option for people who are working to rebuild their finances.

Check-in with local banks, credit unions

Some local banks and credit unions are willing to work with the unbanked to help them shore up their finances and better manage their money. Inclusiv, for example, is a network of credit unions across the country that serve low-income communities. Self-Help Federal Credit Union offers basic and affordable banking services in North Carolina, South Carolina, California, Illinois, Florida, Washington, and Wisconsin.

Consider a neobank

Neobanks are digital operations with no physical bank branches. As The Capital describes them, they offer the usual trappings of a bank account. This includes the ability to deposit money and pay for items. They often come with no fees and can be designed to help the underserved. CapWay is one example. Launched by a woman who grew up in a small town with few banking options, it boasts no monthly fees, overdraft fees, or minimum balance fees. The Capital has a list of dozens more.

For the unbanked, it may seem easiest to keep squirreling away cash in that shoebox in your closet or avoiding the fees that might come with a formal bank account. But remember this: Once you tally up the cost to cash checks and pay bills, not having a bank account can be much more costly than having one.

According to a NerdWallet study, a person with a bank account pays about $35 a year for a checking account and money orders. The unbanked annually spend nearly $200 on check cashing services and money orders. Bottom line, there are options for those ready to get their finances in order and launch on a path toward better financial health.

The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out and stay out of debt.  For a free debt analysis, contact us and find out how we can help.

For most of 2020, we have been sheltering in place, not only with our families but also with our things.   According to Digital Commerce 360, “Consumers spent $861.12 billion online with U.S. merchants in 2020, up an incredible 44.0% year over year, according to Digital Commerce 360 estimates. That’s the highest annual U.S. e-commerce growth in at least two decades. It’s also nearly triple the 15.1% jump in 2019.” https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/

Some of this is because of remote working and learning, but this still represents a lot of goods.

We understand with minimalism the correlation between goods and money but are we as cognizant of the time that our goods cost us? Time, minutes and hours, are our most precious currency, and when we work, we exchange our time for money. When we have time, we can always make money, but no amount of money can buy us more time.

What It’s NOT!

Minimalism is NOT an austere life where you own one chair, share one fork in a family of five, eat rice, and sleep on the floor. It’s a personal examination of one’s relationship with their stuff and spending money on that stuff.  Minimalism came to the forefront in response to the epidemic of hoarding. How much stuff can you own until your stuff owns you?

There several questions that the person who embraces the minimalist lifestyle asks themselves before they spend their money.

How much time will this cost?

If a person makes $12.50/hr and wants to buy a $150 item, the calculation should be 150÷12.50=12. This makes it easier to decide whether your purchase is worth over 25% of your workweek. I’m speaking generally of impulse buying; if you have budgeted and are working toward a purchase, that’s a very different consideration.  That means you’ve given it thought and worked out the details and your purchase will most likely enhance your life.

Do I NEED it, or WANT it?

I’ll be the first to admit that buying things is fun. It feels good to get something new and if it’s an indulgence (something I didn’t budget for), I love it all the more! There’s an element of danger until I remember an unpaid bill. I care that I look well put together in the workplace but I’ve been productive in sweatpants for the last year. Do I need a six-week wardrobe with no repeats?

Can money buy joy?

I love Marie Kondo and she’s helped me identify what brings me joy. If it makes my heart happy if I can afford it if I can visualize myself using it in my home…WOOHOO! Waiting for a beat in a store, or leaving something in my online shopping cart for an hour (or a day), has been a real money-saving practice for me and helped me curb impulse shopping.

Stop trying to be perfect!

When building new habits, you’ll slip, but don’t waste time beating yourself up. Learn the lesson and move on. And guess what…we at CESI can help you. You don’t have to walk this journey alone. We’re here for you. ​Contact us today for a free financial assessment with one of our certified credit counselors.

Financial woes, of course, don’t begin to happen immediately upon diagnosis. But symptoms can worsen over time. According to the Center for Retirement Research, about 80% of older adults with dementia are unable to manage their finances.

The warning signs of potential money problems, according to the National Institute of Aging, are unpaid or unopened bills. Other signs are an unusual number of new credit card purchases, strange new merchandise in the home, and money missing from a person’s account. Small decisions can quickly snowball into big money problems that threaten a person’s life savings and quality of life.

That means millions of Americans are on guard, caring for loved ones who can no longer make smart decisions about their money. As their friend or family member’s memory fades, they’re paying bills and keeping tabs on Social Security payments, insurance policies, and other matters. Here are tips for managing the finances of a loved one with dementia or Alzheimer’s disease.

Get power of attorney

Power of attorney is a legal document that gives someone, typically a family member or trusted friend, the ability to make decisions about finances and other matters. The person with power of attorney takes over when the person living with dementia no longer has the legal capacity to make good decisions. The Alzheimer’s Association recommends it among the legal documents that loved ones get after diagnosis.

Protect and prevent

Before and after you take control of their finances, it’s important to be aware of common scams that target older adults. The National Council on Aging recently listed the most popular ones. This includes scams that involve a con artist posing as a government official, grandchild, or computer tech expert. Others involve sweepstakes scams, romance scams, and pretend charities.

To protect and prevent older adults from falling prey, the Handbook for Helping People Living Alone with Dementia, recommends keeping a watchful eye. Get them off telemarketers lists via the Federal Trade Commission’s Do Not Call Registry. Check their credit reports each year. Enroll in automatic bill payment. This will ensure nothing gets left unpaid. Let local bank tellers and shop owners know that the individual may have trouble with even simple transactions. Some banks and utility companies, according to the report, will notify a third party about unpaid bills or large withdrawals. These are both red flags that something is amiss.

Offer some independence

Even if you’ve started making financial decisions for your loved ones, it can still help to give them a bit of independence. The National Institute on Aging notes that older adults can feel suspicious when they no longer have access to their checkbook or bank account. The institute recommends giving an older adult a small amount of cash or lowering the spending limit on a credit card. This will help them have some connection to their money. With it, they can still run errands at the grocery store or pay for lunch out with friends.

A diagnosis of dementia and Alzheimer’s disease can be devastating. But when an individual with dementia falls prey to a scam or fritters away their life savings, it only makes a tough situation worse. Taking steps to avoid financial disasters can help to protect them in their final years.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt-free. Speak with a certified counselor for a free debt analysis today.

There’s a brand of lipstick I really like and the color on the model looked fabulous. In my cart, it goes! Imagine my surprise, no, SHOCK at finding out the model, who has a huge Insta following, was not a real person. Shudu is one of the first digital supermodels/influencers in the world and I couldn’t tell. I felt a little duped.

I was squarely seated on my high horse until logic knocked me off. There was no difference in what I did as a photographer. I took photos, people paid me, I edited the photos and presented them with enhanced images.

I removed pimples and moles from senior photos.

I slimmed the mother-of-the-bride.

I filled in the hair of the proud, but follically-challenged dad.

I was an influencer (Pearl clutch.)

Who Are They?

Here’s the definition: An influencer is simply someone who influences others’ buying decisions…In marketing parlance, an influencer is someone who causes others to make specific consumer decisions. (https://www.commpro.biz/what-it-means-to-be-an-influencer/)

I want to be clear. Being an influencer is not wrong, not underhanded, nor is it unethical. I start almost every class with the words, “Everybody wants your money BUT it’s up to you where you spend it.” You can’t fault influencers for simply doing their job but you can be savvy about how you spend your money. Here are some guardrails that may help you stay on track.

Do You Surf At Night?

Just before bedtime is when people tend to be highly suggestible. If it’s been a particularly challenging day, and/or you’ve made a lot of decisions and just feel like you need a treat…watch out. Don’t be sucked in by infomercials, shopping channels or the “Buy now because we’ll be sold out of the green velour pajamas with purple polka dots any minute” hard sell tactic.

I’m from Philadelphia and was missing home when I bought a soft pretzel maker and dough mix at one o’clock in the morning. Fours years later when we were packing to move, my husband found it (still in the box) and asked, “What’s this?”. I mumbled something and ran to another room.

I Don’t Surf…I Scroll!

Ahhh…okay, then you’re safe. NO, YOU’RE NOT! Scrolling is how I found the amazing lipstick. A line from the documentary, The Social Dilemma; “If you’re paying for the product, then you are the product.”  Algorithms are learning your scrolling and shopping habits and can sway you in scarily precise ways.  Scrolling seems like an innocuous act but you’re building a habit, strengthening muscle memory. Things you can do rather than scroll? Read a book, call someone you love, and one of my favorites, look at old family photos.  Whatever will redirect your focus from spending money is fantastic. Find your alternate happy place.

Little Drummer Girl

I know, I know…I bang this drum a lot but I’ll continue to do so until the whole world (an ambitious goal)  repeats this mantra with me: Use a budget!

Make a budget, maintain your budget, update your budget and stick to your budget. Budgets can save you a world of hurt when you follow them.  How do you ask?

• You know how much you have to spend  every month
• You know how much you need to save every month
• You strengthen your red light (no, for now), yellow light (that purchase may be possible). green light (yay, I can afford it) skills
• You won’t have to mutter a prayer every time you use your debit card at the end of the month.

Knowing that you are being influenced every day is the best weapon to hold onto your precious coins. If you need help with money matters, we are here. Contact us today for a free financial assessment with one of our certified credit counselors.

For people aged 62 and up, a reverse mortgage may seem like a tantalizing opportunity. After decades of sending in your monthly mortgage payments, you’re now getting money from your bank. A reverse mortgage siphons off the equity in your home and sends the cash to you to use for whatever you want. That includes paying off bills, covering a costly medical expense, home repair, or simply funding your retirement.

But here’s the rub: It’s not free money. Once you sell the house, move out or die, the loan must be repaid by either you, your spouse, or your estate. And, depending on how much is owed, that could mean selling your home and leaving a smaller inheritance to your heirs.

Who to watch out for

During COVID, as more people lost jobs and faced other financial emergencies, the Consumer Financial Protection Bureau, a federal agency, reports that a growing number of scammers are targeting older adults through reverse mortgages.

Scammers can include family members or caregivers who pressure an older homeowner to apply for a reverse mortgage loan or even impersonate them. Others steal the homeowner’s identity, such as their Social Security number, to get the cash.

Some shady contractors claim reverse mortgages offer a “can’t miss” investment opportunity to make expensive home repairs, the agency says. Some homeowners to sign over power of attorney, so they can keep all the money.

Scammers attempt to target older homeowners through community organizations, investment seminars, or through TV, radio, billboard, and mailer advertisements. “Unfortunately, many older homeowners do not realize they have been scammed until the loan money is gone,” the agency writes.

The agency recommends three ways older homeowners can protect themselves:

• Never trust a contractor who claims a reverse mortgage is the best way to pay for a home improvement project.
• Move on if a reverse mortgage loan officer attempts to sell you on other “investment opportunities.” They aren’t allowed to sell them, says the agency.
• Always vet several lenders before deciding on a reverse mortgage.

Beware of the risks

It’s also important to remember that reverse mortgages come with some big downsides, the Federal Trade Commission reports. Again, it’s not free money.

Just like with most loans, fees and other costs come with the reverse mortgage. You’ll still need to pay interest and the more money you take out, the more you’ll owe over time. And often interest rates on reverse mortgages are variable, which means they will change over time with the market.

What’s more, if you don’t keep up on your other house payments, such as your property taxes or homeowner’s insurance, the lender could mandate that you repay the entire loan.

And often, particularly in lower-income and Black neighborhoods, reverse mortgages end badly, according to a USA Today analysis. The newspaper found high rates of foreclosure in those neighborhoods where lenders have made big promises about reverse mortgages, but not fully detailed the risks associated with them.

Reverse mortgage alternatives

Consider your alternatives first. Instead of pulling equity from your existing home, you can sell it and downsize. Another option is to refinance your mortgage, so your monthly payments are lower. This will also help you have more cash on hand. A home equity loan or credit line is another way to pull from your home’s equity without dealing with some of the risks of a reverse mortgage.

Every financial decision comes with risks and rewards. That’s why every “opportunity” must be vetted before a big move is made. After decades of building a nest egg for you and your family, it’s especially critical to be on alert for the fraudsters who are determined to steal it away.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt-free. Speak with a certified counselor for a free debt analysis today.